No global minimum tax payment for firms in Vietnam until 2025

By Tri Duc
Fri, October 20, 2023 | 4:14 pm GMT+7

Businesses in Vietnam will not have to pay the new global minimum tax (GMT) until 2025, says Vu Tuan Anh, a member of the National Assembly’s Finance and Budget Committee.

The lawmaker was speaking at a Thursday press conference of the National Assembly Office held to provide a preview the parliament’s next (sixth) meeting.

Addressing the issue of the parliament not having GMT on the agenda for the coming session, Anh explained that as per the GMT scheme, firms have 12 months to declare any extra corporate income tax (CIT) payments and 18 months after the end of the fiscal year to file returns for taxable incomes.

As a result, firms will not have to pay additional tax per the GMT scheme in their home nations from 2024. The earliest date for firms in Vietnam to pay GMT would be 2025.

With such a timeline, the National Assembly will not discuss GMT content at its next meeting so that it has more time to learn the scheme in detail. The government has been asked to complete draft documents related to GMT, Anh said.

Vu Tuan Anh, a member of the National Assembly’s Finance and Budget Committee, speaks at a press conference in Hanoi,  October 19, 2023. Photo courtesy of the parliament.

Vu Tuan Anh, a member of the National Assembly’s Finance and Budget Committee, speaks at a press conference in Hanoi, October 19, 2023. Photo courtesy of the parliament.

As the GMT is an important and unprecedented scheme, the National Assembly will check it carefully to ensure the country’s tax benefits, attractiveness to foreign investors, competitiveness and compliance with international law and practice, he added.

The GMT, agreed to by G7 countries in June 2021 as a measure to prevent tax avoidance by multinational corporations, will become effective January 1, 2024 in many OECD countries. The GMT under OECD Pillar Two is a once-in-a-lifetime global tax reform that will apply to multinational companies with revenues of EUR750 million ($800 million) or more. Such companies will be subject to a minimum global tax rate of 15%.

In April, Prime Minister Pham Minh Chinh had said that the Vietnamese government will provide non-tax incentives to foreign-invested enterprises to offset any GMT disadvantage.

The PM also said in July that the government would submit GMT resolutions to the National Assembly for approval in October. Minister of Justice Le Thanh Long was tasked with drafting a resolution to add the GMT to the National Assembly’s legislative agenda this year. The Ministry of Finance was asked to draft a report on the GMT implementation and the Ministry of Planning and Investment to draft non-tax support policies for investors to offset losses deriving from the new tax rule.

In order to offset disadvantages arising from deploying the GMT, the government submitted a draft resolution to National Assembly approval, aiming to incentivize high-tech investments.

The draft resolution says that tax breaks or direct subsidy payments from the state budget may be offered for workforce training, investments in fixed assets and public service infrastructure, production of high-tech goods, and research & development (R&D).

On October 17, the National Assembly, Vietnam’s highest legislative body, said it would not discuss approval of GMT at the upcoming session that begins October 23.

Bui Van Cuong, general secretary of the National Assembly, explained that the GMT bill had to be looked at in tandem with another bill that supported high-tech investments, but a draft for the latter was not yet ready for the parliament to discuss and approve.

The upcoming parliament session would have two phases: October 23-November 10; and November 20-November 29. Key topics on the agenda will include a resolution on a pilot scheme to resolve bottlenecks in construction of road traffic projects; the government’s report on the progress made in approving the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); site clearance and resettlement related to the construction of the Long Thanh International Airport in the southern province of Dong Nai.

The mid-year session will also question top government officials directly; conduct a mid-term review of the nation’s 2021-2025 socioeconomic performance; and carry out a vote of confidence for top officials selected by the National Assembly.

Comments (0)
  • Read More
Former Government Office chairman receives $7,900 bribe from property project

Former Government Office chairman receives $7,900 bribe from property project

Mai Tien Dung, former Minister-Government Office Chairman, received a bribe worth VND200 million ($7,900) from Nguyen Cao Tri, owner of the Dai Ninh eco-resort and urban area project in Lam Dong province.

Society - Sat, November 2, 2024 | 9:13 pm GMT+7

Thai food giant CP enters public-private partnership to promote food system transformation

Thai food giant CP enters public-private partnership to promote food system transformation

Thai-invested C.P. Vietnam Livestock JSC and the Partnership for Sustainable Agriculture Vietnam (PSAV) signed a memorandum of understanding Friday on working together to advance sustainable agriculture in the country.

Companies - Sat, November 2, 2024 | 7:16 pm GMT+7

Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year

Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year

Vietnam’s central province of Quang Ngai will work with the investor to have construction of VSIP II Quang Ngai, a facility based on the Vietnam-Singapore Industrial Park (VSIP) model, begin in August 2025.

Industrial real estate - Sat, November 2, 2024 | 3:47 pm GMT+7

Vietnam likely to grow 6.5% in 2024-2025: VinaCapital

Vietnam likely to grow 6.5% in 2024-2025: VinaCapital

VinaCapital, among the biggest foreign-run asset managers in Vietnam, has forecast the country’s economy to achieve 6.5% growth in both 2024 and 2025, with the composition of the expansion to change to more domestically driven factors next year.

Economy - Sat, November 2, 2024 | 2:00 pm GMT+7

Major Vietnamese developer Novaland appoints new CEO

Major Vietnamese developer Novaland appoints new CEO

Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.

Companies - Sat, November 2, 2024 | 10:24 am GMT+7

Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3

Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.

Southeast Asia - Sat, November 2, 2024 | 9:41 am GMT+7

ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout

ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout

Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.

Companies - Sat, November 2, 2024 | 9:13 am GMT+7

Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex

Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex

Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.

Industries - Sat, November 2, 2024 | 8:00 am GMT+7

Vietnam becomes Australia’s fastest-growing inbound market

Vietnam becomes Australia’s fastest-growing inbound market

The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.

Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7

Study finds shift in Thai consumers’ spending patterns

Study finds shift in Thai consumers’ spending patterns

Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).

Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7

Energy security, digitalization key to Indonesia's economic growth

Energy security, digitalization key to Indonesia's economic growth

The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.

Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7

Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM

Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM

Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.

Politics - Fri, November 1, 2024 | 9:25 pm GMT+7

Vietnam, Qatar look to tap potential for energy, oil & gas collaboration

Vietnam, Qatar look to tap potential for energy, oil & gas collaboration

Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.

Politics - Fri, November 1, 2024 | 9:02 pm GMT+7

Thailand bans export of raw palm oil until December

Thailand bans export of raw palm oil until December

Thailand's Department of Internal Trade has temporarily banned the export of raw palm oil due to reduced production caused by drought and plant diseases.

Southeast Asia - Fri, November 1, 2024 | 8:31 pm GMT+7

Envision Energy to build $420 mln wind power plant in Vietnam from June 2025

Envision Energy to build $420 mln wind power plant in Vietnam from June 2025

Envision Energy Singapore Pte Ltd, under China-based Envision Energy, aims to kick off construction of the 300-MW Envision Nam Po wind power plant in Vietnam’s northern mountainous province of Dien Bien in June 2025.

Energy - Fri, November 1, 2024 | 8:30 pm GMT+7

Indonesia to ban plastic waste imports from 2025

Indonesia to ban plastic waste imports from 2025

The Indonesian government will start imposing a ban on the import of plastic waste from the beginning of next year, according to Minister of Environment Hanif Faisol Nurrofiq.

Southeast Asia - Fri, November 1, 2024 | 8:29 pm GMT+7