Vietnam will soon take the initiative to gain the right to impose the global minimum tax

DNHN - Consulting firms and foreign-invested businesses (FDI) concur that Vietnam should soon take the initiative to obtain the authority to impose the global minimum tax.

Regarding the global minimum tax, Mr. Nguyen Duc Chi - Deputy Minister of Finance stated that consulting organizations and foreign-invested enterprises (FDI) all recommend Vietnam take the initiative to acquire the right to tax as soon as possible. This.

"This requires constructing and modifying the legal system to win the right to tax the global minimum tax at the global minimum tax rate, which necessitates modifying the incentives that Vietnam has previously committed to," he explained.

Encouraging incentives by the conditions of the global minimum tax policy as well as other policies to which Vietnam is a signatory are also essential. devoted members.

Deputy Minister Nguyen Duc Chi stated that the Ministry of Finance and the Ministry of Planning and Investment have studied and consulted on numerous direct and indirect financial support solutions, such as increasing investment in Hanoi's infrastructure construction. Support industrial parks, training of human resources, and research and development.

Currently, over one thousand FDI enterprises in Vietnam have parent companies subject to the global minimum tax. From 2024 onwards, the global minimum tax is likely to affect more than seventy businesses.

Dang Ngoc Minh, deputy general director of the General Department of Taxation, stated that the additional tax to the minimum tax rate of 15% will enhance Vietnam's international integration in general. bringing the tax system into conformity with international practices and norms by modifying corporate income tax policies and laws.

Mr. Minh acknowledged that "additional taxation to a minimum tax rate of 15% could increase state revenue on corporate income tax in the short term by raising the tax rate to the global minimum and could be allocated tax extra collection due to allocation rules Rules for Sub-Minimum Taxable Payments (UTPR)".

Simultaneously, it will prevent tax competition between nations and restrict tax evasion, tax avoidance, transfer pricing, and profit transfer.

According to the analysis of the Deputy Director of the General Department of Taxation, parent countries will tax foreign-invested enterprises in Vietnam whose parent companies are subject to the application of Pillar 2. enhancing the differential tax rate by the principles of the second pillar during the initial period of corporate income tax incentives.

"Should Vietnam impose additional taxes, increasing the minimum tax rate to 15%, the Vietnamese Government will face pressure from businesses impacted by pillar 2," Minh stated.

At the same time, the amendment of the corporate income tax policy and the corporate income tax law may have an impact on Vietnam's policy of attracting foreign investment.

Additionally, the head of the General Department of Taxation remarked that there is currently no correlation between lower corporate income tax rates and higher global FDI levels. There is no correlation when considering the FDI per capita or FDI in the green sector alone.

While other important FDI drivers such as market size, labor, stability, business environment, etc. play a significant role in determining investment decisions, market size is the most influential factor.

PV (t/h)