Nghị quyết 107/2023/QH15 áp dụng thuế thu nhập bổ sung chống xói mòn cơ sở thuế toàn cầu

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

This Resolution provides for the application of Top-up Tax to taxpayers under Global Anti-Base Erosion (GloBE) rules.

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.

2. The Government shall elaborate this Article.

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.

6. A "partially-owned parent entity" means a constituent entity of an MNE Group (other than the ultimate parent entity, permanent establishment or investment entity) that:

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.

10. A "consolidated financial statement" means:

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.

16. "Income or loss in a jurisdiction in a fiscal year" means the net income or loss in the jurisdiction under the GloBE rules.

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:

Top-up Tax Percentage = Minimum Rate – Effective Tax Rate

4. Minimum Rate is 15%.

5. Effective Tax Rate in Vietnam shall be calculated every fiscal year in accordance with the following formula:

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

Net GloBE Income = GloBE Income of all constituent entities – GloBE Loss all constituent entities

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 Revenue 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:

Jurisdictional Top-up Tax = (Top-up Tax Percentage x Excess Profit) + Additional Current Top-up Tax (if any) – Qualified Domestic Minimum Top-up Tax (if any)

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:

6. Excess Profit shall be determined in accordance with Clause 6 Article 4 of this Resolution.

7. Jurisdictional Net GloBE income shall be determined in accordance with Clause 7 Article 4 of this Resolution.

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:

11. A parent entity's allocable share of the Top-up Tax of a low-taxed constituent entity equals (=) Top-up Tax of the low-taxed constituent entity multiplied by (x) the parent entity's Inclusion Ratio for the low-taxed constituent entity in the fiscal year. The parent entity's Inclusion Ratio for the low-taxed constituent entity shall be determined in accordance with the following formula:

12. Jurisdiction Top-up Tax 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 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.

Article 6. Tax declaration, payment and administration

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 information declarations under the GloBE rules, declarations of Top-up Tax 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.

5. The exchange rate for determination of revenue and income thresholds prescribed in Articles 2, 4, 5 and 6 of this Resolution shall be the average central rate of 12 years preceding the year in which the reference revenue or income is earned, which is announced by State Bank of Vietnam.

6. Transitional relief for obligations for fiscal years before December 31^st 2026 excluding the fiscal year that ends after June 30^th 2028:

a) During the transitional period, Jurisdiction Top-up Tax in a fiscal year shall 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.

Article 7. Implementation organization

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 1^st 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 29^th 2023 by the 15^th National Assembly of the Socialist Republic of Vietnam during the 6^th meeting.

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 29^th 2023 of the National Assembly)

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