New corporate income tax law aims to halt tax evasion
In the latest draft of Law on Corporate Income Tax, the Ministry of Finance has raised a regulation aimed at preventing multinational companies with related-party transactions from evading taxes.
Tax experts expect that the cap on interest expense for tax reduction would help prevent transfer pricing and tax evasion. (File Photo)
Hanoi (VNA) - Inthe latest draft of Law on Corporate Income Tax, the Ministry of Financehas raised a regulation aimed at preventing multinational companies withrelated-party transactions from evading taxes.
According to the proposedregulation in the amended draft, the part of interest expense that exceeds 20 percentof the company’s earnings before interest, taxes, depreciation and amortisation(EBITDA) will not be subject to tax deduction.
The ministry said severalforeign-invested companies operating in real estate, trade and services, forexample, reported losses despite posting growths in revenue and expanding theirbusinesses.
Looking at their financialreports, the ministry found that one of the reasons for the loss was the hugesum of interest expense the parent companies needed to pay.
Experts said the cap oninterest expense for tax reduction would help prevent transfer pricing and taxevasion.
Economic expert Nguyen Tri Hieusaid the fight against transfer pricing and tax evasion had been a headache formany years. If the regulation was included in the CIT law, tax evasion could beprevented, Hieu said.
He also said the cap oninterest expense for tax reduction should be applied to companies that hadrelated-party transactions and differences in CIT rates among members.
Meanwhile, the latest drafthas removed a proposed regulation about thin capitalisation that was raised inthe previous draft which largely met with opposition because it might havecaused more difficulty for businesses.
The finance ministry hadpreviously proposed that the part of interest expense for loans which exceededfive times the company’s equity would not be deducted from tax.
According to the Vietnam TaxConsultants’ Association, this regulation, if passed, will cause a lot of difficultiesfor companies whose equity was not enough to maintain their business.
The more they borrowed, themore tax they would have to pay. And if they did not borrow, they would nothave capital to do business, the association said.-VNA
The Ministry of Finance (MoF) will continue coordinating with the State Bank of Vietnam and other competent authorities to review the use of Malaysian company Grab’s grants from the mother company to its local branch.
Despite concerns from economic experts about the undetermined scale and scope of Vietnam’s undocumented market transactions, authorities are adamant that the illicit economy is under control and will soon be regulated heavily.
The festival marks a significant milestone in promoting the brand, value, and legacy of traditional fish sauce - a product deeply rooted in the island’s identity and history spanning over 200 years.
According to Mastercard data, Vietnam has recorded a remarkable 92% compound annual growth rate (CAGR) in contactless transaction volume from Q4 2022 to Q4 2024.
Tuan expressed his confidence that LH, with its expertise and experience, would swiftly implement the urban area project, contributing to a modern urban landscape for the province.
With its strategic location, abundant workforce, and modern infrastructure, Vietnam holds significant potential to become a leading centre for power and electronics production in the region and the world.
The renewable energy workforce training and development centre, invested by Germany's GEO Group, is expected to be a cornerstone in shaping Binh Dinh as a renewable energy and innovation hub in central Vietnam, meeting the growing demand for skilled technical personnel in offshore wind, solar farms, and green hydrogen projects.
A notable trend is the shift toward satellite regions. With land scarcity and soaring prices in Ho Chi Minh City and Hanoi, investors are eyeing provinces like Hung Yen, Bac Ninh, and Hai Phong, which are benefiting from improved technical infrastructure and transport connectivity.
To further strengthen private-sector innovation, Bac Ninh plans to accelerate administrative reforms, build a digital, service-oriented government, and develop an integrated innovation ecosystem that connects businesses with domestic and international institutions, universities, and experts.
The participation of H&M, one of the world's largest fashion corporations, in Vietnam International Sourcing 2025 in Ho Chi Minh City in early September is considered a special highlight, opening up many cooperation opportunities for Vietnamese businesses in the fashion, textiles and sustainable supply chains.
This latest order builds on a previous agreement signed at the Singapore Airshow last year for 40 engines, bringing the total number of Trent 7000 engines ordered by the airline to 80.
Minister of Industry and Trade Nguyen Hong Dien acknowledged that despite concerted efforts by ministries and local authorities in combating fake and substandard goods, the situation remains highly complicated, attributing the persistent challenges to high profits luring numerous participants, increasingly sophisticated violations, limited resources within enforcement agencies.
The group also placed among the Top 5 energy companies in Southeast Asia and secured the top spot among the largest Vietnamese enterprises featured on the list.
The zone will cover 1,881 ha, comprising functional areas for production, logistics, trade and services, digital technology industry, information technology, and innovation.
Dung underlined several key objectives, including a comprehensive review of the legal framework governing SOEs, and called for updates that reflect international standards and support modern, transparent governance.
While the US market has become more difficult to access due to new tax policies, Australia could play the role of a trade cushion, helping to reduce shocks and maintain export momentum for Vietnam's shrimp industry.
Vietnam Cycle Expo 2025 will coincide with the Vietnam Sport Show 2025, an international exhibition on sports and outdoor entertainment, expected to attract more than 20,000 visitors in the three-day event.
Tax experts expect that the cap on interest expense for tax reduction would help prevent transfer pricing and tax evasion. (File Photo) 
