VCI LEGAL PARTNER KENT WONG COMMENTS TO VIR ON TAX RULES IMPOSED ON CROSS-BORDER PROVIDERS
On 5 May 2022, Mr. Kent Wong, Partner and Head of Banking & Capital Markets at VCI Legal LLP and Chairman of the European Chamber of Commerce in Vietnam (EuroCham) Legal Sector Committee, was interviewed by Vietnam Investment Review (VIR) about the imposition of suitable tax rules on cross-border providers.
In October 2021, a global minimum tax was agreed amongst 137 of the 141 nations that are members of an inclusive framework on tax base erosion and profit shifting (BEPS) from the G20 and the Organisation for Economic Co-operation and Development (OECD). This was a major step forward in supporting sustainable development goals. Accordingly, multinational corporations will be liable to a minimum 15 per cent tax rate in every place of operation from 2023.
With respect to Vietnam, Kent Wong commented that “if the minimum global tax rate is applied, then any tax savings enjoyed by qualified multinationals in Vietnam will be muted.”
Kent also expressed the risk of double taxation applied to US-based companies in both Vietnam and the US, even though Vietnam and the US have an agreement on avoidance of double taxation and prevention of fiscal evasion with respect to income taxes.
Finally, Kent also raised the concern of Vietnamese lawmakers for transfer pricing regulations in Vietnam to be in line with the OECD’s new approach to transfer pricing and international practice.
The interview article can be found here at: https://vir.com.vn/imposing-suitable-tax-rules-on-cross-border-providers-93259.html