No global minimum tax will result in revenue loss: finance minister

Speaking at a meeting of the National Assembly Standing Committee in Hanoi Thursday, he said if the global minimum tax is not imposed on businesses with a turnover of €750 million (US$800 million)or more from the beginning of 2024, Vietnam has to give up the right to tax at all and businesses would pay additional taxes to the country where they are headquartered is their parent company is located.

Imposing the minimum tax would give Vietnam the opportunity to increase its tax revenues and prevent evasion and transfer pricing and profit transfer frauds, he said.

The global minimum tax of 15% was agreed upon by the G7 rich nations in June 2021.

The 15% tax will apply to companies with revenues of at least €750 million in at least two of the four most recent years.

Some countries like the U.K., Japan, South Korea, and the EU are expected to apply the tax from 2024.

According to the Government, foreign enterprises in Vietnam that are paying a corporate tax rate of less than 15% will have to pay extra to meet the 15% rate.

A review by tax authorities found there are 122 such businesses.

At the meeting, Vu Hong Thanh, head of the National Assembly's Economic Committee, said Vietnam should apply the global minimum tax, but the tax calculation formula and method need to be clear and easy to implement.

According to the finance ministry, foreign companies like Samsung, Intel, LG, Bosch, Sharp, Panasonic, Foxconn, and Pegatron – which account for nearly 30% of FDI in Vietnam – are likely to be affected by the tax.

At its meeting in October, the National Assembly will consider additional tax collection mechanisms for Vietnam to impose the global minimum tax.