Hanoi (VNA) – The application of global minimum corporate tax from thebeginning of 2024 is expected to be an effective tool to prevent transferpricing and tax evasion, thus helping to increase State revenue throughadditional tax collection.
Vu Chi Hung, Deputy General Director of the Ministry of Finance’s General Department of Taxation, affirmed thatthe ministry and taxation sector have always paid attention to fightingtransfer pricing to prevent tax losses.
He also vowed to directreviewing tax payment obligations of ride-hailingcompany Grab in Vietnam, following news that Grab has not had to pay anycorporate income tax in Vietnam over the past nine years since it began operation inthe country, although it has still transferred hundreds of billions of VND inroyalties and management fees annually to two related companies abroad.
Luu Duc Huy, Director of theTax Policy Department under the General Department of Taxation, said the application of the global minimum corporate tax is also to promote the nation's global integration, reform taxation system up tointernational practices by amending corporate tax policies andrelevant laws.
It is alsoexpected to minimise tax avoidance, tax evasion, transfer pricing and profitshifting, he said.
Vu Chi Hung, Deputy General Director of the Ministry of Finance’s General Department of Taxation, affirmed thatthe ministry and taxation sector have always paid attention to fightingtransfer pricing to prevent tax losses.
He also vowed to directreviewing tax payment obligations of ride-hailingcompany Grab in Vietnam, following news that Grab has not had to pay anycorporate income tax in Vietnam over the past nine years since it began operation inthe country, although it has still transferred hundreds of billions of VND inroyalties and management fees annually to two related companies abroad.
Luu Duc Huy, Director of theTax Policy Department under the General Department of Taxation, said the application of the global minimum corporate tax is also to promote the nation's global integration, reform taxation system up tointernational practices by amending corporate tax policies andrelevant laws.
It is alsoexpected to minimise tax avoidance, tax evasion, transfer pricing and profitshifting, he said.
The issuance of preferential corporate tax policies by countries to attractforeign investments has made these phenomena more complicated,potentially leading to situations where businesses take advantage ofopportunities to shift profits from high-tax countries to lower-tax nations, thereby resulting in tax revenue losses, Huy elaborated.
Accordingto the official, the application of the global minimum corporate tax will create a level ground for taxation in all countries, thereby avoiding tax competitionamong nations and minimising the occurrence of transfer pricing and profitshifting. This will help maintain a stable source of tax revenue.
Huy addedthat the General Department of Taxation advised the Ministry of Finance to work closely withministries, agencies and the NA’s Committee for Finance and Budget to hold seminars andconferences at home and abroad, as well as study solutions to report to the Ministry of Finance, Government and legislature for approval.
Italso proposed enforcing regulations on qualified domestic minimum top-up tax and income inclusion rules toprotect national interests when applying the global minimum corporate tax./.
Accordingto the official, the application of the global minimum corporate tax will create a level ground for taxation in all countries, thereby avoiding tax competitionamong nations and minimising the occurrence of transfer pricing and profitshifting. This will help maintain a stable source of tax revenue.
Huy addedthat the General Department of Taxation advised the Ministry of Finance to work closely withministries, agencies and the NA’s Committee for Finance and Budget to hold seminars andconferences at home and abroad, as well as study solutions to report to the Ministry of Finance, Government and legislature for approval.
Italso proposed enforcing regulations on qualified domestic minimum top-up tax and income inclusion rules toprotect national interests when applying the global minimum corporate tax./.
VNA