International workshop on Pillar 2 Global Minimum Tax implementation to be held in Hanoi

The Vietnam's Association of Foreign Invested Enterprises (VAFIE) and the Washington D.C.-based International Tax and Investment Center (ITIC) will hold an international workshop themed "Pillar 2 Global Minimum Tax Implementation in Vietnam" on Tuesday.

The event will feature Wayne Barford, ITIC senior advisor, former assistant commissioner of the Australian Taxation Office (ATO); Jonathan Pemberton, ITIC senior advisor, former senior official of the Organization for Economic Co-operation and Development (OECD), and His Majesty's Revenue and Customs (HMRC) of the United Kingdom. ITIC is an independent, non-profit research and education organization.

In November 2023, Vietnam's National Assembly, the country's highest legislative body, issued a resolution on “the application of a Top-Up Tax under the Global Anti-Base Erosion Rules.” Currently, the Ministry of Finance is developing a government decree to guide the implementation of the resolution.

The workshop is expected to contribute to the effective implementation of the Global Minimum Tax in Vietnam, which remains a new and complex issue.

The event also has the attendance of top Vietnamese officials, including Prof. Nguyen Mai, chairman of the VAFIE; Phan Duc Hieu, a standing member of the National Assembly's Economic Committee; and Nguyen Thi Yen, vice head of the Finance and Budget Committee at the National Assembly.

It will also feature top officials from the General Department of Taxation under the Vietnamese Ministry of Finance, including Dang Ngoc Minh, deputy general director.

The Investor (www.theinvestor.vn) and its sister Vietnamese-language Nha dau tu (www.nhadautu.vn), which are under the VAFIE, have been directly involved in preparing for the workshop.

The event will take place at 9:15 a.m. Tuesday May 7 at the Ministry of Planning and Investment building, 65 Van Mieu street, Dong Da district, Hanoi.

In November 2023, Vietnam decided to join an OCED-led incentive to levy a minimum 15% tax rate on multinational companies with revenues of EUR750 million ($800 million) or more. The resolution became effective on January 1, 2024, however, tax payments under the scheme will be applied from fiscal year 2025.

The government has been tasked with drafting amendments to the Law on Corporate Income Tax (CIT) to add to the National Assembly’s legislative plans for 2024 to prepare for the move.

Vietnam’s current general CIT is 20%, basically higher than the GMT and fulfilling the initiative, said Luu Duc Huy, head of the General Department of Taxation’s policy department. However, some foreign-invested enterprises enjoy tax exemptions and low tax rate policies, hence their effective rates are lower than 15%.

In January 2024, the Ministry of Planning and Investment said Vietnam considered cost-based incentives as it renews policies to attract FDI because those currently in vogue are becoming outdated. In a draft report on FDI attraction, the ministry notes that Vietnam currently provides incentives related to corporate income tax, import-export tax, and land lease fees. Other factors include destinations, sectors and project scale, like remote areas and priority industries.