The National Assembly passed a Resolution on applying additional corporate income tax.

Presenting, explaining, accepting and revising the draft Resolution, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh said that the draft Resolution contains completely new content, with many different provisions, contrary to the current provisions of the Law on Corporate Income Tax and a number of other related laws. Therefore, according to the provisions of the Law on Promulgation of Legal Documents, this is a pilot Resolution and the name of the Resolution should have the word "pilot".

However, to ensure the certainty of the standard document when OECD or countries with related interests conduct peer review, the Standing Committee of the National Assembly proposes that the name of the Resolution does not include the word "pilot" but is applied as a pilot Resolution to have a legal basis for the application of new policy provisions, different from the provisions of current laws and resolutions. At the same time, it is proposed to keep the name of the Resolution as the draft to reflect the true spirit of OECD regulations and be consistent with common practices of countries.

Regarding the assignment of the Government to stipulate specific contents to be applied in case the OECD has revised and supplemented guidelines on the global minimum tax, the National Assembly Standing Committee believes that the global minimum tax is a new and complex policy, and the OECD and countries will have to work on it and perfect it at the same time. However, the main contents of the global minimum tax have been stipulated in the Model Regulation (similar to the level of the Law of the countries) which has been adopted by 120 countries and will be unlikely to change. Currently, the OECD Secretariat is continuing to update and will make amendments and supplements mainly to the administrative guidance documents which are documents detailing the technical regulations on revenue management (similar to the level of the sub-law guidance documents of the countries). If all the revised and supplemented guidelines of the OECD on implementation guidelines need to be reported to the National Assembly or the National Assembly Standing Committee, it will be very difficult to implement and not really suitable in terms of content.

In response to the opinions of National Assembly deputies, the National Assembly Standing Committee has finalized and expressed the content of this provision in Clause 3, Article 8 of the draft Resolution in the following direction: In case after the effective date of this Resolution, the Joint Cooperation Forum on Combating Base Erosion and Global Profit Shifting has guidelines for amending and supplementing the Regulation on Global Minimum Tax, the Government shall prescribe specific contents for implementation. In case there is content contrary to the provisions of this Resolution, it shall be reported to the National Assembly for consideration and decision. In urgent cases during the time the National Assembly is not in session, it shall be submitted to the National Assembly Standing Committee for consideration and decision and reported to the National Assembly at the nearest session.

Some opinions suggested that the Government should make a comprehensive assessment of the investment environment when implementing the global minimum tax in order to have appropriate investment incentive solutions, resolve problems for current investors as well as clarify the tax incentive regime for new investors entering Vietnam. Some opinions suggested clarifying whether enterprises investing in Vietnam after the Resolution takes effect will be entitled to tax investment incentives according to the provisions of the Law on Corporate Income Tax or to tax rates according to the provisions of the Resolution.

Regarding these contents, the National Assembly Standing Committee believes that the Government has not yet made a comprehensive assessment of the investment incentive and promotion system, including incentives through corporate income tax as well as non-tax measures to develop alternative plans after the global minimum tax comes into effect. The Corporate Income Tax Law has not been amended, so after this Resolution comes into effect, multinational corporations with new investments in Vietnam will be regulated by the Corporate Income Tax Law and this Resolution.

Accordingly, investors will initially still enjoy tax exemptions and reductions under the current Corporate Income Tax Law, and will then have to pay back these tax exemptions and reductions under the provisions of the Resolution on Global Minimum Tax and may also receive additional support outside of tax. Currently, the Government has only completed the draft of this Resolution for immediate issuance, resolving the issue of paying global minimum tax for current investors. The issue of tax regime for new investors will need to be further resolved by the Government when amending the Corporate Income Tax Law.

Therefore, the National Assembly Standing Committee recommends that the Government carry out a comprehensive assessment of the current system of tax incentive policies and promptly develop a project to amend and supplement the Law on Corporate Income Tax along with a plan to adjust the system of tax rates and tax incentives appropriately.