Introducing global minimum tax to increase revenue for sustainable development

Viet Nam can earn additional tax revenue from the global minimum tax to offset financing gaps - with support from the European Union (EU), German Government and the Organisation for Economic Co-operation and Development (OECD).

Multinational enterprises (MNEs) exploit gaps and mismatches between different countries' tax systems to avoid paying taxes, shifting their profits to low-tax jurisdictions. According to the OECD, such Base Erosion and Profit Shifting (BEPS) practices cost countries, including Viet Nam, USD 100 to 240 billion in lost tax revenue annually. To address this problem, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (IF) was developed and brings together more than 135 countries and jurisdictions that collaborate on tackling BEPS.

Under the “Strengthening Public Financial Management” project, co-funded by the European Union and the German Government, the Ministry of Finance of Viet Nam and GIZ are collaborating to support the implementation of the global minimum tax in Viet Nam. The latter shall ensure that MNEs pay their fair share of tax. Additional tax revenue from the global minimum tax could be fully used in Viet Nam to finance essential public services for achieving sustainable development.

From 30 May to 2 June, a workshop was held at the office of the General Department of Taxation in Hanoi, in which OECD experts provided technical training in global minimum tax to 120 Vietnamese tax officials at national and sub-national levels.

Most participants stated that the topics covered in the training were relevant and useful for their work. The training was one of the first steps in implementing the global minimum tax in Viet Nam and GIZ commits to providing further support in this area.