Peer reviews to referee global minimum tax implementation disputes: expert

By Tri Duc
Tue, May 7, 2024 | 1:38 pm GMT+7

The Global Minimum Tax being a complicated affair, peer reviews are likely to referee different interpretations, Jonathan Pemberton, a senior advisor with the Washington D.C.-based International Tax and Investment Center (ITIC), said Tuesday.

Answering queries at a workshop on "Pillar 2 Global Minimum Tax Implementation in Vietnam" held in Hanoi, the former senior official of the Organization for Economic Co-operation and Development (OECD), said "peer reviews of executive information run by global forums" would be a much more inclusive activity than institutional decisions.

Jonathan Pemberton, International Tax and Investment Center (ITIC) senior advisor, speaks at a workshop in Hanoi on May 7, 2024. Photo by The Investor.

Jonathan Pemberton, International Tax and Investment Center (ITIC) senior advisor, speaks at a workshop in Hanoi on May 7, 2024. Photo by The Investor.

Since OECD represents a small fraction of countries, a much more inclusive body is needed, he said.

Given the complexity of the Global Minimum Tax (GMT), some countries could be tempted to "fiddle" and offer tax incentives or simplify the rules, but that will not work, he said.

Pemberton said he expected competent authorities to discuss cases together and resolve disputes arising between the tax authorities and businesses. This process would eventually lead to a reduction in the number of GMT disputes, he added.

Multinational enterprises expect consistency in tax filings, so competent authorities should engage and support each other to help them, Pemberton said.

Geopolitics and GMT impacts

On the question of the GMT being approved by the United States, given its tendency not to join international treaties and the upcoming elections this year, Pemberton said the country’s stance did not really matter. The U.S. is going to enjoy additional tax revenues, he noted.

Besides, it is the Congress and not the White House that prepares tax laws; and the GMT enjoys support from both Democrats and Republicans, he said.

Regarding uncertainties about Pillar 1 of the Global Minimum Tax and possible impacts on Pillar 2, Pemberton commented: "Pillar 2 is the train that's left the station so I think everybody's on board and that's gonna happen."

Meanwhile, Pillar 1 was more of a "standoff" between developed and developing nations. The benefits for developing nations in Pillar 1 are only marginal so "if I were Vietnam," the choice would be to view developments from the sidelines.

The international workshop was organized by Vietnam's Association of Foreign Invested Enterprises (VAFIE) and the Washington D.C.-based International Tax and Investment Center (ITIC). The Investor (www.theinvestor.vn) and its sister Vietnamese-language Nha dau tu (www.nhadautu.vn), which are under the VAFIE, were directly involved in preparing for the workshop.

On November 29, 2023, Vietnam's National Assembly, the country's highest legislative body, passed a resolution on levying additional corporate income tax as per Global Anti-base Erosion (GloBE) Rules; applying a tax rate of 15% to taxpayers who are constituent entities of multinational enterprises with turnover in the Consolidated Financial Statements of the Ultimate Parent Entity (UPE) for at least two of the four years immediately preceding the fiscal year reaching €750 million or more.

The exceptions are government organizations, international organizations, non-profit organizations, pension funds, investment funds that are UPEs, real estate investment entities that are UPEs, entities with at least 85% of the asset value owned directly or indirectly through organizations specified in points ‘a’ to ‘e’ of this clause.

The resolution takes effect on January 1, 2024, applicable from fiscal year 2024. To make regulations on corporate income tax consistent, the parliament requested the Government to urgently complete the dossier of the (amended) Law on Corporate Income Tax project and submit it to the Standing Committee of the National Assembly. The National Assembly will consider adding it to the 2024 lawmaking agenda.

Comments (0)
  • Read More
Indonesia to end incentives for imported CBU BEVs in 2026

Indonesia to end incentives for imported CBU BEVs in 2026

The Indonesian government has confirmed that it will stop providing incentives for imported completely built-up (CBU) battery electric vehicles (BEVs) from 2026.

Southeast Asia - Tue, September 16, 2025 | 9:44 pm GMT+7

Aquatic sector advised to navigate challenges, secure exports to EU, US

Aquatic sector advised to navigate challenges, secure exports to EU, US

Despite positive production signals with growth in 2025 projected at 4.25%, Vietnam's aquatic sector is facing mounting export pressures, particularly strict technical barriers in major markets such as the EU and the U.S.

Companies - Tue, September 16, 2025 | 9:41 pm GMT+7

Vietnam pledges favorable conditions for UK businesses

Vietnam pledges favorable conditions for UK businesses

Finance Minister Nguyen Van Thang has affirmed Vietnam’s commitment to improving its investment environment and creating favourable conditions for foreign enterprises, including those from the UK.

Companies - Tue, September 16, 2025 | 9:29 pm GMT+7

Lotte Shopping plans to open more shopping malls in Vietnam

Lotte Shopping plans to open more shopping malls in Vietnam

South Korean retail giant Lotte Shopping has unveiled plans to open an additional two to three large-scale shopping malls in major Vietnamese cities by 2030, underscoring the country’s growing role in the group’s international expansion strategy.

Companies - Tue, September 16, 2025 | 9:25 pm GMT+7

Vietnam ratifies WTO Agreement on Fisheries Subsidies

Vietnam ratifies WTO Agreement on Fisheries Subsidies

Vietnam officially deposited its instrument of ratification of the Agreement on Fisheries Subsidies at the WTO General Council’s special session in Switzerland on Monday.

Companies - Tue, September 16, 2025 | 9:21 pm GMT+7

What makes NobleGo - Vietnam’s first home-bidding livestream platform - so notable?

What makes NobleGo - Vietnam’s first home-bidding livestream platform - so notable?

NobleGo – Vietnam’s pioneering AI-powered livestream real estate bidding platform developed by Sunshine Group – has completed its first 20 livestream sessions.

Real Estate - Tue, September 16, 2025 | 4:53 pm GMT+7

Japanese retailer Aeon to debut another northern Vietnam shopping mall by end-2026

Japanese retailer Aeon to debut another northern Vietnam shopping mall by end-2026

Japanese-backed Aeonmall Vietnam is ramping up construction on its Aeon Mall Ha Long project in Quang Ninh province, home to Ha Long Bay, with an aim to open it to the public by end-2026.

Industries - Tue, September 16, 2025 | 3:54 pm GMT+7

Hanoi terminates Vinaxuki auto plant project, repurposes land for commercial complex

Hanoi terminates Vinaxuki auto plant project, repurposes land for commercial complex

A long-stalled automotive manufacturing project by Xuan Kien Auto JSC (Vinaxuki) has been officially terminated by Hanoi authorities, and the reclaimed land in Phuc Thinh commune will be repurposed for a new commercial and service complex.

Industries - Tue, September 16, 2025 | 2:44 pm GMT+7

Central Vietnam province reviews investment proposal for thermal power project after Thai EGATi pullout

Central Vietnam province reviews investment proposal for thermal power project after Thai EGATi pullout

Authorities in the central province of Quang Tri are evaluating a proposal from Power Generation JSC 1 (EVNGENCO 1), a subsidiary of state utility Vietnam Electricity (EVN), to take over the Quang Tri thermal power plant project, following the withdrawal of Thai investor EGATi.

Energy - Tue, September 16, 2025 | 1:44 pm GMT+7

Amata to sell stakes worth $46 mln in Vietnam units to Novaland-tied buyers

Amata to sell stakes worth $46 mln in Vietnam units to Novaland-tied buyers

Amata VN, the Vietnam arm of Thailand’s leading industrial park developer Amata, has approved a plan for its subsidiary Amata City Long Thanh Urban JSC (ACLT) to sell its remaining 51% stakes in two entities to local developer Novaland-linked buyers.

Real Estate - Tue, September 16, 2025 | 12:19 pm GMT+7

Vietnam already meets FTSE's criteria for stock market status upgrade: Finance Minister

Vietnam already meets FTSE's criteria for stock market status upgrade: Finance Minister

Vietnam has fulfilled the criteria for a stock market status upgrade by FTSE Russell through reforms aimed at facilitating foreign investment inflows into its market, said Minister of Finance Nguyen Van Thang.

Economy - Tue, September 16, 2025 | 9:36 am GMT+7

Banks should be allowed to distribute, invest in mutual fund certificates: Vietnam's finance ministry

Banks should be allowed to distribute, invest in mutual fund certificates: Vietnam's finance ministry

The Ministry of Finance is proposing a key reform that would allow commercial banks to invest in and distribute mutual fund certificates, as part of a broader plan to restructure the investor base and foster the development of Vietnam’s fund management industry.

Finance - Tue, September 16, 2025 | 8:00 am GMT+7

E-commerce boom a major driver of Vietnam's packaging paper industry growth

E-commerce boom a major driver of Vietnam's packaging paper industry growth

Vietnam's paper packaging industry is entering a period of strong growth, with an average annual growth rate forecasted at 10% until 2030.

Companies - Mon, September 15, 2025 | 10:20 pm GMT+7

Vietnam needs support from UK in developing international financial center: Deputy PM

Vietnam needs support from UK in developing international financial center: Deputy PM

Permanent Deputy Prime Minister Nguyen Hoa Binh has called on the UK and the City of London to continue supporting and accompanying Vietnam in promoting and introducing its international financial center (IFC).

Finance - Mon, September 15, 2025 | 10:12 pm GMT+7

Vietnam enforces 8% capital adequacy ratio for banks from Sept 15

Vietnam enforces 8% capital adequacy ratio for banks from Sept 15

Commercial banks and foreign bank branches in Vietnam must maintain a minimum capital adequacy ratio (CAR) of 8%, including at least 4.5% in Tier 1 core capital and 6% in Tier 1 capital, starting from September 15.

Banking - Mon, September 15, 2025 | 10:04 pm GMT+7

Tool for wood traceability management debuts in Vietnam

Tool for wood traceability management debuts in Vietnam

The Vn-WoodID application has been officially launched in Vietnam, becoming a key tool contributing to wood traceability.

Companies - Mon, September 15, 2025 | 10:00 pm GMT+7