Hanoi, 9 November 2023, EY Consulting Vietnam Joint Stock Company (EY Consulting VN) cooperated with the Vietnam Chief Financial Officer Club (CFO Vietnam) to organize the Tax Symposium 2023 themed “Anticipating the future for change”. This is an annual event to help businesses grasp the latest trends and developments in the domestic and international tax policy environment, along with an in-depth analysis of opportunities and potential impacts of these policies on businesses.
Economic digitalization, underpinned by globalization, has been rapidly advancing on a global scale, fostering innovative and diverse business models where digital technology plays a pivotal role and has a profound impact. This movement is clearly shown in the investment expansion and shifting efforts of multinational corporations on global scale, as well as the increasing popularity of new types of economic transactions such as e-commerce and digital platform-based businesses.
In response to these emerging movements, the Organization for Economic Co-operation and Development (OECD) and Finance Ministers of various countries have urged all countries to devise action plans and new tax policies. This approach necessitates close coordination among countries to avoid tax revenue loss. Specifically, many countries are formulating policies in response to the OECD Base Erosion and Profit Shifting (BEPS) 2.0 such as the Global Minimum Tax (Pillar 2); or Rules on cross-border service activities, including those involving digital platform-based business activities (Pillar 1).
According to Vietnam Ministry of Information and Communications, the ratio of digital economy to Vietnam's GDP in 2022 was estimated at 14%[1] .Vietnam ranks as the fifth most open economy in Asia out of 37 nations evaluated by Fitch Solutions in its Vietnam Trade & Investment Risk Report[2] . Given these attributes, Vietnam cannot remain detached from global trends and is forced to craft new policies, including tax policies, in an appropriate and effective manner.
As international tax policies evolve and progress, there is a pressing need to adapt domestic tax policies to align with the new circumstances. In addition to considering amendment proposals to policies regarding tax, customs, and transfer pricing (TP) to manage cross-border transactions, domestic tax laws such as the Law on Value Added Tax, Law on Special Consumption Tax, Law on Corporate Income Tax, Law on Personal Income Tax all have amendments proposed and submitted to the National Assembly for comments and approval in the 8th and 9th sessions of the 15th-tenure National Assembly.
These changes in tax policy are aimed at refining the legal framework, adapting to the current circumstances, and helping Vietnam tax sector in approaching international tax regulations. For instance, the Law on Corporate Income Tax is anticipated to have the supplemented content on the Global Minimum Tax, which is currently being proposed in the form of a Pilot Resolution. Another example is that policies on Value Added Tax, invoices and records also need to be changed to accommodate electronic transactions, in the context of enhanced capability of business responsiveness and the tax authorities’ management. Besides, the proposals on customs-related policy are aimed at replacing on-the-spot export and import transactions with standard procedures that accurately reflect their true nature. This shift is intended to ensure compliance with international practices, mitigate the risks of policy exploitation, and prevent tax revenue loss.
