Want to be in the loop?
subscribe to
our notification
Business News
VIETNAM SET TO IMPLEMENT GLOBAL MINIMUM TAX
Vietnam is poised to adopt global minimum tax (GMT) regulations, a move set to impact 122 foreign investment conglomerates and strengthen the country's fiscal framework in line with international standards.
Le Quang Manh, chairman of the National Assembly's Finance and Budget Committee, underscored the necessity of Vietnam adopting the GMT guidelines at a meeting on November 10, 2023.
“Without incorporating the GMT regulations, Vietnam risks foreign investing countries levying additional corporate income taxes - potentially up to 15 per cent - on multinational corporations operating within its borders but paying less than the stipulated minimum tax rate,” he said.
In a bid to safeguard Vietnam's fiscal sovereignty in the face of the GMT coming into effect in 2024, a consensus has emerged within the Finance Committee.
The committee advocates for the passage of a legal framework, essential to providing a robust basis for foreign-invested enterprises within Vietnam to comply with the additional corporate income tax mandates domestically, rather than in their countries of origin.
Further elaborating on the country's proactive approach, Manh said, “The prompt enactment of this resolution is a testament to Vietnam's dedication to align with the GMT standard from January 1, 2024. Such a move is crucial to fortifying investor trust in the robustness and reliability of Vietnam's legal and fiscal environment.”
Drawing from the government’s detailed analysis of 2022 corporate income tax settlements, Manh revealed that an estimated 122 foreign investment conglomerates were likely to be encompassed by this resolution.
The projected additional corporate income tax revenue from these entities is anticipated to be around $615.61 million.
The implications for Vietnam's domestic corporate sector are also significant. The government's projections indicate that around six major domestic conglomerates could be subject to the resolution, potentially leading to an additional tax inflow of $3.08 million from their international operations, in scenarios where the host countries have not implemented the GMT.
A notable aspect of the proposed tax reform is its application to the domestic income of these conglomerates. Starting from 2025, even income taxed below 15 per cent domestically will be subject to a minimum supplementary corporate income tax.
Source: VIR
Related News
ESG SERIES MASTERCLASS
Join the ESG Series Masterclass today and be a part of the solution led by our team of industry experts Bao Nguyen, Betty Pallard, Chi Nguyen, Jonathan SOURINTHA - HRK Group - PVA PRO - GPS (iBAG), Markus Klemmer, Paula Fajardo, Sergio Pereira da Silva along with many more to come…
VIETNAM’S GDP TO GROW 5.5% THIS YEAR – WB
This forecast is based on the assumption of a moderate recovery in manufacturing exports in 2024, fueled by rebound growth of 8.5% year-on-year in the fourth quarter of 2023 and 17.2% year-on-year in the first quarter of 2024, reflecting strengthening global demand, said Dorsati Madani, senior country economist at the WB in Vietnam.
FARE REFUND FOR VISA REJECTION
Cathay Pacific will offer full refunds for cases of visa rejection to provide you with the confidence to explore the world with ease. If you are planning to fly to a destination that requires an entry visa, you can now book with greater peace of mind.
MOIT PROPOSES SCHEME TO BOOST RENEWABLE ENERGY PROCUREMENT
The proposed Direct Power Purchase Agreement (DDPA) mechanism, outlined in the draft decree, targets organisations and individuals consuming electricity from the 22kV power grid or higher, with a monthly consumption averaging 500,000kWh. However, residential households are excluded from direct procurement.
REAL ESTATE BONDS PLACE PRESSURE ON ISSUING FIRMS
The ministry’s recent report underscores concerns within Vietnam’s corporate bond market for 2023 and 2024. It emphasizes the critical need to address hindrances to the real estate sector in line with the objectives provided in Government Resolution No. 33/NQ-CP, which aims to stabilize the industry.
FOUR COMMODITIES POST Q1 EXPORT VALUE OF OVER 5 BILLION USD
The total export turnover of agricultural, forestry, and fisheries products in the first three months of 2024 is estimated to reach 13.53 billion USD, an increase of 21.8% compared to the same period of 2023.