Vietnam finance ministry mulls incentives to offset global minimum tax

By Anh Minh
Fri, March 8, 2024 | 11:40 am GMT+7

Vietnam’s Ministry of Finance is studying incentives to ensure the country remains attractive to foreign-invested enterprises (FIEs) as it prepares to implement the global minimum tax (GMT), said a senior ministry official.

The ministry’s General Department of Taxation (GDT) had worked with other ministries and foreign business communities to draft a resolution on enacting the GMT that was approved by the parliament last November, Mai Xuan Thanh, head of the GDT, told an investment promotion conference in Seoul, South Korea, on Thursday.

Mai Xuan Thanh (second, left), head of the General Department of Taxation (GDT), speaks at an investment promotion conference in Seoul, South Korea, March 7, 2024. Photo courtesy of GDT.

Mai Xuan Thanh (second, left), head of the General Department of Taxation (GDT), speaks at an investment promotion conference in Seoul, South Korea, March 7, 2024. Photo courtesy of GDT.

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%.

Vietnam’s Ministry of Finance has estimated additional annual tax revenue of nearly $600 million from 122 foreign companies in the first year of enforcement.

To offset the GMT, the government has assigned agencies to amend existing policies to make Vietnam more appealing to new FIEs and better protect current ones, Thanh added.

The finance ministry is studying incentives adopted by other countries to mitigate negative effects of the GMT and make Vietnam’s related policies as attractive as theirs at least, he added.

“We hope that with the long-standing investment cooperation between South Korea and Vietnam and our efforts to continue improving policies, promote administrative reform and accelerate comprehensive digitalization in the taxation field, Korean businesses will continue to invest for the benefit of both countries,” he noted.

Speaking at the event, Minister of Finance Ho Duc Phoc stressed that Vietnam’s tax policies will be focused on maximizing favorable conditions for FIEs. The government will take measures to support taxes, fees, and land rental for FIEs, including Korean firms.

The Ministry of Planning and Investment last December started to gather comments on a draft decree to establish a fund that will use part of GMT revenues to offset the top-up tax and attract foreign investment in priority sectors, particularly high-tech.

Michael Kokalari, chief economist at leading fund management firm VinaCapital, said in January that the implementation of the GMT is unlikely to impede FDI inflows into Vietnam.

The government will almost certainly find “workarounds” to essentially rebate some or all of the higher taxes many multinationals will be required to pay. Tax incentives are not the main motivation for multinational companies to invest in one developing country versus another, the economist explained.

Comments (0)
  • Read More
Techcombank eyes market cap of $20 bln by end-2025: chairman

Techcombank eyes market cap of $20 bln by end-2025: chairman

Techcombank, one of Vietnam’s major private lenders, aims to expand its market capitalization to $20 billion by the end of 2025, said chairman Ho Hung Anh.

Banking - Sun, April 27, 2025 | 10:40 am GMT+7

Vietnam’s private lender Sacombank to trim payroll, acquire securities broker

Vietnam’s private lender Sacombank to trim payroll, acquire securities broker

Sacombank, a mid-sized private lender in Vietnam, plans to downsize its headcount in 2025-2026 as part of its push toward digital transactions.

Banking - Sun, April 27, 2025 | 10:18 am GMT+7

Vietnam property giant Nam Long eyes 35% profit hike for 2025 on strong housing demand

Vietnam property giant Nam Long eyes 35% profit hike for 2025 on strong housing demand

Nam Long Investment Corporation, a major real estate developer in southern Vietnam, aims to achieve a net profit of VND701 billion ($27 million) in 2025, up 35% year-on-year, driven by strong local housing demand.

Companies - Sun, April 27, 2025 | 8:17 am GMT+7

SK may adjust ownership at Vietnam-based pharmacy major Imexpharm

SK may adjust ownership at Vietnam-based pharmacy major Imexpharm

South Korean chaebol SK Group may adjust its stake at Vietnam-based pharmaceutical company Imexpharm as part of a comprehensive portfolio review across the group, including all of SK’s global assets.

Companies - Sat, April 26, 2025 | 7:00 pm GMT+7

Vietnam's PVOIL owns 423 petrol stations with EV chargers following partnership with VinFast

Vietnam's PVOIL owns 423 petrol stations with EV chargers following partnership with VinFast

PVOIL, a subsidiary of state-owned giant Petrovietnam, had 423 petrol stations with electric vehicle (EV) chargers nationwide as of March 2025, through its partnership with EV maker VinFast.

Companies - Sat, April 26, 2025 | 2:53 pm GMT+7

Indonesia expects 5% economic growth despite IMF forecast revision

Indonesia expects 5% economic growth despite IMF forecast revision

Indonesian Finance Minister Sri Mulyani Indrawati has expressed confidence that the country’s economy will grow by up to 5% in 2025, despite the International Monetary Fund (IMF) having revised down the national growth forecast to 4.7%.

Southeast Asia - Sat, April 26, 2025 | 10:58 am GMT+7

Vietnam's dairy giant Vinamilk to be safe and sound amid US tariff storm: CEO

Vietnam's dairy giant Vinamilk to be safe and sound amid US tariff storm: CEO

Vietnam’s largest dairy maker Vinamilk will not be significantly affected by U.S. reciprocal tariffs and global trade competition as its largest share lies in the domestic market, said CEO Mai Kieu Lien.

Companies - Sat, April 26, 2025 | 10:51 am GMT+7

Vietnam's EV startup VinFast posts 192% surge in 2024 deliveries, eyes double figure in 2025

Vietnam's EV startup VinFast posts 192% surge in 2024 deliveries, eyes double figure in 2025

Vietnamese electric vehicle (EV) manufacturer VinFast recorded robust revenue growth in its unaudited Q4 and 2024 financial statements, driven by strong vehicle deliveries despite global market uncertainties.

Companies - Sat, April 26, 2025 | 8:28 am GMT+7

Vietnam’s first rice husk-fueled biomass power plant inaugurated

Vietnam’s first rice husk-fueled biomass power plant inaugurated

A biomass power plant using rice husk and woodchips as fuel was inaugurated on Friday in Vietnam's Mekong Delta province of Hau Giang.

Southeast Asia - Fri, April 25, 2025 | 11:13 pm GMT+7

Bestway International launches $300 mln plant in southern Vietnam

Bestway International launches $300 mln plant in southern Vietnam

Chinese group Bestway International has launched a $300 million investment project in Vietnam's southern city of Can Tho, signaling a significant boost in large-scale foreign investment for the Mekong Delta region.

Southeast Asia - Fri, April 25, 2025 | 11:10 pm GMT+7

Indonesia accelerates tariff talks with US

Indonesia accelerates tariff talks with US

Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto has met with U.S. Secretary of the Treasury Scott Bessent to promote tariff talks with the U.S.

Southeast Asia - Fri, April 25, 2025 | 11:06 pm GMT+7

Swedish giant Syre strikes deal for $1 bln circular textile project in central Vietnam

Swedish giant Syre strikes deal for $1 bln circular textile project in central Vietnam

Binh Dinh province and Sweden’s leading textile manufacturer Syre on Friday signed an MoU for a $1 billion polyester fabric recycling complex which aims to position Vietnam as the world’s first high-tech, circular textile hub.

Industries - Fri, April 25, 2025 | 10:53 pm GMT+7

Vietnam's major insurer PVI aims for billion-dollar revenue in 2025

Vietnam's major insurer PVI aims for billion-dollar revenue in 2025

PVI Insurance Corporation is endeavoring to achieve a billion-dollar revenue by end-2025, a significant milestone in its 30th anniversary year which will reaffirm its leading position in Vietnam’s non-life insurance market.

Companies - Fri, April 25, 2025 | 8:15 pm GMT+7

'Pangasius queen' Vinh Hoan optimistic about US market despite cautious business outlook

'Pangasius queen' Vinh Hoan optimistic about US market despite cautious business outlook

Leaders of Vinh Hoan Corporation, one of Vietnam’s top pangasius exporters, said they remain optimistic about the U.S. market despite cautious business scenarios.

Companies - Fri, April 25, 2025 | 4:40 pm GMT+7

Vietnam the market to focus on, instead of boosting export: Sabeco CEO

Vietnam the market to focus on, instead of boosting export: Sabeco CEO

Vietnam, among the countries with largest beer consumption, is the market that Sabeco focuses on, instead of boosting exports, said its CEO Lester Tan Teck Chuan.

Companies - Fri, April 25, 2025 | 4:00 pm GMT+7

Thailand's data center services market to expand 8% in 2025

Thailand's data center services market to expand 8% in 2025

Thailand's data center services market is projected to grow by 8% this year to THB12.7 billion ($379.16 million), driven by rising demand for greater processing power to support companies' adoption of AI and enlarged data storage.

Southeast Asia - Fri, April 25, 2025 | 12:07 pm GMT+7