Decree on the implementation of global minimum tax: Ensuring a clear and transparent legal framework

Dang Ngoc Minh, Deputy Director General of the General Department of Taxation made an openning speech.

Tax policies linked to FDI attraction: A critical task

This point was highlighted by Deputy Director General Dang Ngoc Minh during the workshop “Consultation on the draft Decree detailing the implementation of certain articles of resolution No. 107/2023/QH15”, organized by the General Department of Taxation in collaboration with the German International Cooperation Society (GIZ) on November 28.

The workshop brought together representatives from related agencies, six provincial tax departments with enterprises affected by the global minimum tax, and businesses subject to the global minimum tax regulations, including both domestic and foreign-invested enterprises (FDIs) operating in northern provinces and cities.

In his opening remarks, Dang Ngoc Minh emphasized that formulating and implementing tax policies, especially those related to attracting foreign investment, is a critical responsibility not only for state management agencies but also for businesses and international organizations.

View of the workshop

He noted that Resolution No. 107/2023/QH15 of the National Assembly, which governs the application of additional corporate income tax under global tax base erosion rules, provides a new direction and a legal foundation for synchronized state budget revenue collection. It also facilitates Vietnam's deeper integration into the international community amidst significant shifts in global taxation.

Deputy Director General Minh further explained that the implementation of additional corporate income tax under global anti-base erosion rules is part of Vietnam’s commitment to international organizations, particularly the Organisation for Economic Co-operation and Development (OECD). These measures aim to ensure fairness in the international tax system, prevent profit-shifting practices, and eliminate tax rate reductions achieved through interest or profit transfers between multinational corporations.

The workshop sought feedback from experts, leading consultancy firms, and large businesses, alongside input from state management agencies, to finalize the decree. The goal is to move towards a fair, efficient, and transparent international tax system.

“The finalized decree must align with practical management needs, establish a clear and transparent legal framework, facilitate compliance with new tax regulations, and protect national interests,” emphasized Dang Ngoc Minh.

He further highlighted that the issue not only affects the fiscal policies of nations but also directly impacts businesses, especially multinational corporations operating in Vietnam.

Vietnam takes proactive steps

During the workshop, a representative from the Department of Tax Declaration and Accounting (under the General Department of Taxation) provided an overview of tax management, declaration, and payment requirements outlined in the draft decree. The decree proposes new forms and templates for corporate income tax registration, declaration, and payment under the global minimum tax framework.

The draft decree, detailing certain provisions of Resolution No. 107/2023/QH15, was structured in accordance with the resolution and OECD guidelines on global minimum tax rules.

It comprises 24 articles divided into three sections: General Provisions (detailing Article 2 of the resolution); Specific Provisions (detailing Articles 4, 5, and 6 of the resolution); Implementation Clauses.

These regulations are built on existing tax management laws and align with the administrative guidance outlined in Section 8 of the OECD's Model Rules on global minimum tax.

At the workshop, Wonsik Son, a tax expert from the Korean Business Association in Vietnam, expressed his hope that the Vietnamese Government would continue to support the association in implementing global minimum tax policies.

Meanwhile, Dr. Peter Wenzel, a tax policy advisor representing the Public Financial Management Reform Project in Vietnam, commended Vietnam for its proactive approach. Following the adoption of Resolution No. 107/2023/QH15 by the National Assembly in November 2023, Vietnam began drafting detailed regulations for the global minimum tax, demonstrating its commitment to deeper international integration.

“Vietnam is one of the pioneering countries in developing detailed regulations for the global minimum tax,” said Dr. Wenzel. He added that Vietnam’s deliberate approach, in collaboration with international organizations and countries that have already implemented the system, ensures that the decree adheres to international practices and contributes to the successful implementation of the resolution.