Vietnam’s legislature has decided to increase the effective tax rate for multinational corporations, including Samsung, to 15% starting from January, in alignment with global tax reforms. While the implementation of measures to offset the higher levy has been delayed, additional incentives for high-tech investors are anticipated to be addressed later. The postponement has raised concerns about potential impacts on future foreign investments, upon which the country heavily relies.
The new tax regulations are set to take effect on January 1, 2024. Although Vietnam’s corporate income tax is currently at 20%, the country has historically provided significantly lower effective rates to major foreign investors. With the revised rate, 122 foreign companies are expected to experience a substantial increase in tax costs, contributing an estimated VND14.6 trillion ($601 million) annually to the state. Notably, Samsung, with its significant revenues from Vietnamese operations, is anticipated to bear a significant portion of this additional tax burden.
Despite queries from Reuters earlier in the week, Samsung has not provided a response regarding the impending tax changes.