|
THE
NATIONAL ASSEMBLY
OF VIETNAM
--------
|
SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom – Happiness
---------------
|
|
No.
107/2023/QH15
|
Hanoi,
November 29, 2023
|
RESOLUTION
APPLICATION OF TOP-UP TAX UNDER THE GLOBAL ANTI-BASE EROSION
RULES
THE NATIONAL ASSEMBLY OF VIETNAM
Pursuant to the Constitution of
the Socialist Republic of Vietnam;
Pursuant to the Law on
Organization of the National Assembly No. 57/2014/QH13, amended by the Law No.
65/2020/QH14;
Pursuant to the Law on
Promulgation of Legislative Documents No. 80/2015/QH13, amended by the Law No.
63/2020/QH14;
RESOLVES:
Article 1.
Scope
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Article 2.
Taxpayers
1. Any Constituent Entity of a
Multinational Enterprise (MNE) Group that generates a revenue of at least 750
million euros (EUR) for at least 02 years out of 04 years preceding the fiscal
year according to the consolidated financial statement of its Ultimate Parent
Entity, except for the following cases:
a) Governmental entities;
b) International organizations;
c) Non-profit organizations;
d) Pension funds;
dd) Any investment fund that is an
Ultimate Parent Entity;
e) Any real estate investment
vehicle that is an Ultimate Parent Entity;
g) Any entity where at least 85% of
its asset value is owned directly or through a chain of excluded entities
mentioned in Point a through e of this Clause.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Article 3.
Definitions
For the purposes of this
Resolution, the terms below are construed as follows:
1. Global Anti-Base Erosion
(GloBE) rules are the rules provided for by this resolution and regulations of
the Government in conformity with the global minimum tax regulations of
Inclusive Framework on Base Erosion and Profit Shifting (IF on BEPS) of which
Vietnam is a member
2. A "Group"
means:
a) A collection of entities that
are related through ownership or control such that the assets, liabilities,
income, expenses and cash flows of those entities are included in the
consolidated financial statements of the Ultimate Parent Entity, or are
excluded from the consolidated financial statements on the grounds of size,
materiality, or that they are held for sale;
b) An entity that is located in one
jurisdiction and has one or more permanent establishments located in other
jurisdictions provided that the entity is not an entity of another Group.
3. An "MNE Group"
means any Group that includes at least one Constituent Entity or permanent
establishment that is not located in the jurisdiction of the Ultimate Parent
Entity.
4. An "Ultimate Parent
Entity" means an entity of an MNE Group that has the right to control or
own directly or indirectly other entities of an MNE Group, is not owned or
controlled by any other entity, and whose consolidated financial statement is
not consolidated into the financial statement of any other entity globally.
5. An "Intermediate
Parent Entity" means a Constituent Entity of an MNE Group (other than the
Ultimate Parent Entity, partially owned parent entity, permanent establishment
or investment entity) that directly or indirectly owns an ownership interest in
another Constituent Entity in the same MNE Group.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
a) owns directly or indirectly an
ownership interest in another Constituent Entity of the same MNE Group; and
b) has more than 20% of the
ownership interests in its profits held directly or indirectly by entities that
are not constituent entities of the MNE Group.
7. A "Constituent
Entity" of an MNE Group means any entity that is included in the Group and
any permanent establishment of an entity within the Group, including:
a) The Ultimate Parent Entity;
b) The Intermediate Parent Entity
(if any);
c) The Partially-Owned Parent
Entity (if any);
d) Any other entities, units,
business establishments of the Group.
8. A "low-tax
jurisdiction" means a jurisdiction where the MNE Group, in a fiscal year,
has Net GloBE Income and is subject to an effective tax rate that is lower
than the minimum rate.
9. A "Low-Tax
Constituent Entity" means a Constituent Entity of an MNE Group that is
located in a low-tax jurisdiction or a stateless Constituent Entity that, in a
fiscal year, has GloBE Income and is subject to an Effective Tax Rate that is
lower than the minimum rate.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
a) A financial statement prepared
by an entity in accordance with an Acceptable Financial Accounting Standard, in
which the assets, liabilities, income, expenses and cash flows of that entity
and other entities in which it has a controlling interest are presented as
those of a single economic unit;
b) Where an entity meets the
definition of a Group under Point b Clause 2 of this Article, the consolidated
financial statement of such entity that is prepared in accordance with an
Acceptable Financial Accounting Standard;
c) Where the Ultimate Parent Entity
has financial statements described in Point a and Point b of this Clause that
are not prepared in accordance with an Acceptable Financial Accounting
Standard, the consolidated financial statements are those that have been
adjusted to prevent any material competitive distortions;
c) Where the Ultimate Parent Entity
does not prepare financial statements described in Points a, b and c of this
Clause, the consolidated financial statements of the Ultimate Parent Entity are
those that are prepared in accordance with an authorized financial accounting
standard, including Acceptable Financial Accounting Standard or another financial
accounting standard that is adjusted to prevent any material competitive
distortions.
11. "Acceptable
Financial Accounting Standard" means International Financial Reporting
Standards (IFRS) and the generally accepted accounting principles of Australia,
Brazil, Canada, Member States of the European Union, Member States of the
European Economic Area, Hong Kong (China), Japan, Mexico, New Zealand, the
People’s Republic of China, the Republic of India, the Republic of Korea,
Russia, Singapore, Switzerland, the United Kingdom, and the United States of
America.
12. "authorized
financial accounting standard" means a set of generally acceptable
accounting principles permitted by an authorized accounting body in the
jurisdiction where that entity is located.
13. "Income or loss of
each Constituent Entity" means the net income or loss under the financial
statement of such Constituent Entity in the fiscal year under the GloBE rules.
14. "average revenue,
income or loss in a jurisdiction" means the average value of 03 years
(including the current fiscal year and 02 preceding years) of revenue, income
or loss in such jurisdiction under the GloBE rules.
15. "Revenue in a
jurisdiction in a fiscal year" means the total income of all constituent
entities in the jurisdiction in the fiscal year under the GloBE rules.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
17. The "location"
of a Constituent Entity shall be determined as follows:
a) If the Constituent Entity is a
tax resident of a jurisdiction according to its place of management, place of
establishment or similar criteria, it will be considered that the Constituent
Entity is located in such jurisdiction;
b) In other cases, it will be
considered that a Constituent Entity is located in the jurisdiction in which it
is established.
Article 4.
Qualified Domestic Minimum Top-Up Tax (QDMTT)
1. Constituent entities or
collections of constitution entities of MNE Groups defined in Article 2 of this
Resolution having business operation in Vietnam in the fiscal year shall apply
regulations on QDMTT.
Where constituent entities or
collections of constitution entities have GloBE Income and the Effective Tax
Rate in Vietnam is below the minimum tax rate, the QDMTT accrued in Vietnam
shall be determined in accordance with Clause 2 and Clause 9 of this Article.
2. QDMTT shall be determined in
accordance with the following formula:
QDMTT = (Top-up Tax Percentage x
Excess Profit) + Additional Current Top-up Tax (if any).
3. Top-up Tax Percentage shall be
determined in accordance with the following formula:
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
4. Minimum Rate is 15%.
5. Effective Tax Rate in Vietnam
shall be calculated every fiscal year in accordance with the following formula:
Effective
Tax Rate in Vietnam
=
Regulated
total corporate income tax accrued in Vietnam in the fiscal year of
constituent entities in Vietnam
Net
GloBE Income in Vietnam in the fiscal year
6. Excess Profit shall be
determined in accordance with the following formula:
Excess Profit = Net GloBE Income –
(tangible asset carve-out + payroll carve-out)
7. Net GloBE Income in Vietnam in
the fiscal year
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
8. Tangible asset carve-out and
payroll carve-out under the GloBE rules upon determination of Excess Profit
shall be 5% of annual average tangible assets of all constituent entities in
Vietnam and 5% of payroll costs of all constituent entities in Vietnam under
the Globe rules. During the transitional period from 2024, the rates of
tangible asset carve-out and payroll carve-out of each year specified in the
Appendix hereof shall apply.
9. QDMTT in a fiscal year shall be
zero (0) if the Constituent Entity or group of constituent entities satisfies
all of the following conditions in the fiscal year:
a) The average GloBE Revenue in
Vietnam is below 10 million EUR;
a) The average GloBE Income in
Vietnam is below 01 million EUR;
Every year, if the conditions
specified in this Clause are fully satisfied, the Constituent Entity may choose
whether to apply the QDMTT of 0.
10. The Government shall elaborate
this Article.
Article 5.
Income Inclusion Rule (IIR)
1. The Ultimate Parent Entity,
Partially-Owned Parent Entity, Intermediate Parent Entity that is a Constituent
Entity defined in Article 2 of this Resolution, directly or indirectly owns an
ownership interest in Low-Taxed Constituent Entities located in other
jurisdictions under the GloBE rules at any time during the fiscal year shall
declare and pay a minimum amount of tax equal to its allocable share of Top-up
Tax under the GloBE rules of these Low-Taxed Constituent Entities for the
fiscal year, unless this Top-up Tax has been paid in another jurisdiction that
is required to apply a Qualified IIR under the GloBE rules.
2. Jurisdictional Top-up Tax shall
be determined in accordance with the following formula:
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
3. Top-up Tax Percentage shall be
determined in accordance with the following formula:
Top-up Tax Percentage = Minimum
Rate – Effective Tax Rate
4. Minimum Rate is 15%.
5. Jurisdictional Effective Tax
Rate shall be calculated every fiscal year in accordance with the following
formula:
Jurisdictional
Effective Tax Rate
=
Regulated
total corporate income tax accrued in the jurisdiction in the fiscal year of
all constituent entities in that jurisdiction
Net
GloBE Income in the jurisdiction in the fiscal year
6. Excess Profit shall be
determined in accordance with Clause 6 Article 4 of this Resolution.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
8. Tangible asset carve-out and
payroll carve-out under the GloBE rules upon determination of Excess Profit
shall be 5% of annual average tangible assets of all constituent entities in
the jurisdiction and 5% of payroll costs of all constituent entities in the
jurisdiction under the GloBE rules. During the transitional period from 2024,
the rates of tangible asset carve-out and payroll carve-out of each year
specified in the Appendix hereof shall apply.
9. QDMTT is the amount payable
under Regulations on QDMTT in another jurisdiction in the fiscal year.
10. Top-up Tax of a Constituent
Entity in a jurisdiction with GloBE Income in the fiscal year included in the
computation of Net GloBE Income of that jurisdiction shall be determine in
accordance with the following formula:
Top-up
Tax of a Constituent Entity
=
Jurisdictional
Top-up Tax
x
GloBE
Income of the Constituent Entity
Aggregate
Globe Income of all constituent entities in the jurisdiction
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
Parent
entity's Inclusion Ratio for the low-taxed Constituent Entity in the fiscal
year
=
GloBE
Income of the low-taxed Constituent Entity for the fiscal year – Income attributable
to ownership interests held by other owners
GloBE
Income of the low-taxed Constituent Entity for the fiscal year
12. Jurisdiction Top-up Tax in a
fiscal year shall be deemed to be zero (0) if the Constituent Entity or group
of constituent entities satisfies all of the following conditions in the fiscal
year:
a) The average GloBE Revenue of
such jurisdiction is less than 10 million EUR;
b) The average GloBE Income of such
jurisdiction is less than 01 million EUR or is a loss.
Every year, if the conditions
specified in this Clause are fully satisfied, the Constituent Entity may choose
whether to apply the QDMTT of 0.
13. The Government shall elaborate
this Article.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
1. With regard to regulations on
QDMTT, the time limit for submission of declarations of QDMTT, Top-up Tax
enclosed with written explanation for differences between financial accounting
standards and payment of Top-up Tax is 12 months after the end of the fiscal
year.
2. Regarding Income Inclusion Rule
(IIR), the time limit for submission of GloBE Information Returns, Top-up Tax
Return enclosed with written explanation for differences between financial
accounting standards and payment of Top-up Tax is 18 months after the end of
the first fiscal year in which the MNE Groups become subject to the GloBE
rules; 15 months after the end of succeeding fiscal years.
3. Constituents entities that have
to declare and pay tax shall be identified as follows:
a) If an MNE Group has 01
Constituent Entity in Vietnam, such Constituent Entity shall declare and pay
Top-up Tax under the GloBE rules;
b) If an MNE Group has more than 01
Constituent Entity in Vietnam, within 30 days from the end of the fiscal year,
the MNE Group shall issue a document designating one of these Constituent
Entity to declare and pay Top-up Tax under the GloBE rules;
If the MNE Group fails to designate
a Constituent Entity to declare and pay Top-up Tax under the GloBE rules within
30 days from the end of the fiscal year, the tax authority will select a
Constituent Entity in Vietnam to declare and pay tax within 30 days from the
expiration of the aforementioned time limit.
c) In case of an event that leads
to a change of the Constituent Entity responsible for declaring and paying tax,
the MNE Group shall notify the tax authority within 10 days from the date of
occurrence of such event. If the MNE Group fails to make a notification within
10 days from the day on which information is available, the tax authority will
select a Constituent Entity to declare and pay tax;
d) In case the tax authority has
issued a notification of selection of the Constituent Entity responsible for
declaring and paying tax under Point b or Point c of this Clause before the tax
authority is informed of the event that leads to a change of the Constituent
Entity responsible for declaring and paying tax, the tax authority shall issue
a notification of selection of another Constituent Entity responsible for
declaring and paying tax.
4. Top-up Tax under the GloBE rules
shall be paid to central government budget.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
6. Transitional relief for
obligations for fiscal years before December 31st 2026 excluding the
fiscal year that ends after June 30th 2028:
a) During the transitional period,
Jurisdiction Top-up Tax in a fiscal year shall be deemed to be zero (0) if one
of the following criteria is satisfied:
a.1) In the fiscal year, the MNE
Group has a qualified country-by-country report in which the aggregate revenue
is less than 10 million EUR and pre-tax profit is less than 01 million EUR or
is a loss in such country;
a.2) In the fiscal year, the MNE
Group has an Effective Tax Rate in such country of at least 15% for 2023 and
2024; 16% in 2025 and 17% for 2026;
a.3) The pre-tax profit (or loss)
of the MNE Group in such country is equal to or less than the substance-based
income exclusion (sum of the tangible asset carve-out and payroll carve-out)
calculated under the GloBE rules of the constituent entities in such country
according to the country-by-country report;
b) During the transitional period,
administrative penalties shall not be imposed for violations against
regulations on preparation and submission of information declarations under the
GloBE rules and declarations of Top-up Tax enclosed with written explanation
for differences between financial accounting standards;
7. Constituent entities may choose
simple computation methods for determination of their eligibility for relief of
obligations in terms of Excess Profit, average income and revenue, effective
tax rate.
8. Top-up Tax that have been paid
in accordance with this Resolution may be offset against corporate income tax
payable in Vietnam on the income from investment in other countries.
9. Pursuant to the regulations of
this Article, the Law on Tax Administration and relevant regulations of law,
the Government shall promulgate regulations on administration of Top-up Tax
under the GloBE rules.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
1. The Government and Ministries
shall, within the scope of their duties and entitlements, organize the
implementation of the contents and policies of this resolution; promptly make
preparations for the implementation of this Resolution; focus on organization
of multilateral automatic information exchange serving collection of global
minimum tax; develop plans and road maps for official implementation, assign
responsibilities, organize their apparatus and resources to promptly meet the
capacity of tax authorities; take measures to improve taxpayers' awareness and
compliance.
2. Standing committee of the
National Assembly, Ethnicity Council and Committees of the National Assembly,
National Assembly delegations and delegates, the People's Councils of provinces
and centrally affiliated cities, Vietnamese Fatherland Front and its member
organizations shall, within the scope of their duties and entitlements,
supervise the implementation of this Resolution.
Article 8.
Implementation clauses
1. This Resolution comes into force
from January 1st 2024 and applies from the fiscal year of 2024.
The Government shall promptly
complete and submit the Corporate Income Tax Bill (amended) in accordance with
the Law on Promulgation of Legislative Documents to Standing committee of the
National Assembly and the National Assembly for inclusion in the 2024's
Law/Ordinance Formulation Program.
2. In case of discrepancies between
regulations of this Resolution and those of another Law or Resolution of the
National Assembly on the same issue, this Resolution shall prevail.
3. In case of new instructions on
or amendments to the GloBE rules of IF on BEPS after the effective date of this
Resolution, the Government shall promulgate specific regulations for
implementation. Any content that contradicts this Resolution shall be reported
to the National Assembly for consideration and decision. In case of urgency
while the National Assembly meetings are not being held, the matter shall be
reported to Standing committee of the National Assembly, which will decide and
report to the National Assembly at the earliest meeting./.
This Resolution is ratified on
November 29th 2023 by the 15th National Assembly of the
Socialist Republic of Vietnam during the 6th meeting.
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
NATIONAL
ASSEMBLY PRESIDENT
Vuong Dinh Hue
APPENDIX
TANGIBLE ASSET CARVE-OUT AND PAYROLL CARVE-OUT IN EACH
YEAR OF THE TRANSITIONAL PERIOD
(Promulgated together with Resolution No. 107/2023/QH15 dated November 29th
2023 of the National Assembly)
Fiscal
year beginning in
Payroll
percentage (%)
Tangible
asset percentage (%)
2024
9,8
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
2025
9,6
7,6
2026
9,4
7,4
2027
9,2
7,2
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
9
7
2029
8,2
6,6
2030
7,4
6,2
2031
...
...
...
Hãy đăng nhập hoặc đăng ký Thành viên
Pro tại đây để xem toàn bộ văn bản tiếng Anh.
5,8
2032
5,8
5,4