Global minimum tax conference to help Vietnam maintain, improve FDI attraction

By Nguyen Tuong
Fri, February 24, 2023 | 7:05 am GMT+7

Policymakers, economic experts, business leaders, and tax consultants in Vietnam are taking part in a conference held by The Investor to help Vietnam maintain its status as an FDI destination while the global minimum tax (GMT) rules are enforced worldwide.

Almost 50 delegates representing ministries and government agencies, economic experts, representatives of business associations, law and auditing firms join the Friday event (click to access the conference).

Dr. Nguyen Anh Tuan, Editor in Chief of The Investor (www.theinvestor.vn), delivers the opening speech at the event. Photo by The Investor/Trong Hieu.

Dr. Nguyen Anh Tuan, Editor in Chief of The Investor (www.theinvestor.vn), delivers the opening speech at the event. Photo by The Investor/Trong Hieu.

Dr. Nguyen Anh Tuan, Editor-in-Chief of The Investor, head of the conference organizing board, said the event followed the first workshop held last June also on GMT and Vietnam.

The conference this year updates the progress of implementing GMT globally, share experiences of investment receiving countries, and propose solutions, mechanisms and policies to ensure the right to collect taxes in accordance with OECD regulations and maintain the competitiveness of Vietnam as an FDI destination.

Governments of the FDI investing and receiving countries have been taking drastic actions in considering and making policies related to GMT (OECD Pillar II). On December 15, the EU officially approved the plan to apply the minimum tax rate of 15% from 2024.

South Korea’s National Assembly decided that this country will apply GMT in 2024. The Japanese government has also announced the Draft Tax Reform, moving towards the adoption of a global minimum tax from the fiscal year 2024.

South Korea and Japan are major sources of FDI inflows to Vietnam. Therefore, Vietnam’s GMT application will have a direct impact on many big foreign-invested enterprises. The GMT, a once-in-a-lifetime global tax reform, will apply to multinational companies with revenue above 750 million euros.

Virginia Foote, vice chairwoman of AmCham Hanoi (left), and Robert King, Indochina tax market leader at EY. Photo by The Investor/Trong Hieu.

Virginia Foote, vice chairwoman of AmCham Hanoi (left), and Robert King, Indochina tax market leader at EY. Photo by The Investor/Trong Hieu.

Dr. Phan Duc Hieu, a standing member of the Economic Committee of Vietnam’s National Assembly, said that the Pillar II impact is just ahead, not far, therefore Vietnam needs to act quickly thereby offering appropriate solutions.

Sharing his opinion, international experts said Vietnam needs to speed up the process of working out policies and solutions relevant to GMT so as not to lose the right to collect taxes.

These efforts must harmonize the interests of both sides, the Vietnamese government and investors, encouraging them to maintain and expand investment in Vietnam, while the country would be able to lure more FDI capital in the new period.

Dr. Can Van Luc, chief economist at state-controlled BIDV bank, raised four recommendations to the government.

Firstly, he said the Ministry of Finance and the government’s GMT working group need to quickly study all impacts of the GMT application to proactively propose appropriate plans and solutions.

Secondly, both of them should propose the government submit drafts to the National Assembly for early promulgation and adjustments of tax and accounting policies in line with international standards, and in line with Vietnam’s tax laws.

Specifically, tax authorities need to review tax-related regulations, especially ones on tax management, to submit amendments to tax declaration regulations and procedures in line with OECD standards for early promulgation. They should come out in 2023 when GMT comes into effect across the world.

Dr. Can Van Luc, chief economist at state-controlled BIDV bank. Photo by The Investor/Trong Hieu.

Dr. Can Van Luc, chief economist at state-controlled BIDV bank. Photo by The Investor/Trong Hieu.

Luc said if it is not possible to complete the tasks before 2024, it is necessary to carefully study the OECD rules and guidelines, and consider developing and promulgating a qualified Vietnamese minimum tax policy as a quick response mechanism to protect the right to collect taxes, not letting the rights slide to other countries. Such can be viewed as a tax mechanism parallel to GMT, as Malaysia is acting.

Third, he said the finance ministry needs to assess the impact of GMT rules because influences by preferential policies are different for each country, multinational corporation, and investor. Therefore, studying a specific country is essential to develop an appropriate roadmap, Luc stressed.

Fourth, Vietnam needs to review and change its policies to attract FDI toward focusing on improving competitiveness from such factors as improving the business environment, supporting the training of skilled workers, and infrastructure, and developing support industries.

Hong Sun, chairman of the Korean Chamber of Commerce (Kocham) in Vietnam, said that many countries have been implementing an open business consultation process on issues related to Pillar 2. The Vietnamese government's special working group should also learn these experiences, and soon issue consulting documents so that subjects governed by GMT could have their opinions in this lawmaking process.

"This is very important as it will help Vietnam work out policies closely related to reality, reflect the business community’s desires, and harmonize the interests of the government and investors," he said.

Sun suggested the working group should quickly publicize official information channels through which the subjects governed can raise their opinions. Doing the above-mentioned things will help support and accelerate the GMT application in Vietnam.

Prof. Dr. Vu Minh Khuong, lecturer at the Lee Kuan Yew School of Public Policy, University of Singapore, stressed that the Pillar II rule on GMT that will come into force at the end of 2023 is an invaluable opportunity for Vietnam.

According to the Singapore-based professor, many wholly FIEs in Vietnam are very large firms and they enjoy tax incentives much lower than the GMT minimum of 15%. Therefore, Vietnam is likely to receive additional huge resources, possibly up to billions of US dollars per year, to invest in development and improve its competitiveness.

The professor added that, in order to retain and attract strategic investors, Vietnam needs to develop preferential and supportive policies in the coming decades. The government may consider identifying strategic investors as major investors, with R&D tasks and high technology, to offer effective incentives. This would help Vietnam boost its domestic production capacity, thus helping to improve national productivity and creativity.

Khuong also said it is advisable for Vietnam to smartly weigh the possibility of providing monetary support for strategic investors and FDI enterprises governed by GMT.

PwC Vietnam general director Dinh Thi Quynh Van stressed that it is necessary to have a new system of investment incentives to prevent tax benefits granted by Vietnam from being transferred to other countries and to ensure Vietnam’s competitiveness in attracting FDI.

She said Vietnam should introduce a new FDI policy with subsidies or tax deductions able to trade off in the new period, which is GMT application worldwide.

“Such tax reform initiatives will help Vietnam maintain its taxing rights while attracting more investment from multinationals by reducing capital costs and promoting businesses to participate in high-tech sectors necessary for national economic growth, thereby accumulating technology, experience, and know-how in Vietnam," she said.

Comments (0)
  • Read More
Vietnam PM asks Marubeni to expand investment in gas-fired, offshore wind power

Vietnam PM asks Marubeni to expand investment in gas-fired, offshore wind power

Marubeni should expand its activities in Vietnam in the fields of gas-fired and offshore wind power, export of electricity to ASEAN countries, and development of AI and big data, said Prime Minister Pham Minh Chinh.

Economy - Tue, July 15, 2025 | 12:21 pm GMT+7

Vietnam’s wood pellet industry needs production standardization to meet global demand: experts

Vietnam’s wood pellet industry needs production standardization to meet global demand: experts

Businesses should invest in developing dedicated raw material zones to reduce the Vietnamese wood pellet industry’s reliance on secondary supply sources and ensure compliance with legality and sustainability standards, said an expert.

Economy - Tue, July 15, 2025 | 9:18 am GMT+7

Riding out tariff turbulence, investment funds in Vietnam report strong growth gains

Riding out tariff turbulence, investment funds in Vietnam report strong growth gains

Many equity funds in Vietnam have posted strong growth returns, with gains exceeding 30% since the market’s April 10 trough in 2025, data collected by The Investor shows.

Finance - Tue, July 15, 2025 | 9:00 am GMT+7

Singapore supports businesses, workers amid US tariff pressures

Singapore supports businesses, workers amid US tariff pressures

The Singapore Economic Resilience Taskforce (SERT) has announced measures to help Singapore companies adapt to a new U.S. tariff.

Southeast Asia - Mon, July 14, 2025 | 10:11 pm GMT+7

Malaysia makes efforts to minimize US tariff’s impacts

Malaysia makes efforts to minimize US tariff’s impacts

Malaysia’s top export to the U.S. - electronics and electrical products - will face the biggest brunt of a 25% tariff hike that the U.S. has imposed on the country, said head of School of Business under the Monash University Malaysia Prof Nafis Alam.

Southeast Asia - Mon, July 14, 2025 | 10:08 pm GMT+7

Thailand faces $6.14 bln export loss if US tariff is 25-36%: forecast

Thailand faces $6.14 bln export loss if US tariff is 25-36%: forecast

Thailand could lose up to THB200 billion ($6.14 billion) in export value this year if the U.S. imposes new tariffs ranging from 25-36% on Thai goods, according to a forecast from the University of the Thai Chamber of Commerce (UTCC).

Southeast Asia - Mon, July 14, 2025 | 10:06 pm GMT+7

Southern Vietnam province Tay Ninh okays many high-tech agri projects

Southern Vietnam province Tay Ninh okays many high-tech agri projects

Tay Ninh authorities recently granted in-principle approvals to a string of high-tech agricultural projects, paving the way for significant development opportunities in the southern province.

Industries - Mon, July 14, 2025 | 10:00 pm GMT+7

Construction ministry backs $1.95 bln port project in southern Vietnam

Construction ministry backs $1.95 bln port project in southern Vietnam

Geleximco Group's Cai Mep Ha container and general port project aligns with the national master plan and the master plan for Vietnam’s seaport system, according to the Ministry of Construction.

Infrastructure - Mon, July 14, 2025 | 5:09 pm GMT+7

Electric vehicles in Vietnam: 7 years of development and double-digit growth prospect

Electric vehicles in Vietnam: 7 years of development and double-digit growth prospect

The shift toward greener mobility has been underway in Vietnam and the local electric vehicle (EV) market is expected to see double-digit growth thanks to favorable policies, infrastructure development, automakers’ efforts, and a young consumer base.

Economy - Mon, July 14, 2025 | 4:46 pm GMT+7

HCMC apartment prices continue to rise as supply hits 10-year low in H1

HCMC apartment prices continue to rise as supply hits 10-year low in H1

The apartment market in former Ho Chi Minh City continued to see rising prices since the total supply in the first six months of 2025 hit the lowest since 2015, according to real estate consultancy firm DKRA.

Real Estate - Mon, July 14, 2025 | 4:03 pm GMT+7

Buyer secures Sunshine Group’s Hanoi shophouse at 15% lower than market price via livestream

Buyer secures Sunshine Group’s Hanoi shophouse at 15% lower than market price via livestream

A buyer successfully secured a shophouse at property major Sunshine Group’s Noble Palace Tay Thang Long project in Hanoi for VND11 billion ($421,295), VND2.5 billion or 15% below market value, during a bidding livestream on the NobleGo platform held last Friday evening.

Companies - Mon, July 14, 2025 | 1:37 pm GMT+7

Vietnam’s major rice exporter Vinafood 1 tasked with developing mega agri-logistics hub

Vietnam’s major rice exporter Vinafood 1 tasked with developing mega agri-logistics hub

Vinafood 1, Vietnam's top rice exporter, has been asked to develop an integrated hub for agricultural trade, logistics, warehousing, exports, customs, banking, irradiation, and research and development activities.

Industries - Mon, July 14, 2025 | 12:19 pm GMT+7

Vietnam conglomerate Masan to issue over 7.5 mln ESOP shares

Vietnam conglomerate Masan to issue over 7.5 mln ESOP shares

Vietnam’s leading multi-sector conglomerate Masan Group will issue up to 7.5 million MSN shares under an employee stock ownership plan (ESOP) at a par value and issue price of VND10,000 ($0.38) apiece.

Companies - Mon, July 14, 2025 | 11:26 am GMT+7

Investment funds in Vietnam upbeat about new US tariff

Investment funds in Vietnam upbeat about new US tariff

With Vietnam soon reaching a trade agreement with the U.S., major uncertainties have significantly diminished, positively impacting investor sentiment in the stock market, according to investment funds.

Finance - Mon, July 14, 2025 | 9:04 am GMT+7

AI, data platform investment unlocks huge opportunities to enhance customer experience: Masan CEO

AI, data platform investment unlocks huge opportunities to enhance customer experience: Masan CEO

Vietnam’s leading multi-sector conglomerate Masan Group has made strong investments in AI, big data, and integrated supply chains to improve its operational efficiency, optimize costs, and better serve Vietnam’s 100 million consumers, said CEO Danny Le.

Companies - Sun, July 13, 2025 | 6:51 pm GMT+7

HCMC poised to become Southeast Asia's innovation, financial hub following merger: experts

HCMC poised to become Southeast Asia's innovation, financial hub following merger: experts

Ho Chi Minh City, Vietnam’s southern metropolis, is expected to establish itself as a hub for finance, manufacturing, trade, logistics, and innovation in Southeast Asia, after its merger with neighboring provinces.

Economy - Sun, July 13, 2025 | 1:56 pm GMT+7