For regulations on summarizing taxable income Minimum tax (IIR) When is the latest deadline for paying additional corporate income tax?

What are the regulations on minimum taxable income (IIR)?

Vietnam, as a member of the Joint Cooperation Forum on anti-tax base erosion and global profit shifting (IF) regulations, and after undergoing a period of review of the global minimum tax policy, Vietnam has officially applied the global minimum tax.

According to Resolution 107/2023/QH15 regulations, Vietnam will apply two rules:

(i) Qualified domestic minimum additional corporate income tax (QDMTT) and

(ii) Regulations on minimum aggregate taxable income (“IIR”).

In particular, the Minimum Taxable Income General Regulation (IIR) is a top-down tax regulation, which allows the country where the headquarters of the ultimate parent company is located to impose additional taxes on the ultimate parent company on the income of member companies in countries where the actual tax is lower than the minimum tax rate of 15%.

In case the ultimate parent company resides in a country that has not yet applied IIR, the next secondary capital holding company in the group’s ownership structure chain will declare and pay additional taxes in the country where the secondary company is located for member companies that are enjoying an effective tax rate lower than the minimum rate.

For regulations on minimum taxable income (IIR), when is the latest deadline for paying additional corporate income tax?

Pursuant to Article 6 of Resolution 107/2023/QH15 declaring, paying taxes and managing taxes according to regulations on preventing the erosion of the entire tax base request:

Tax declaration, payment and tax management

1. For regulations on standard domestic minimum additional corporate income tax, the deadline for submitting the Information Declaration according to the Global Minimum Tax Regulations, the additional corporate income tax declaration accompanied by an explanation of differences due to differences between financial accounting standards and the deadline for paying additional corporate income tax is no later than 12 months after the end of the fiscal year.

2. For regulations on minimum taxable income, the deadline for submitting the Information Declaration according to the Global Minimum Tax Regulations, the Additional Corporate Income Tax Declaration accompanied by the Explanation of the difference due to the difference between financial accounting standards and the deadline for paying additional Corporate Income Tax is no later than 18 months after the end of the fiscal year for the first year the multinational corporation is subject to application; no later than 15 months after the end of the fiscal year for the following years.

Thus, for the regulations on minimum taxable income (IIR), the deadline for paying additional corporate income tax is no later than 18 months after the end of the fiscal year for the first year the multinational corporation is subject to application and 15 months after the end of the fiscal year for the following fiscal years.

In addition, according to the provisions of Clause 9, Article 6 of Resolution 107/2023/QH15:

Pursuant to the provisions of Article 6 of Resolution 107/2023/QH15, Law on Tax Administration 2019 and relevant legal provisions, the Government regulates tax administration contents for additional corporate income tax according to regulations to prevent global tax base erosion.

Who is responsible for supervising the application of additional corporate income tax according to global minimum tax regulations?

Pursuant to Article 7 of Resolution 107/2023/QH15, implementation organization:

Implementation organization

1. Assign the Government and Ministries, within the scope of their duties and powers, to be responsible for organizing and implementing the contents and policies specified in this Resolution; Urgently prepare the necessary conditions to ensure the implementation of the Resolution; Focus on organizing and implementing multilateral cooperation activities on automatic information exchange to serve the collection of global minimum tax; Develop an official implementation plan and roadmap, assign responsibilities, organize apparatus and resources to promptly meet the implementation capacity of tax authorities, and take measures to improve voluntary compliance for taxpayers.

2. The Standing Committee of the National Assembly, the Ethnic Council and Committees of the National Assembly, National Assembly delegations, National Assembly deputies, People’s Councils of provinces and centrally-run cities, the Vietnam Fatherland Front and member organizations of the Front, within the scope of their duties and powers, supervise the implementation of this Resolution.

Thus, within the scope of their duties and powers, the following subjects are responsible for supervising the application of additional corporate income tax according to global minimum tax regulations:

– Standing Committee of the National Assembly,

– The Nationalities Council and Committees of the National Assembly,

– National Assembly delegations,

– Member of the National Assembly,

– People’s Councils of provinces and centrally run cities,

– Vietnam Fatherland Front and its member organizations.