Establish a special working group to study and propose solutions related to the global minimum tax rate in Vietnam?
What is the global minimum tax in Vietnam?
In Notice No. 120/TB-VPCP in 2023, the global minimum tax rate is defined as a policy arising from the outside that has profound and profound impacts on Vietnam as a country attracting and receiving investment.
Earlier, at the press conference in the first quarter held by the Ministry of Finance on the afternoon of March 30, Deputy General Director of the General Department of Taxation Dang Ngoc Minh mentioned the global minimum tax of the Organization for Economic Co-operation and Development (OECD) as follows:
The global minimum tax of the OECD, also known as Pillar 2, stipulates the global minimum tax rate, whereby foreign direct investment (FDI) enterprises will be subject to income tax of at least 15%.
The global minimum tax can be understood as a tax levied on large enterprises and multinational companies with large revenues, but investing in countries with low tax rates to evade taxes, potentially harmful effects of unfair competition.
Therefore, on the basis of research and experience of relevant countries (including "source" countries as well as investment-receiving countries), especially those with similar circumstances and conditions as Vietnam, it is necessary to have a thorough assessment of all impacts, especially adverse impacts, in order to have appropriate behavioral solutions.
Establish a special working group to study and propose solutions related to the global minimum tax rate in Vietnam?
What is the issue of the proposed global minimum tax in Vietnam?
At Notice No. 120/TB-VPCP in 2023, the Government of Vietnam evaluated the research results on the global minimum tax rate as follows:
The report of the Ministry of Finance only focuses on amending and adjusting tax policies without fully analyzing and evaluating the impact of the application of the global minimum tax rate, especially the adversely affect the investors that we have committed to give incentives, thereby affecting the attractiveness, competition and investment attraction of the investment and business environment in Vietnam.
The Ministry of Finance will receive the above comments and assessments to continue to improve the content of the report. At the same time, the Ministry of Finance said that the report should cover all arising problems to propose and recommend appropriate solutions in the coming time, especially the report must be organized more closely and clearly, which focuses on clarifying the following five core issues:
(1) The process of formation and implication of the global minimum tax Rate;
(2) Clearly state whether Vietnam needs or does not need, should or should not participate;
(3) Clarifying our tax policy in recent times;
(4) Analyze and evaluate the impact of the global minimum tax rate on Vietnam fully and comprehensively, focusing on assessing the impact on: State budget; Investors; attracting foreign investment of Vietnam;
(5) Vietnam's response to the impact of the global minimum tax rate, especially the solution for those affected, needs to be specific and clearly analyzed.
In addition, Deputy Prime Minister Le Minh Khai highly appreciated the Ministry of Finance for the research results, the time to complete the report "Global minimum tax rate policy, impact on Vietnam".
Establishing a special working group to study and propose solutions related to the global minimum tax rate?
On April 14, 2023, Deputy Prime Minister Le Minh Khai signed Decision No. 22/QD-TCTDB in 2023 promulgating the Regulation on organization and operation of the Prime Minister's Special Working Group on research and proposals on solutions related to the OECD's global minimum tax rate.
According to that, the Regulation promulgated together with Decision No. 22/QD-TCTDB in 2023 stipulates the principles, responsibilities, and working regime; operating mechanism, reporting regime and conditions to ensure the operation of the Prime Minister's Special Working Group on researching and proposing solutions related to the OECD's global minimum tax rate.
The list of members of the Special Working Group to study and propose solutions related to the global minimum tax rate under Decision No. 55/QD-TTg in 2022 includes:
- Head of the Working Group: Deputy Prime Minister - Mr. Le Minh Khai;
- Standing Vice Chairman of the Working Group: Minister of Finance - Mr. Ho Duc Phuc;
- Deputy Head of the Working Group: Deputy Minister of Planning and Investment - Ms. Nguyen Thi Bich Ngoc;
- Mr. Cao Anh Tuan - Deputy Minister of Finance - Member;
- Mr. Tran Quoc Khanh - Deputy Minister of Industry and Trade - Member;
- Mr. Nguyen Khanh Ngoc - Deputy Minister of Justice - Member;
- Mr. Le Xuan Dinh - Deputy Minister of Science and Technology - Member;
- Mr. Nguyen Minh Vu - Permanent Deputy Minister of Foreign Affairs - Member;
- Mr. Pham Thanh Ha - Deputy Governor of the State Bank of Vietnam - Member;
- Mr. Nguyen Xuan Thanh - Vice Chairman of Government Office - Member;
- Mr. Nguyen Duc Hien - Deputy Head of the Central Economic Commission - Member.
According to the provisions of Article 6 of the Regulation promulgated together with Decision No. 22/QD-TTg in 2023, members of the Special Working Group perform the following tasks and powers:
- Perform tasks as assigned by the Head of the Working Group; research, contribute professional opinions and take responsibility for the implementation of assigned tasks within the scope of state management of their ministries, branches and agencies.
- Periodically on the 20th day of the last month of the quarter or at the request of the Head of the Working Group or the Prime Minister, to report to the Standing Vice President on research results, progress in developing solutions and implementation situations related to the OECD's global minimum tax rate according to assigned tasks.
- Participate fully in the meetings of the Working Group, in case of absence, responsible for commenting in writing or authorizing the person attending the meeting to express the official opinions of the members of the Working Group.
- Act as the focal point for coordination between the Working Group and the ministry or agency that sent that member to join the Working Group.
- Request relevant ministries, ministerial-level agencies, agencies, organizations and individuals to report, provide information and documents related to the performance of assigned tasks.
- Propose activities of the Working Group when necessary.
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