Vietnam to impose global minimum tax on foreign companies from 2024

29 Nov '23

1 min read

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Vietnam's National Assembly recently voted in favour of imposing a global minimum tax of 15 per cent on foreign companies from January 1 next year.
The tax will apply to firms with revenues of at least $800 million in at least two of the four most recent years.
The tax was agreed upon by the G7 nations in 2021 to prevent multinationals from evading tax.

Vietnam’s National Assembly recently voted in favour of imposing a global minimum tax of 15 per cent on foreign companies from January 1 next year.

The tax will apply to firms with revenues of at least €750 million ($800 million) in at least two of the four most recent years.

The tax on corporate income was agreed upon by the G7 nations in June 2021 to reduce tax competition between countries and prevent multinationals from evading tax.

A hundred and twenty two foreign businesses in Vietnam will have to pay the tax, worth an estimated VND14.6 trillion ($603.31 million) next year, the government has estimated.

As the tax will offset the incentives Vietnam offers foreign investors, lawmakers have urged the government to announce new ones, a news agency reported.

The government should also prepare for lawsuits in case foreign companies sue for the right to pay the tax in their home country, the lawmakers feel.

The European Union, Japan, South Korea and the United Kingdom also plan to impose the tax next year.

ALCHEMPro News Desk (DS)

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