This Update highlights recent tax and customs developments in Vietnam.
Global Minimum Tax (“GMT”) Introduction & Potential Tax Reforms – Update
Following Vietnam’s National Assembly’s passed Resolution 107/2023/QH15 dated 29 November 2023 on GMT (“Resolution“), the Vietnam Prime Minister issued Decision 19/QD-TTG dated 8 January 2024 directing the Ministry of Finance to collaborate with competent authorities to draft a decree guiding the implementation of GMT in relation to some provisions of the Resolution. These provisions include article 2.2 on taxpayers, article 4.10 on Qualified Domestic Minimum Top-up Tax (QDMTT), and article 5.13 on the Income Inclusion Rule (IIR). This decree would be granted by the Government before 31 October 2024.
Value-added Tax (“VAT“) Reduction Policy in 2024
On 28 December 2023, to implement Resolution No. 110/2023/QH15 passed by Vietnam’s National Assembly, the Government issued Decree 94/2023/ND-CP (“Decree 94“) together with Appendices guiding VAT reduction policy from 1 January 2024 to 30 June 2024. Decree 94 took effect from 1 January 2024.
VAT Reforms – Proposed Changes in a New Law on VAT
The Vietnam Government recently issued a draft of a new law on VAT which will introduce significant changes to the VAT policy on VAT exemption, rates and refund. These may potentially impact several business sectors including agriculture, maritime, banking, stock exchange, and telecommunication. The new law will replace the current VAT law issued in 2008 and its amendments.
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