Concern over global minimum tax

The global minimum corporate tax policy is poised to take effect early next year, which may adversely affect Vietnam’s attraction of foreign direct investment (FDI) as the country has over the years offered tax incentives to lure investors.

From a global perspective in terms of economic growth, healthy competition, and equitability among countries, the global minimum tax is a desirable tax reform to prevent tax avoidance by MNCs who may seek to shift their profits to tax havens or operate business via cross-border dititalization without physical presence in a certain country. However, once this tax reform is formally introduced, developing countries including Vietnam may find it tough to compete for FDI.

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Quoc Hung