Improving Vietnam’s Global Minimum Tax Policy24/04/2023
On April 18, in Hanoi, the Ministry of Finance held a scientific conference with the theme: “Global minimum tax rules: Experiences of countries, expected impacts and recommendations for solutions for Vietnam”.
The global minimum tax rule is a progressive tax reform that aims to limit the fact that many large companies plan to minimize taxes by shifting profits to tax havens or doing business via digital platforms. transnational without a physical presence.
Speaking at the opening of the seminar, Minister of Finance Ho Duc Phuc said that according to the Ministry of Finance’s statistics, there are currently 1,015 foreign-invested enterprises in Vietnam whose parent companies are eligible to apply. global minimum tax. Which, more than 70 businesses are likely to be affected by the global minimum tax when it is applied in 2024.
If the country where the parent company is located implements the global minimum tax, these countries will receive an additional difference in 2024, estimated to exceed 12 trillion Vietnamese dongs. Therefore, tax incentives will no longer have much effect, posing a significant challenge to maintaining the competitiveness of Vietnam’s investment environment. At the seminar, Mr. Dang Ngoc Minh, Deputy Director of the Taxation Bureau of the Ministry of Finance, stated that if Vietnam does not apply the global minimum tax, the national income tax revenue will not be affected. However, if Vietnam adopts a qualified domestic minimum tax rate, Vietnam will have the right to impose additional tax rates on foreign direct investment (FDI) enterprises that enjoy a lower than the minimum tax rate of 15% in Vietnam, thereby increasing the national budget revenue. If Vietnam does not impose an additional corporate income tax, all preferential income of existing enterprises will be recovered by developed countries investing in Vietnam.
In order to limit the negative impact of the global minimum tax rate on Vietnam’s investment attractiveness, Mr. Dang Ngoc Minh said it is necessary to take direct or indirect financial support measures, but it is necessary to ensure that it does not violate the global minimum tax rate rules and comply with international commitments and practices. Open and transparent, reducing adverse impacts on the investment environment.
The supporting solutions to be studied may include supporting enterprises to invest in production infrastructure, industrial production fixed assets investment, environmental protection, workers’ housing support, social insurance support and other processes. Worker health, supporting research and development, high-tech applications, and environmental protection technologies. In order to implement the national aid plan, it is also necessary to arrange financial, land, and human resource training to maintain the attractiveness and stability of the investment environment.
Within the framework of the workshop, the delegates together focused on clarifying several key contents such as the main contents of the global minimum tax rule; implementation status and orientation of applying the global minimum tax rule of some countries; analyzing and assessing the impacts of the implementation of the global minimum tax on the world and Vietnam’s economy and investment; timely response measures, ensuring Vietnam’s tax collection rights as well as the attractiveness of the investment environment.
Based on the above discussion, the workshop suggested many new issues of concern for managers, policymakers, lecturers, and researchers to contribute to the improvement of institutions and infrastructure. regulations and policies related to the global minimum tax.
Source: Quan doi nhan dan E-News