In a recent development, Vietnam's National Assembly has given the green light to a 15% global minimum corporate tax, set to take effect on January 1, 2024. The move, aimed at companies like Samsung, is expected to generate an additional 14.6 trillion dong ($601 million) annually. Currently, Vietnam's corporate tax rate is 20%, but foreign investors enjoy lower effective rates.
According to a government document, 122 foreign companies will face a "steep increase" in their tax costs. Notably, Samsung, a major player in Vietnam's economy, is anticipated to bear a significant portion of the new tax burden. The South Korean tech giant assembles half of its smartphones in Vietnam, contributing multi-billion-dollar revenues.
The announcement came as part of a dual decision by the parliament, which also deferred planned offsets for high-tech companies with investments exceeding 12 trillion dong. Among the mechanisms considered were cash subsidies, initially proposed in August. The delay in these offsets adds to the impact on businesses facing the upcoming global minimum corporate tax, marking a significant development in Vietnam's taxation landscape.
By fLEXI tEAM