Post-tax profits of FDI firms in Vietnam fall 2% to $15.8 bln in 2022

Post-tax profits of foreign direct investment (FDI) firms in Vietnam fell 2.1% year-on-year to VND386.67 trillion ($15.8 billion) in 2022, said Deputy Minister of Finance Cao Anh Tuan.

The deputy minister made the statement at a conference between Prime Minister Pham Minh Chinh and foreign-invested firms in Hanoi on Monday. Tuan clarified the figures were compiled from financial reports sent by 92% out of 28,963 FDI firms in Vietnam.

Compiled data showed that their revenues increased 4.4% year-on-year to VND9,727 trillion ($397.3 billion), he added.

Such a figure is close to the country's 2022 GDP of $409 billion, according to data of the General Statistics Office (GSO).

The FDI firms’ total assets grew 7.9% year-on-year to VND9,444 trillion ($385.7 billion), he added.

Foreign-invested enterprises in Vietnam paid VND237.78 trillion ($9.7 billion) to the state budget last year, or 33.7% of the total payments made by all businesses in Vietnam, he said. The biggest contributions among FDI firms in Vietnam were made by manufacturing-processing companies with 60%, banking-finance-insurance with 10%, and real estate with 7%.

In 2022, 38.79% of FDI firms reported a profit, higher than the 37% posted in 2021. The ratio of firms reporting losses was 53.83%, higher than that of domestic firms with 50%.

Only 23.78% of FDI firms filed value-added tax (VAT) declarations, Tuan said, clarifying that many firms had suffered losses so did not file for VAT. Besides, many operating in the export sector did not have to file thanks to the country’s zero export tax rate applicable to them.

There are allegations that many FDI companies in Vietnam have avoided paying tax via transfer pricing. Thus, the loss figures might not reflect the true picture, some observers said.