Implementing the Global Minimum Tax: Policy Recommendations for Vietnam

Abstract

The implementation of the global minimum tax rule aims to create a level playing field in tax competition among countries and address issues such as tax evasion, tax avoidance, transfer pricing, and profit shifting—challenges that are particularly pressing in the current era of integration and globalization. Scheduled to take effect in Vietnam on January 1, 2024, this rule has significant implications for the country’s corporate income tax policy. This study employs legal analysis, statistical methods, and practical assessments based on secondary documents and expert opinions to evaluate the current state of corporate income tax policy in Vietnam, including its preferential investment policies. It explores the opportunities and challenges associated with the global minimum tax rule and its impact on the development and refinement of tax policies aimed at attracting foreign investment and ensuring sustainable development. The article addresses several key issues: (i) the neutralization of tax incentive policies; (ii) the taxing rights of the investing country; (iii) competitiveness in attracting investment; and (iv) recommendations for the Vietnamese government regarding law-making and effective enforcement. Using normative juridical and qualitative research methods based on secondary literature, this study analyzes the anticipated effects of the global minimum tax policy on Vietnam and examines the trends in legal and policy development, including efforts to reform and integrate international tax commitments.