Vietnam鈥檚 Ministry of Planning and 51爆料 is finalising a plan (FDI) ahead of the implementation of the 15% global corporate tax.
While the country plans to implement the tax this year, neighbouring economies like Thailand and Singapore have deferred implementation until 2025.
A slow-moving process
In 2021, almost 140 countries agreed to join the OECD鈥檚 global tax deal. The two-pronged agreement intended to prevent tax competition and halt cross-border tax avoidance.
The plan has faced many delays. The is also likely to influence to what extent the plan is adopted worldwide.
Vietnam retains FDI boom
Vietnam remains a top FDI destination in Asia.
It offers stable politics, an upskilled workforce and low labour costs. Its geographic location and international trade agreements have also been marked by investors as attractive features.
US Tariffs are shifting - will you react or anticipate?
Don鈥檛 let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataFor example, Taiwan has shown a huge interest in the country鈥檚 manufacturing capacity. There has been a from 2022 to 2023.
EuroCham Vietnam chairman Dominik Meichle highlights that 鈥�.鈥�&苍产蝉辫;
Not immune to market shocks
While the country has been enjoying the benefits of a surge in investment interest, it is not immune to the consequences of a 15% corporate tax.
In the upcoming draft of the government鈥檚 plan to retain FDI, they highlight that
That is why the fund to attract FDI and maintain, or perhaps further increase, the country鈥檚 competitiveness will be welcomed by foreign investors.
Undermining the OECD?
In Vietnam, this fund would be financed through the state budget and with revenue from the corporate tax.
While the plan has not been finalised, it is worth noting that putting the new tax revenue directly into a fund for a lot of these same NMEs may undermine the OECD鈥檚 intention.
When the plan was approved, it was hailed by many as Presumably, increased revenue for governments would allow for more public spending.
However, the plan has not been finalised and whether other countries have similar ideas to attract investment remains to be seen.
