Global Minimum Tax (GMT) Consulting Services - TGS Vietnam
1. What is Global Minimum Tax (GMT)?
Global Minimum Tax (GMT) is an initiative of the Organization for Economic Cooperation and Development (OECD) aimed at ensuring multinational corporations pay fair taxes in the countries where they operate. This regulation sets a minimum tax rate of 15% for 2023 and 2024, 16% for 2025, and 17% for 2026. It applies to companies with global revenues of over 750 million EUR in at least two of the four consecutive years preceding the fiscal year in which the regulation applies.
GMT ensures that international corporations contribute fairly to the countries where they operate, preventing illegal profit shifting. This is also an important step in the fight against tax evasion and fraud, according to the Global Anti-Base Erosion (GloBE) rules.
Global Minimum Tax:
On November 29, 2023, the Vietnamese National Assembly issued Resolution No. 107/2023/QH15 regarding the implementation of the additional corporate income tax under the Global Anti-Base Erosion (GloBE) rules, effective from January 1, 2024. This regulation includes both Qualified Domestic Minimum Top-up Tax (QDMTT) and the Income Inclusion Rule (IIR).
Applicability: Member companies of Multinational Enterprises (MNEs) with consolidated revenue of 750 million EUR or more in at least two of the four consecutive years immediately preceding the fiscal year the regulation applies.
Global Minimum Tax Rate: 15% for 2023 and 2024, 16% for 2025, and 17% for 2026.
QDMTT Application Principle: This applies to entities in Vietnam of multinational groups with a foreign parent company, or Vietnamese multinational groups. Deadline: 12 months after the end of the fiscal year.
IIR Application Principle: This applies to the parent company in Vietnam (including ultimate parent, intermediate parent, or partially owned parent) of multinational groups holding ownership rights in foreign entities. Deadline: 18 months after the end of the fiscal year for the first year; 15 months for subsequent years.
2. Why is GMT Important?
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Ensures Fair Taxation: GMT ensures that large companies contribute fairly to the economies of the countries where they operate.
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Higher Tax Revenues in Operating Countries: Countries where businesses actually operate will collect a more reasonable portion of taxes.
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Reduces Tax Race: GMT reduces the possibility of countries engaging in a tax-cutting race to attract investment while maintaining a fairer business environment.
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Promotes Transparency: GMT promotes transparency in the global tax system, helping to reduce fraud and prevent tax base erosion.
3. Current Status of Global Minimum Tax (GMT) in Vietnam
a) Vietnam Faces Challenges in Implementing GMT: As a member of various international organizations like the OECD, Vietnam is under pressure to apply GMT to ensure tax transparency and fairness in the context of economic integration. However, Vietnam has not yet issued official legal documents on GMT, creating a lack of guidance for businesses.
b) Impact on Businesses: Many foreign-invested enterprises (FDIs) in Vietnam currently benefit from tax incentives, such as preferential tax rates or tax exemptions in industrial zones and economic zones. However, GMT may reduce the effectiveness of these incentives. Businesses will need to adjust their financial and accounting strategies to comply with GMT's new requirements, resulting in increased management costs.
c) Actions from the Vietnamese Government: The government is studying and developing solutions to adapt to GMT, including:
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Reviewing tax incentives to align with international regulations.
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Proposing measures to protect national interests and attract foreign investment.
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Coordinating with international organizations and experts to build a legal framework that meets GMT's requirements.
d) Opportunities and Challenges for Vietnam:
Opportunities:
Challenges:
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Reduced investment attractiveness: Tax incentives will no longer be as effective, reducing Vietnam’s appeal to investors.
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Increased pressure for reform: Vietnam must quickly reform tax policies to align with global trends.
4. Our GMT Tax Consulting Services
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Impact Assessment: A comprehensive evaluation of how GMT affects your business.
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Consulting and Compliance: Helping businesses understand and comply with GMT regulations to meet tax requirements.
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Training: Organizing training sessions for finance and management teams on GMT regulations.
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Tax Strategy: Proposing strategies to optimize tax costs and minimize risks for your business.
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Tax Filing Support: Assisting businesses in filing GMT tax returns and liaising with tax authorities and relevant partners.
Our Solutions:
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Guiding clients to fully understand GMT regulations.
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Assisting clients in preparing required documents and filing GMT tax returns.
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Offering training sessions on GMT rules.
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Supporting clients in working with their tax or finance team to devise GMT tax strategies.
Why Choose TGS Vietnam’s Global Minimum Tax Consulting Services?
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High Expertise: TGS boasts a team of highly experienced professionals in international tax and global minimum tax, staying up-to-date with the latest tax regulations to help businesses comply effectively.
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Customized Solutions: Our consulting services are tailored to the specific industry and country your business operates in, ensuring optimal results in global tax strategies.
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Confidentiality: We guarantee the utmost confidentiality of all client information and documents during the consulting process, ensuring businesses feel secure and confident.
Contact Us Now for Global Minimum Tax Consulting!
📞 Hotline: 0919 191 448
📩 Email: info@tgsvietnam.com.vn
🌐 Website: tgsvietnam.com.vn
TGS Vietnam is a trusted partner helping businesses optimize their international tax strategies and comply with global minimum tax requirements, ensuring sustainable growth and minimizing tax risks.
