MPI builds new investment incentives to match global minimum tax rule

Production at Jasan Textile & Dyeing Vietnam (Photo: VNA)

Hanoi – The Ministry of Planning and Investment (MPI) is working on the design of incentives and measures to support new investment activities amid the upcoming application of the global minimum tax.

Vietnam has been one of the countries to join the OECD global minimum tax rule, a minimum rate of tax on corporate income internationally agreed upon and accepted by inpidual jurisdictions which was introduced in 2021. Each country would be eligible to a share of revenue generated by the tax. On August 4, 2022, the Prime Minister formed a special taskforce led by Deputy Prime Minister Le Minh Khai for the studying and proposal of measures related to the OECD’s deal.

MPI Deputy Minister Nguyen Thi Bich Ngoc said that the PM has directed the taskforce to focus on reviewing, completing the related institution and regulations and building a roadmap for the application of the rule on the basis of learning international experience and ensuring suitable application of the rule in Vietnam.

Vietnam has opened its door for foreign investment for 35 years and provided many incentives for investors, she said, adding her ministry is working to adjust its investment incentive policy to ensure compatibility with the global minimum tax but with the least impact on businesses investing in Vietnam.

The official said that the foreign investment attraction strategy for the 2021-2030 period aims to draw suitable markets and partners for cooperation to suit the world regional situation, repositioning investment flows and reducing dependence on risky and potentially disputed markets.

At the same time, the strategy prioritises the connection of global production and supply chains, attracting green investment, high technology, supporting technology, and advanced governance methods, ensuring the balance between the interests of the investors and the interests of the State and the people during foreign investment cooperation activities in the spirit of harmonising benefits and sharing risks, she said.

Experts scrutinise global minimum tax implementation in Vietnam Vietnam needs to fully and comprehensively assess the impacts of the global minimum tax on the country, said Minister of Finance Ho Duc Phoc on April 18.

Businesses should proactively respond to GMT The global minimum tax (GMT) rate will enable Vietnam to switch businesses to preferential investment status proactively to retain large overseas investors, while also supporting the development of small- and medium-sized enterprises in the domestic market.

FIA: Global minimum tax and currency devaluation affecting FDI Speaking at the VIR-hostedconference on May 15, Do Van Su, deputy director general of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI) said that the decrease in foreign capital coming into Vietnam has been caused by recent shifts in global tax policy and currency devaluation in certain countries, while investment relocation from China has not brought much benefit.

Industrial developers eye the effects of upcoming tax regime Industrial real estate developers must be more proactive in responding to the upcoming global minimum tax policy by improving the quality of industrial zone infrastructure and providing more utilities for their tenants.