1. In the past 30 years before the history of Vietnam's leek stickers, Vietnam has been actively attracting foreign investment and striving to become the most popular foreign country in Southeast AsiaInvestmentsOne of the favored countries. However, the latest decision to raise the tax rate for foreign companies has sparked public concern and doubt. It looks like Vietnam is about to start "cutting leeks", following India's example of tax increases, posing a serious challenge for foreign companies. Vietnam** expects that this tax reform will add about 6 to the national treasury per year$1.1 billion in tax revenues. However, whether this "leek-cutting" initiative is really cost-effective, for a highly dependent foreign countryInvestmentsThere is still a great deal of uncertainty.
Since 1987, Vietnam has been through foreign businessmenInvestmentspolicies to attract foreign investment, and remarkable results have been achieved. Vietnam is favored by many large multinational companies around the world, making it the most popular foreign country in Southeast AsiaInvestmentsOne of the countries. According to a joint report by IHSMARKIT in the United Kingdom and the University of Tennessee in the United States, Vietnam is among the 60 most popular foreign direct destinations in the worldInvestmentsIt ranked 25th among the welcoming countries, surpassing countries such as Indonesia, the Philippines and Thailand. However, Vietnam still faces a high dependence on foreign investment.
VietnameseEconomyGrowth is largely dependent on foreign directInvestments, accounting for about 4%-6% of Vietnam's GDP. According to HSBC's research data, as of the end of last year, foreign directInvestmentsThe total has exceeded $438 billion. Therefore, the increase in the tax rate for foreign companies may lead to foreign investment in VietnamInvestmentsThe total decreased. To avoid this, Vietnam** plans to provide cash subsidies to high-tech companies to cover a number of costs such as training, research and infrastructure. However, as details have not yet been announced, it may be difficult for affected companies to meet the criteria for receiving the benefits at this time.
GlobalInternationalReform of the tax system is a global initiative aimed at addressing multinational corporationsProfitsTransfer and tax avoidance issues. The OECD announced in 2021 that 136 countries and territories around the world had agreed to the reform, including Vietnam. Two important aspects of this reform are: first, for multinational corporations that operate globally, they will be taxed not only in the country where their headquarters are located, but also in the country in which they operate;Secondly, it will be the lowest in the worldCorporate tax rateSet it to 15%. According to this reform, all annual incomes exceed 7This rate will apply to all multinationals of up to 500 million euros.
Vietnam's move to raise the tax rate on foreign companies is against the OECDInternationalResponse and implementation of tax system reform initiatives. The OECD Secretary-General personally advocated for the reform and said it would be very beneficial for developing countries. After the implementation of the reforms, there are about 100 large multinational companies in the worldProfitsIt will be redistributed to individual countries. From a data point of view, the benefits of this reform outweigh the disadvantages. However, for such a highly dependent foreign country as VietnamInvestmentsmay not be negligible.
Vietnam has always wanted to attract foreign countries by attracting themInvestmentsto propel themselvesEconomyDevelopment and dependence on foreign capital have become Vietnam's strategic choices. However, with the globalizationEconomywithIndustrial chainVietnam is also facing a series of challenges and tests. in foreign businessInvestmentsUnder the impetus of the Act, Vietnam has successfully attracted a large number of foreign countriesInvestments, but at the same time, Vietnam's ownEconomystructure andIndustrial chainIt is also gradually restricted.
Vietnam used to have high hopes to become the world's factory. However, the Chinese oneEconomystrength andIndustrial chainCompetitiveness remains elusive. Although Vietnam has already taken on a partIndustrial chain, but only in ChinaIndustrial upgradingA part of the process that was discarded. VietnameseEconomyGrowth is still highly dependent on foreign investment, especially foreign directInvestments
Tax hikes may be on VietnamEconomyNegative impact. Some foreign companies have already expressed concerns about the move and are likely to adjust in VietnamInvestmentssize and plans. In addition, some businesses may consider shelving or withdrawing in VietnamInvestmentsPlan. For Vietnam, how to balance the relationship between attracting foreign investment and safeguarding its own interests is a complex and serious challenge.
In this globalEconomyIn times of instability, countries need to carefully consider the adjustment of tax policies to balance the attraction of foreign countriesInvestmentsand the need to protect national interests. For Vietnam, raising the tax rate for foreign companies is just the solutionEconomyOne aspect of the development dimension that needs to be strengthened also needs to be strengthenedEconomyEfforts to adjust the structure, enhance the competitiveness of domestic industries, and cultivate local enterprises. Sustainability can only be achieved through multidimensional effortsEconomyDevelop.