The Daybreak of the Global Minimum Tax: Striking the Balance Between Foreign Investment Attraction and International Tax Standards

DOI

10.2991/978-2-38476-247-7_64How to use a DOI?

Keywords

BEPS; global minimum tax; pillar; Vietnam

Abstract

The Global Minimum Tax (GMT) - a pivotal component of the Organization for Economic Co-operation and Development’s (OECD) Inclusive Framework on Base Erosion and Profit Shifting (BEPS) - endeavors to establish a uniform international threshold for corporate taxation, thereby augmenting fairness, transparency, and stability within the global tax arena. Given the context of Vietnam’s growing economy, the country faces the intricate challenge of harmonizing its Corporate Income Tax (CIT) with international standards to prevent tax base erosion while simultaneously nurturing an environment conducive to both foreign and domestic investments. As a result, the GMT brings about significant implications for the Vietnamese tax landscape. In this paper, the authors briefly revisit the fundamental rules governing the GMT before we delve into its implementation and implications in Vietnam. We argue that implementing the GMT in Vietnam presents both opportunities and challenges. While the GMT offers an opportunity to enhance tax fairness, create tax revenues for the State budget, and align with international tax standards, it also poses challenges, such as the need for legislative and administrative reforms. As Vietnam advances towards harmonizing its tax system with the GMT, weighing the benefits against the complexities is imperative to ensure a balanced implementation that fosters economic growth while maintaining fiscal sovereignty. The authors also make several recommendations for Vietnam to effectively implement the GMT, emphasizing the revision of domestic CIT legislation to cultivate an attractive investment environment that concurrently adheres to international tax standards.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Nguyen The Duc Tam
AU  - Nguyen Thai Ngan
PY  - 2024
DA  - 2024/09/04
TI  - The Daybreak of the Global Minimum Tax: Striking the Balance Between Foreign Investment Attraction and International Tax Standards
BT  - Proceedings of the 2nd International Conference on Advance Research in Social and Economic Science (ICARSE 2023)
PB  - Atlantis Press
SP  - 638
EP  - 645
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-247-7_64
DO  - 10.2991/978-2-38476-247-7_64
ID  - Tam2024
ER  -