As of January 2024, Vietnam has attracted 9,891 investment projects, of which the number of Korean-invested enterprises accounts for over 50% of the charter capital is 8,058 enterprises, accounting for 28% of the total number of foreign direct investment enterprises in Vietnam. South Korea is currently one of the 144 countries and territories in the world investing in Vietnam as of the current time.
According to Deputy Minister Cao Anh Tuan, every year, the Ministry of Finance has handled hundreds of documents from Korean companies investing nationwide, related to all the production and business activities of Korean companies investing and doing business in Vietnam.
Many tax solutions have no precedent to support Korean investment
The Ministry of Finance has coordinated discussions, consultations, and research with competent authorities to consider revising and supplementing policies to provide maximum support for the community of foreign direct investment (FDI) enterprises in Vietnam to comfortably expand production, such as: FTBT tax refunds, problems related to procedures, tax invoices at export-processing zones, tax incentives for corporate income, import-export taxes regarding costs when calculating corporate income tax.
Deputy Minister of Finance Cao Anh Tuan said: “Many solutions with no precedent regarding taxes, fees, and charges to support the general public, businesses in general and Korean businesses in particular with large support values. Specifically: The Ministry of Finance has issued 60 legal documents with a total value of about VND 200,000 billion/year supporting the reduction of VAT, corporate income tax, personal income tax, special consumption tax, and land rental fees; exempting and reducing corporate income tax, personal income tax, VAT, import tax, environmental protection tax, and many fees, charges, and land rental fees to support businesses, people, and the economy”.
Speaking at the conference, Korean Ambassador to Vietnam Choi YoungSam said that most countries in the world are making efforts to build a tax system with a broad tax base and a low tax rate to ensure a stable tax foundation.
“I believe that creating a stable economic ecosystem in which many economic entities can operate dynamically is the most important key to ensuring a broad tax base, or in other words, ensuring stable tax revenue. In recent years, the tax environment has changed rapidly, and tax regulations and administrative procedures have also continued to change. With that in mind, I think that today’s tax and customs dialogue event is of great significance. The tax and customs dialogue event for Korean businesses has been regularly organized since 2008 and has become a precious exchange between the Vietnamese tax and customs authorities and Korean businesses investing in Vietnam,” Mr. Choi YoungSam said.
Currently, Korean investors are assessed by economic experts as potential partners in Vietnam’s development strategy. In the first two months of this year, according to the Foreign Investment Agency, the Ministry of Planning and Investment, there have been 48 countries and territories investing in Vietnam. South Korea leads in the number of capital adjustments, accounting for nearly 26%.
To proactively respond to the deployment of Pillar 2 on global minimum tax within the framework of the Anti-Base Erosion and Profit Shifting Forum, the Ministry of Finance has collaborated with ministries, sectors, and consulted the opinions of the FDI business community in Vietnam, including Korean enterprises, to submit to the National Assembly for issuance of Resolution No. 107/2023/QH15 on the application of supplementary corporate income tax regulations against global base erosion and profit shifting to be implemented from the beginning of this year.
Continuing to accompany businesses investing in Vietnam in general and Korean businesses in particular, the Ministry of Finance said it will continue to improve policy mechanisms, promote administrative reforms and comprehensive digitization and synchronization in the tax and customs sectors towards continuing to create an equal, transparent, and convenient business environment for the domestic business community and the FDI business community in Vietnam.
