There have been various economic ups and downs in the post-pandemic era that have necessitated decisive measures to sustain growth. Despite an improvement in the third quarter of the year, Vietnam's economy still faces a number of obstacles to achieve its targets.
PwC Vietnam has witnessed some major tax changes locally and globally, which may permanently alter how business works. Within this single year, a number of new regulations and drafts resolutions have been proposed or passed.
The 2023 tax and legal year-end conferences in Hanoi and Ho Chi Minh City were held in November – an annual event by PwC to help businesses keep up with the latest legal and tax developments in Vietnam, as well with as any relevant international practices.
|Nguyen Thanh Trung, tax leader, PwC Vietnam
The most important tax development this year is the introduction of 'Pillar 2', which establishes a minimum effective tax rate to be applied to profits of large multinational corporations worldwide. Emerging economies like Vietnam will face a difficult challenge in meeting this demand while at the same time maintaining its attractiveness to foreign investors, as tax incentives may no longer be the advantage they once were. This issue, and other difficulties and possible solutions, were also discussed during the conferences.
Shortly after, the National Assembly approved a resolution on November 29 related to corporate income taxes under Pillar 2. Under the resolution, the global minimum tax will be applied in Vietnam from January 1 next year.
This year also saw many important customs, legal, and corporate tax updates. Notably, the in-country export and import model in Vietnam is propose to be abolished. The introduction of personal data protection, alongside the update on foreign loans and environmental policy applied to manufacturers, are among the critical developments of 2023. Additionally, the proposed amendments to several tax laws including corporate income tax, VAT and SST, together with the draft regulations on invoicing, attracted a lot of attention from the business world.
“These updates demonstrate policies that promote transparency and broaden the tax bases, especially from new sources of revenue, which are in accordance with international practices,” said Nguyen Thanh Trung, tax leader of PwC Vietnam.
“These are also in accordance with current global tax trends, which ensure a fairer distribution of profits and taxing rights among countries, re-allocating tax rights to the markets," Trung added.
Vietnam is an ever-changing compliance and regulatory environment. PwC Vietnam aims to ensure that businesses are well-informed of the latest tax and legal developments, which is vital for their management and daily operations.
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