Vietnam Legal Update: In Minutes (January 01, 2024)

Vietnam is set to implement a series of significant regulatory changes that will impact various aspects of business and corporate operations. The following legal updates are scheduled to take effect this week:

1. Global Minimum Tax Implementation: Commencing in January 2024, Vietnam introduces a 15% Global Minimum Tax (GMT) on multinational corporations (MNCs) generating revenues exceeding €750 million. This initiative aligns with the Global Anti-Base Erosion (GloBE) model rules, targeting specific revenue thresholds over a designated period for member companies of MNCs. This measure reflects Vietnam’s commitment to international tax reforms and efforts to ensure fair taxation of corporate profits.

2. Amendments to Government Bonds Regulations: Under Decree No. 83/2023/ND-CP effective from January 1, 2024, Vietnam revises regulations concerning the private issuance of Government bonds. This decree amends and supplements the previous Decree No. 95/ND-CP (June 2018), detailing the issuance, registration, depository, listing, and trading of Government debt instruments in the securities market. Notably, it introduces new protocols for the private issuance of government bonds, delineating methodologies for direct sales to purchasers or through designated distribution agents, including commercial banks and foreign bank branches. The State Treasury holds the responsibility to devise and propose these private issuance plans, subject to the Ministry of Finance’s approval.

3. Value-Added Tax (VAT) Reduction: The government has sanctioned a 2% decrease in VAT rates for a broad spectrum of goods and services, to be effective from January 1 to June 30, 2024. This decrement applies primarily to goods and services traditionally subjected to a 10% VAT, while excluding certain sectors such as telecommunications, financial services, banking, securities, insurance, real estate, and other delineated categories. This temporary VAT cut aims to provide economic relief and stimulate market activity.

4. Fuel Environmental Tax Reduction: A significant 50% reduction in the environmental protection tax on fuel is set for the period of January 1, 2024, to December 31, 2024. This decision is anticipated to lessen the economic strain on both residents and businesses, with considerable repercussions expected for the state budget and diverse economic sectors.

5. Revised Foreign Worker Recruitment Policy: In alignment with the new policy stipulated in Decree No. 70/2023/ND-CP, effective from the onset of 2024, the recruitment of foreign workers in Vietnam will undergo stricter regulations. Foreign workers may only be hired in the absence of suitable Vietnamese candidates.

Related Posts

Leave a Reply