Approves new minimum corporate income tax (CIT) for multinational enterprises

On 29 November 2023, the National Assembly of Viet Nam approved a Resolution No. 39/2023/UBTVQH15 on applying additional corporate income tax in line with the Global Anti-Base Erosion Rules (global minimum tax). Under this resolution that takes effect on 1 January 2024, a global minimum tax rate of 15 per cent will apply to multinational enterprises (MNEs) with revenue exceeding about $800 million or more in two of the four consecutive years. According to the General Department of Taxation, while Vietnam’s standard corporate income tax is higher at 20 per cent, the country gives an average rate of 12.3 per cent to foreign-invested firms during the incentive period. Some larger players have even enjoyed an effective tax rate of as low as 2.75 per cent due to lengthy tax exemption and tax reduction periods. It is estimated that about 113 MNEs in Viet Nam will be affected by the global minimum tax. The legislature asked the Government to comprehensively evaluate current tax incentive policies and soon amend the Corporate Income Tax Law along with a plan to adjust the tax rate and tax incentive system.

• Type:

  • Promotion and facilitation (Investment incentives)

• Industry:

  • Not industry specific

• Sources:

  • Ministry of Finance, Issuing resolution on global minimum tax to proactive international integration, https://www.mof.gov.vn/webcenter/portal/vclvcstcen/pages_r/l/detailnews?dDocName=MOFUCM296473, 04 Dec 2023
  • reuters, Vietnam parliament approves global minimum corporate tax, delays offsets, https://www.reuters.com/world/asia-pacific/vietnam-parliament-approves-global-minimum-corporate-tax-2023-11-29/, 29 Nov 2023
  • businesstimes, Vietnam parliament approves new minimum tax for multinationals, https://www.businesstimes.com.sg/international/asean/vietnam-parliament-approves-new-minimum-tax-multinationals, 29 Nov 2023