Vietnam should proactively implement Global Minimum Tax: official

By Tri Duc
Tue, May 7, 2024 | 3:15 pm GMT+7

Although the Global Minimum Tax is not mandatory, Vietnam should implement it proactively because it can increase tax revenues, further international integration and create new opportunities, a senior tax official says.

Dang Ngoc Minh, deputy general Director of the country's General Department of Taxation, affirmed this Tuesday at an international workshop on "Pillar 2 Global Minimum Tax Implementation in Vietnam," joinly hosted by the Vietnam's Association of Foreign Invested Enterprises (VAFIE) and the Washington D.C.-based International Tax and Investment Center (ITIC).

Dang Ngoc Minh, deputy general director of the General Department of Taxation. Photo by The Investor.

Dang Ngoc Minh, deputy general director of the General Department of Taxation. Photo by The Investor.

The GMT can also help Vietnam prevent transfer pricing and tax evasion/avoidance, he said. If Vietnam does not implement it, other countries can gain additional tax revenue that Vietnam can levy, especially on foreign businesses, Minh said.

Based on 2022 data, GMT application would fetch Vietnam additional tax revenues of VND14.6 trillion ($574.4 million) from 122 foreign multinational enterprises with investments in the country.

From Vietnamese enterprises with outbound investments, the additional tax revenues could reach VND73 billion ($2.9 million), Minh said.

Critical mass

Jonathan Pemberton, senior advisor with the International Tax and Investment Center, said 35 economies were implementing the GMT in 2024.

Jonathan Pemberton (center), ITIC senior advisor. Photo by The Investor.

Jonathan Pemberton (center), ITIC senior advisor. Photo by The Investor.

Although different jurisdictions can have differences in GMT implementation, the common goal is to ensure fair tax collection, he added.

“Once we reach a critical mass of number of countries implementing the GMT," other nations will end up following the initiatives and "we're probably there already," said Pemberton, 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.

He said the ratio of global profits subject to low taxes can fall soon from 36% to 7% and nations can gain additional taxes of $155-192 billion.

Given current economic growth and inflation trends, the ratio of “in-scope” multinational enterprises paying more taxes in line with the GMT can go up from 60% in 2024 to 90% in 2025 and beyond, he added.

On November 29, 2023, Vietnam's National Assembly, the country's highest legislative body, passed a resolution on levying additional corporate income tax as per Global Anti-base Erosion (GloBE) Rules; applying a tax rate of 15% to taxpayers who are constituent entities of multinational enterprises with turnover in the Consolidated Financial Statements of the Ultimate Parent Entity (UPE) for at least two of the four years immediately preceding the fiscal year reaching €750 million or more.

The exceptions are government organizations, international organizations, non-profit organizations, pension funds, investment funds that are UPEs, real estate investment entities that are UPEs, entities with at least 85% of the asset value owned directly or indirectly through organizations specified in points ‘a’ to ‘e’ of this clause.

The resolution takes effect on January 1, 2024, applicable from fiscal year 2024. To make regulations on corporate income tax consistent, the parliament requested the Government to urgently complete the dossier of the (amended) Law on Corporate Income Tax project and submit it to the Standing Committee of the National Assembly. The National Assembly will consider adding it to the 2024 lawmaking agenda.

The international workshop on "Pillar 2 Global Minimum Tax Implementation in Vietnam" is the third workshop on GMT that the VAFIE and the association's publications The Investor (www.theinvestor.vn) and Nha dau tu (www.nhadautu.vn) have organized.

Comments (0)
  • Read More
VAFIE, Nghe An province tax authority help businesses update new tax policies

VAFIE, Nghe An province tax authority help businesses update new tax policies

The Vietnam's Association of Foreign Invested Enterprises (VAFIE) and the Nghe An province Tax Department on Friday co-hosted a tax policy workshop titled “New tax policies impacting business operations and accounting standards under IFRS.”

Companies - Sat, October 25, 2025 | 7:28 pm GMT+7

Vietnam parliament okays appointing 2 new Deputy Prime Ministers

Vietnam parliament okays appointing 2 new Deputy Prime Ministers

Vietnam's legislature has approved Prime Minister Pham Minh Chinh's proposal to appoint Ho Quoc Dung, former Party chief of Gia Lai province, as Deputy Prime Minister, while Pham Thi Thanh Tra, a Party Central Committee member, became the country's first female Deputy Prime Minister.

Politics - Sat, October 25, 2025 | 6:32 pm GMT+7

Foxconn unit ShunYun injects extra $15 mln into northern Vietnam subsidiary

Foxconn unit ShunYun injects extra $15 mln into northern Vietnam subsidiary

ShunYun Technology Co., a subsidiary of Taiwanese electronics giant Foxconn, has announced an additional $15 million investment into its Vietnamese arm in the northern province of Bac Ninh, according to a filing with the Taiwan Stock Exchange.

Industries - Sat, October 25, 2025 | 4:57 pm GMT+7

DNP Water, Samsung E&A launch $69 mln inter-regional water project in Vietnam’s Mekong Delta

DNP Water, Samsung E&A launch $69 mln inter-regional water project in Vietnam’s Mekong Delta

A subsidiary of Vietnam’s water supplier DNP Water and South Korea’s Samsung E&A have broken ground on a VND1.82 trillion ($69.2 million) inter-regional raw water infrastructure project in the Mekong Delta, marking a major step toward improving the region’s water security.

Infrastructure - Sat, October 25, 2025 | 4:50 pm GMT+7

Vietnam’s bond market heats up as major corporates return

Vietnam’s bond market heats up as major corporates return

Vietnam’s corporate bond market is regaining momentum as large conglomerates join banks and brokerages in successful issuances.

Finance - Sat, October 25, 2025 | 9:33 am GMT+7

Decentralization and the potential for multi-center urban development in HCMC’s satellite areas

Decentralization and the potential for multi-center urban development in HCMC’s satellite areas

If managed well, urban decentralization and multi-center development can ease housing pressures in central HCMC and usher in a more balanced growth phase for the southern region's residential market, write Avison Young Vietnam analysts.

Real Estate - Sat, October 25, 2025 | 8:00 am GMT+7

Chinese firm proposes its 3rd waste-to-power plant in Vietnam

Chinese firm proposes its 3rd waste-to-power plant in Vietnam

China’s EverBright Environment has proposed investing about VND1.6 trillion ($60.82 million) in a waste-to-energy plant in the central province of Quang Tri.

Energy - Fri, October 24, 2025 | 8:45 pm GMT+7

Mega golf-commercial-urban complex proposed for southern Vietnam city Can Tho

Mega golf-commercial-urban complex proposed for southern Vietnam city Can Tho

Vietnam Royal Investment Group JSC has proposed developing a 766-hectare golf-service-commercial-urban complex in the Mekong Delta city of Can Tho.

Real Estate - Fri, October 24, 2025 | 4:31 pm GMT+7

Sumitomo makes first hydropower investment in Vietnam

Sumitomo makes first hydropower investment in Vietnam

Sumitomo Corporation has made its first hydropower investment in Vietnam by acquiring a 49% stake in Mekong Electric Power Engineering and Development JSC which owns the 48 MW Dak Di 1 & 2 run-of-river hydropower project in Danang city.

Energy - Fri, October 24, 2025 | 3:42 pm GMT+7

Investors urge Vietnam to fix legal hurdles to LNG power projects

Investors urge Vietnam to fix legal hurdles to LNG power projects

A group of investors in Vietnam’s gas-fired power sector has urged the country's parliament to address regulatory gaps that have stalled multi-billion-dollar LNG and domestic gas-fueled power projects, warning that delays could derail the country’s energy transition targets.

Energy - Fri, October 24, 2025 | 2:12 pm GMT+7

Central Vietnam province Gia Lai okays 3 large-scale wind power projects

Central Vietnam province Gia Lai okays 3 large-scale wind power projects

Gia Lai province has granted in-principle approvals to three large-scale wind power projects with total registered capital mounting to VND19.35 trillion ($734.9 million).

Energy - Fri, October 24, 2025 | 12:01 pm GMT+7

HCMC pushes for early investment in Thu Thiem-Long Thanh railway project

HCMC pushes for early investment in Thu Thiem-Long Thanh railway project

The Ho Chi Minh City People’s Committee has emphasized the need for early investment and operation of a railway connecting Thu Thiem in the metropolis with Long Thanh International Airport in neighboring Dong Nai province.

Infrastructure - Fri, October 24, 2025 | 10:49 am GMT+7

Vietnam to let foreign investors place orders directly via global brokers

Vietnam to let foreign investors place orders directly via global brokers

Vietnam plans to allow foreign investors to place orders directly through global brokerage firms, a move aimed at easing access to its stock market after a long-awaited upgrade to "secondary emerging" market status, a top regulator said.

Finance - Fri, October 24, 2025 | 8:28 am GMT+7

Vietnam business lobby urges easing of football betting limits

Vietnam business lobby urges easing of football betting limits

Vietnam’s leading business lobby VCCI has called on the government to sharply ease limits on international football betting and relax foreign ownership rules to make the industry more appealing to investors.

Finance - Thu, October 23, 2025 | 9:30 pm GMT+7

Powering growth from within

Powering growth from within

The development of a strong domestic private sector is essential for building a resilient, independent, and self-reliant economy that is less dependent on state-owned enterprises or foreign investment, writes Tim Evans, CEO of HSBC Vietnam.

Economy - Thu, October 23, 2025 | 9:09 pm GMT+7

Vietnam's stock market regulator appoints 2 new vice chairpersons

Vietnam's stock market regulator appoints 2 new vice chairpersons

The State Securities Commission of Vietnam (SSC) has appointed Nguyen Hoang Duong and Le Thi Viet Nga as its new vice chairpersons.

Finance - Thu, October 23, 2025 | 4:14 pm GMT+7