Since the beginning of this year, Vietnam has imposed the Global Minimum Tax (GMT). The applicable tax rate is 15%, for multinational enterprises with a total consolidated revenue of 750 million euros (about 800 million USD). ) or more in two of the four most consecutive years. Taxable investors will be forced to pay the global minimum tax in Vietnam.

Some investors have been concerned that the application of this tax regime could affect FDI inflows, because this limits Vietnam’s ability to offer tax incentives to attract investors.

“However, we are not concerned about this issue,” said Mr. Michael Kokalari, Director of Macroeconomic Analysis and Market Research Department at VinaCapital.

According to this expert, tax incentives are not the main motivation for multinational companies to decide to invest in a developing country. Research by the World Bank and other units shows that multinational companies consider many factors such as cost, labor quality, infrastructure quality, and openness of the business environment when deciding to invest. private. In developed countries, the above factors are almost the same, so taxes become a more important factor, unlike when they consider investing in developing countries.

In addition, Vietnam can offer other solutions to support part or all of the tax that multinational companies must pay when the global minimum tax is applied.

The Ministry of Planning and Investment is researching and proposing the “Investment Support Fund” (ISF) to refund taxes for some companies, through supporting employee training costs and research costs. and development (R&D), or interest expenses.

According to VinaCapital’s estimates, the global minimum tax will impact more than 100 multinational companies operating in Vietnam and could bring in an additional 600 million USD in taxes, equivalent to 4% of FDI company profits. in Viet Nam. Some units, like Samsung, pay about 5% tax on revenue in Vietnam before the mandatory 15% minimum tax rate.

Information about ISF has just been announced in recent days. “We look forward to more details being shared. Countries competing to attract FDI in the region will certainly have similar measures, making the tax level the same as before the global minimum tax was applied,” said VinaCapital’s Chief Economist.

Samsung’s R&D center in Hanoi has just been inaugurated at the end of 2022. Photo: Luu Quy

Mr. Hoang Thuy Duong, Deputy General Director of KPMG Vietnam, added that many business groups, especially in the fields of high technology or electric vehicles and green energy, are very interested in other support from the Government to encourage encourage investment. Even businesses that are planning to expand investment are also looking forward to new preferential policies.

“When the application of income-based tax incentives may no longer be valid, Vietnam should turn to support with costs, such as investment costs, labor hire, land or research and development costs. development”, Deputy General Director of KPMG Vietnam commented. With new projects, Vietnam can support costs related to fixed asset investment. As for businesses operating in Vietnam, support for labor costs and research and development costs will be more useful.

The development of policies, according to KPMG Vietnam leaders, must also consider encouraging both new and existing investors. At the same time, according to him, it is also necessary to select objects in the long-term development strategy such as high technology, electric vehicles… “This policy is an ‘important vote’ for the FDI eagle group to evaluate the investment environment.” in Vietnam,” Mr. Duong said.

Mr. Luu Duc Huy, Director of Tax Policy Department (General Department of Taxation) in a conference last year cited a business survey showing that only 28% of businesses were interested in tax incentives.

“Tax incentives in many developed countries are considered outdated. The current trend is to shift incentives from income to expenses,” Mr. Huy said.

The global minimum tax is not an international treaty that countries must apply. However, according to the Director of the Tax Policy Department, if Vietnam does not apply, it must still accept the tax collection rights of the parent country of the company investing in Vietnam. Therefore, Vietnam cannot stand outside this trend. Collecting global minimum taxes helps Vietnam increase budget revenue, avoid profit transfer pricing, and avoid losing tax collection rights to other countries.

According to statistics from the General Department of Taxation, about 120 businesses with revenue of over 750 million USD operating in Vietnam are expected to be affected if the global minimum tax is applied.

Source: Vietnam.vn
11/1/2024