Vietnam is raising its tax rate on multinational companies like Samsung and Intel. This is part of a global agreement to crack down on corporate tax avoidance. Vietnam’s parliament voted to raise the corporate tax to 15 per cent, which will affect 122 multinational companies and generate $603 million in state revenue. The move could hurt the country’s appeal to foreign investors. Mitigating measures are expected to offset the impact of the tax rise. The long-planned change comes into effect in January and brings Vietnam in line with a global minimum tax rate. The new tax could affect the amount of tax Chinese companies have to pay in Vietnam and their investment plans. However, some analysts believe that the higher tax will not have a big impact on FDI, as investors find value in Vietnam aside from tax benefits. Vietnam’s FDI has remained strong despite the tax changes and is still appealing to investors for diversification from China.
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