On 29 November 2023, Vietnam’s National Assembly passed a resolution, which specifies that starting from 1 January 2024 a 15% corporate income tax (global minimum tax) will be imposed on multinational corporations with total revenue of EUR750 million or more in 2 years out of the 4 most recent consecutive years.

After the implementation of the global minimum tax, Vietnam's corporate income tax exemption and preferential corporate income tax rate of less than 15% enjoyed by foreign invested enterprises will become invalid. It will inevitably have a significant impact on Vietnam's competitiveness in attracting foreign investment.

The global minimum tax is a worldwide tax policy proposed by the Organisation for Economic Cooperation and Development (OECD) and unanimously agreed by more than 140 countries and regions, aiming to impose a minimum tax rate of at least 15% on multinational corporations operating in countries or regions with a corporate income tax rate lower than 15%, prevent multinational corporations from tax avoidance by transferring profits to low-tax jurisdiction, achieve global tax fairness. If the corporate income tax rate paid by a multinational corporation at the investment destination is less than 15%, it will be required to pay a top-up tax covering the difference to the country where the headquarter is located.

Up till now, most EU countries, Switzerland, the United Kingdom, South Korea, Japan, Singapore, Indonesia, Australia, Vietnam, Hong Kong etc. have confirmed that they will implement the global minimum tax starting from 1 January 2024.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.