Vietnam has been known as an attractive country for investment due to its preferential tax incentives. With the application of a Global Minimum Tax (GMT), it will face many challenges in encouraging new investment from multinational
enterprises (MNEs)𒁏, granting tax incentives to existing foreign investors, maintaining current investors’ investment funds, and supportiꦓng their expansion plans in Vietnam.
With a threshold on applying the GMT from 2024, of consolidated revenues of over €750 million ($807 million), it is expected that 1,015 FDI companies in Vietnam and their parent companies will be subject to the GMT. Therefore, the Vietnamese Government needs to develop supporting policies and investment laws to reduce any impact and maintain the competitiveness of the country’s investment environment, via assessing the impact of increasing tax costs for FDI, attractive investment schemes for FDI sectors, and tax collection rights and incentive commitments to current FDI businesses in Vietnam; re-evaluate existing domestic tax laws to capture the impact of the GMT as well as develop non-tax preferential policies, for example subsidies and/or cuts in land rental fees and related land compensation fees, subsidies for supporting infrastructure, high-skilled worker training, supporting social housing for MNE workers, and cutting import taxes, etc.; obtaining opinions/recommendations from impacted MNEs and relevant ministries and agencies to develop suitable supporting policies; and studying
the im♒plementation of the GMT in other countries,particularly Asian countries, which is recommended for Vietnam to introduce attractive support policies and packages to help businesses impacted by the GMT.
The full article “Holistic approach on offer" conducted 𒆙by Ms Valerie Teo - Tax Partner of Grant Thornton Vietnam and Mr Nguyen Dinh Huy - Senior Manager, Tax Services of Grant Thornton Vietnam.
Source: Vietnam Economic Times
Vietnam has been known as an attractive country for investment due to its preferential tax incentives. With the application of a Global Minimum Tax (GMT), it will face many challenges in encouraging new investment from multinational
enterprises (MNEs), granting tax incentives to existing foreign investors, maintaining curre🐽nt investors’ investment funds, and supporting their expansion plans in Vietnam.
With a threshold on applying the GMT from 2024, of consolidated revenues of over €750 million ($807 million), it is expected that 1,015 FDI companies in Vietnam and their parent companies will be subject to the GMT. Therefore, the Vietnamese Government needs to develop supporting policies and investment laws to reduce any impact and maintain the competitiveness of the country’s investment environment, via assessing the impact of increasing tax costs for FDI, attractive investment schemes for FDI sectors, and tax collection rights and incentive commitments to current FDI businesses in Vietnam; re-evaluate existing domestic tax laws to capture the impact of the GMT as well as develop non-tax preferential policies, for example subsidies and/or cuts in land rental fees and related land compensation fees, subsidies for supporting infrastructure, high-skilled worker training, supporting social housing for MNE workers, and cutting import taxes, etc.; obtaining opinions/recommendations from impacted MNEs and relevant ministries and agencies to develop suitable supporting policies; and studying
the implementation of the GMT in other countrie💫s,particularly Asian countries, which is recommended for Vietnam to introduce attractive support policies and packages to help businesses impacted by the GMT.
T♑he full article “Holistic approach on offer" conducted by Ms Valerie Teo - Tax Partner of Grant Thornton Vietnam and Mr Nguyen Dinh Huy - Senior Manager, Tax Services of Grant Thornton Vietnam.
Source: Vietnam Economic Times Experts / Authors Valerie Teo Tax Partner View Profile