Proposal for an Additional Corporate Income Tax Under the Global Anti-Base Erosion Rules

The Ministry of Finance stated that the issuance of a National Assembly Resolution amending and supplementing certain provisions of Resolution No. 107/2023/QH15 dated November 29,November 2023 of the National Assembly on the application of a supplementary corporate income tax in accordance with global anti-base erosion regulations is consistent with the global minimum tax rules under Pillar 2 and OECD guidelines; it does not violate any international treaties to which Vietnam is a party. At the same time, it aims to resolve difficulties for key investment projects with specific characteristics; enhance flexibility in implementation; and promptly address emerging issues to ensure a stable investment environment.

In the draft, the Ministry of Finance proposes adding Clause 9a to Article 4 of Resolution No. 107/2023/QH15 as follows:

"9a. The minimum standard domestic corporate income tax liability shall be set at 0 (zero) for the fiscal year for enterprises implementing power plant projects under the Build-Operate-Transfer (BOT) mechanism with a government guarantee (hereinafter referred to as BOT power projects), provided that the Build-Operate-Transfer contract includes tax commitments and was signed prior to the effective date of Resolution No. 107/2023/QH15 (January 1, 2024).

In cases where the enterprise implementing the BOT Power Project is a constituent entity of a multinational corporation with more than one constituent entity in Vietnam, the minimum standard domestic supplementary corporate income tax for this enterprise is the amount allocated based on the income criteria under the Global Minimum Tax Regulations from the multinational enterprise group’s compliant minimum domestic supplementary corporate income tax and the allocated tax amount is determined to be 0 (zero).

In cases where an enterprise implementing a BOT power project is the sole constituent entity or the sole joint venture of a multinational group in Vietnam, the enterprise shall file its tax return in accordance with the provisions of Article 6 of this Resolution and report the qualified domestic minimum supplementary corporate income tax as 0 (zero)."

According to the Ministry of Finance, during the drafting and consultation process for the issuance of Resolution No. 107/2023/QH15, the issue of ensuring incentives for investment projects was raised. To ensure a favorable investment environment in Vietnam, on December 31, 2024, the Government issued Decree No. 182/2024/NĐ-CP regulating the establishment, management, and use of the Investment Support Fund to assist enterprises that meet the criteria and conditions for support from the Fund.

However, during this process, enterprises implementing BOT power projects failed to identify, assess, and report the specific financial impacts in a timely and clear manner. Consequently, the current mechanism for implementing the Minimum Domestic Corporate Income Tax (QDMTT) does not exempt these projects from its application.

The Ministry of Finance stated that the aforementioned amendment aims to establish a mechanism equivalent to an exemption from the MCT (specifically, setting the minimum qualified domestic corporate income tax at zero) for enterprises implementing government-guaranteed BOT power projects (GGU).

Amendments and Improvements to Certain Provisions

In the draft, the Ministry of Finance proposes to amend and supplement Clause 4 of Article 3 of Resolution No. 107/2023/QH15 as follows:

1. The ultimate parent company is a company within a multinational corporation that exercises direct or indirect control over other companies and organizations within that multinational corporation, is not itself controlled by any other company or organization, and the ultimate parent company’s consolidated financial statements are not consolidated into the financial statements of any other company or organization worldwide.

According to the Ministry of Finance, the aforementioned amendments and refinements to the wording are intended to standardize the definition of the ultimate parent company, ensure the consistency of the legal system, ensure the feasibility of tax administration, and avoid international legal conflicts.

The draft also proposes amending and supplementing Clause 2 of Article 8 of Resolution No. 107/2023/QH15 as follows:

2. During the implementation of this Resolution, the Government is authorized to issue a Decree to address issues arising that are not covered by this Resolution and to report to the National Assembly at its next session. When issuing a Decree, the Government must ensure compliance with the Party’s regulations on the control of power, safeguard national interests, the interests of citizens and businesses, ensure conditions for enforcement, and assume responsibility for the provisions issued.

The Ministry of Finance stated that the aforementioned amendments and improvements, aimed at supplementing a decentralization mechanism to enable the Government to address issues arising during the implementation of the Resolution, are consistent with the policy outlined in Resolution 66-NQ/TW dated April 30, 2025, issued by the Politburo on innovating the work of lawmaking and enforcement to meet the requirements of national development in the new era.

The supplementary provisions in the draft Resolution stipulate that the minimum domestic corporate income tax rate for enterprises implementing BOT power projects shall be set at zero. This provision differs from the current provisions in Resolution No. 107/2023/QH15. Therefore, it is necessary to amend and supplement Clause 2 of Article 8 of Resolution No. 107/2023/QH15 accordingly.

At the same time, should similar cases arise after the Resolution is issued, delegating authority to the Government to issue a Decree to address such cases and report to the National Assembly will ensure consistency in legal provisions and promptly resolve difficulties and obstacles.

Readers are invited to view the full text of the draft and submit comments here./.

PL