The National Assembly (NA) has decided that Vietnam will apply the global minimum tax next year, but will use revenues from this tax to set up an investors assistance fund to attract strategic investors and support domestic enterprises in certain areas. Global minimum tax in 2024 The sixth NA sitting wrapped up on November 29, 2023 with two important decisions on the global minimum corporate tax. First, an NA resolution was passed, endorsing the global minimum tax effective from the 2024 fiscal year. Accordingly, the constituent companies that are part of a multinational corporation with global revenue of 750 million euros or more as manifested in its consolidated financial statement in at least two out of four years preceding the fiscal year active in Vietnam will have to declare and pay the global minimum tax. Vietnam will apply the qualifying domestic minimum top-up tax (QDMTT) in line with the global anti-base erosion (GloBE) rules. QDMTT is a standardized mechanism in the OECD Model Rules, and is recommended by international and domestic experts. Other mechanisms, such as applying the corporate income tax at 15%, may not be consistent with the OECD rules and may inflate an MNC’s total tax obligations, which […]
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