Impact of the global minimum tax on attracting Vietnamese investment

DNHN - Mr. Bui Ngoc Tuan, Deputy General Director of Tax Consulting Deloitte Vietnam, provided insight and specifics regarding the application of the financial information tax in Vietnam and its effects on the government and businesses.

In a recent interview, Mr. Bui Ngoc Tuan, Deputy General Director of Tax Consulting Deloitte Vietnam, provided insightful commentary on the application of the global minimum tax regime (TC) in Vietnam and its effect on attracting foreign investment to our nation.

Mr. Bui Ngoc Tuan admired the cooperation and concerted efforts of all parties involved in researching and enhancing the institution of financial income tax in Vietnam.

In his interview, Mr. Bui Ngoc Tuan praised the efforts of government agencies, the National Assembly, the Central Committee of the Party, as well as business organizations and business associations. Vietnam's industry, press agencies, and tax consulting firms, such as Deloitte Vietnam. In the past six months, these parties have participated in research, exchanged ideas, and held seminars, forums, and public meetings. This has created a multidimensional environment for the development and improvement of Vietnam's financial information tax mechanism.

Mr. Bui Ngoc Tuan emphasized that Vietnam's participation in financial income tax has been viewed by numerous experts and organizations as a necessary step toward Vietnam gaining the authority to collect taxes. The announcement of the draught Resolution of the Ministry of Finance has established a clear path for the implementation of financial income tax in Vietnam, while simultaneously assisting investors in understanding the orientation of the Vietnamese government and developing a business plan.

Mr. Bui Ngoc Tuan discussed the regulation on the standard minimum additional domestic tax (QDMTT) and the regulation on the sum of the minimum taxable income (IIR). He clarified that these regulations apply only to businesses and subsidiaries covered by Pillar 2 and have no bearing on businesses outside of this scope, which are still eligible for investment incentives. Present-day Vietnam.

Mr. Bui Ngoc Tuan explained that QDMTT and IIR are two important OECD regulations and that they will have a significant impact on attracting investment into Vietnam, particularly for multinational corporations with Vietnamese subsidiaries. These regulations, especially QDMTT, will significantly affect the domestic minimum tax collection of subsidiaries in Vietnam if their actual tax rates are below 15%. This implies that the current tax incentives for investors under Pillar 2 will lose some of their efficacy.

Mr. Bui Ngoc Tuan made several important recommendations for the government and businesses subject to financial income tax. For the Government, he proposed the Vietnameseization of international terms to make the detailed guidance document after the Resolution is issued suitable and close to the tax context of Vietnam. He also emphasized the importance of a comprehensive investigation and evaluation of accounting standards and financial reporting in Vietnam about the application of international law and IIR. Mr. Bui Ngoc Tuan suggested careful consideration of practical issues during policy implementation to provide appropriate direction.

According to Mr. Bui Ngoc Tuan, businesses subject to financial income tax comprehend the implications and make the necessary preparations to successfully and effectively implement the new regulations. This includes providing knowledge of the applicable regulations, assessing the impact of Pillar 2 on group companies in Vietnam, monitoring policy developments, and providing feedback to stakeholders.

Mr. Bui Ngoc Tuan concluded by discussing the future of investing in Vietnam in light of the implementation of the financial information tax in 2024. Participation in the financial market tax will assist in enhancing Vietnam's standing in the international policy system. According to him, the government utilizes this opportunity to reform tax policies to continue attracting investment.

"Vietnam's geographical location, relatively stable economic, social, and political environment, and dynamic, fast-growing economy continue to make it an attractive investment destination. The Government's confirmation of participation in the financial information tax also affirms Vietnam's voice in integrating with global trends, thereby enhancing Vietnam's standing in the eyes of its allies in terms of policy system transparency. domestic and international forums. In addition, if the Vietnamese Government can take advantage of this opportunity to reform tax incentive policies to be more in line with international standards (currently, many countries in the region (such as Thailand, India, and Singapore) are applying it), there will be more opportunities to continue attracting investment, Mr. Tuan emphasized.

Thanh Ha t/h