Vietnam Outlines its Approach to Addressing GMT Impacts
During the Vietnam-South Korea Business Forum held in late June, Do Nhat Hoang, the Director General of the Foreign Investment Agency at the Ministry of Planning and Investment (MPI), announced that Vietnam is actively working on new mechanisms and policies to attract large foreign-invested enterprises (FIEs) in anticipation of the global minimum tax (GMT) implementation from early 2024. Approximately 100 major FIEs will be subject to this tax.
Hoang stated that the proposed measures to harmonize business interests and state requirements, aligning them with international commitments, are expected to be submitted to the National Assembly (NA) in October. Additionally, special investment incentive mechanisms will continue to be enforced for projects in innovation, research and development (R&D), semiconductors, clean energy, and high-tech agriculture.
Hoang Viet Tien, Deputy Secretary General of the Vietnam Digital Communication Association, emphasized the significance of this announcement, highlighting Vietnam’s strong determination to facilitate investors and maintain its attractiveness amidst regional announcements regarding GMT actions. Countries like Singapore, Malaysia, Thailand, and Hong Kong have also made declarations regarding the application of GMT, implementing measures such as the qualified domestic minimum top-up tax (QDMTT) and introducing new preferential policies to boost foreign investment.
Vietnam’s National Assembly Chairman, Vuong Dinh Hue, discussed GMT-related matters with South Korean President Yoon Suk-yeol during the latter’s official visit to Hanoi. The NA has requested a review of these issues, with plans to consider them at the end-of-year session. The Ministry of Finance, in collaboration with the MPI and other ministries, is currently developing supporting policies. These policies are expected to include increased investment in infrastructure within industrial zones where these businesses operate, support for human resource training, R&D assistance, and other measures aligned with Vietnam’s commitments.
While awaiting further details on solutions and measures, investors and businesses from various countries are eager to understand Vietnam’s GMT orientation to assess potential impacts and develop appropriate plans. Many South Korean giants are already planning expansions in Vietnam. For instance, Samsung Vietnam announced its intention to expand the supply chain from Vietnamese enterprises to ensure a stable manufacturing complex. Similarly, Doosan Group expressed interest in large-scale gas and wind power development projects during the forum.