
Vietnam’s parliament is to impose a 15% tax on multinationals with an annual global turnover of more than $825m in a move which could deter foreign investment in the country.
The law will become applicable from 1 January 2024. Separately, the legislature in Hanoi delayed measures to compensate companies that will be affected by the 15% levy imposed on them.
“The National Assembly is not issuing a separate resolution on investment incentives at this time,†according to Le Quang Manh, head of the assembly’s Finance and Budget Committee, cited by .
Around 122 foreign companies, including giants like Samsung, will face increased tax costs, a government document shows. In Samsung’s case, the South Korean tech company paid as little as 5.1% in tax in 2019 for its smartphone assembly factories in Vietnam, where rates vary by region.
News about the higher tax rate follows a profitable first ten months in terms of foreign direct investment (FDI) for Vietnam. The country $15.29bn in 2,608 new FDI projects between 1 January and 20 October 2023.
Infrastructure is one of the sectors requiring urgent investment. According to , Vietnam lags behind other countries in the region when it comes to rail network density, with 7.9km per 1,000sq-km. In contrast, its northern neighbour, China, boasts almost double that figure (14.2km), while countries like Japan or South Korea take that to 51.7km and 43.3km, respectively.

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By GlobalDataThis year, government officials approved an infrastructure development plan of between $43bn and 65bn meant to cover road, rail, water and air transport. The bill will enable public-private partnerships, with Vietnam looking to complete several projects, including a gas power station in the Southeast Economic Zone of Quang Tri province, as well as a four-line cable-stayed bridge linking Ben Tre City and My Tho City in the second half of the decade.