Vietnam to impose global minimum tax on foreign companies next year

The 15% tax on corporate income was agreed upon by the G7 rich nations in June 2021 to reduce tax competition between countries and prevent multinationals from evading tax.

The tax will apply to companies with revenues of at least €750 million (US$800 million) in at least two of the four most recent years.

The government has estimated that 122 foreign businesses in Vietnam will have to pay the tax, worth an estimated VND14.6 trillion ($603.31 million) next year.

Since the tax will offset the incentives Vietnam offers foreign investors, lawmakers have called for instituting new ones.

They have called on the government to prepare for lawsuits should foreign companies sue for the right to pay the tax in their home country.

The U.K., Japan, South Korea, and the E.U. also plan to impose the tax next year.