Vietnamese lawmaker urges less reliance on corporate income tax incentives to attract investment

Vietnam’s National Assembly discussed a draft resolution on special mechanisms and policies for tourism development on November 11. Trần Văn Lâm, a lawmaker from the Bắc Ninh City delegation, said Vietnam should reassess how effectively corporate income tax incentives attract tourism projects, rely less on tax cuts as its main investment incentive, and strengthen support measures directly linked to investment activities.

Trần Văn Lâm noted that Vietnam has applied the global minimum tax rules since 2024. Multinational groups within their scope with consolidated revenue of at least €750 million must, in principle, meet a minimum tax rate of 15%. The draft resolution proposes a preferential rate as low as 10% for certain projects, tax exemptions for up to 4 years, and tax reductions in subsequent years. Companies receiving the same 10% preferential rate may see different benefits: those belonging to large multinational groups subject to the global minimum tax rules may also have to pay a top-up tax.

Responding to a government report proposing that the Investment Support Fund compensate companies for top-up taxes incurred under the global minimum tax rules, Trần Văn Lâm called for a clearer explanation of how tax incentives, top-up taxes and fund support relate to one another. He said the fund has its own objectives, eligible recipients and conditions, and does not automatically refund all top-up tax paid by a company. He proposed studying support measures such as infrastructure development, workforce training, technological innovation and green transition, and assessing their effects on different businesses and investors.

The draft also proposes a 30% reduction in land rent for green space, water areas and landscaped land at hotels and resorts rated 4 stars or above, where those areas are neither shared nor directly used for business. Trần Văn Lâm urged a review of the star rating requirement: applying for a hotel star rating is voluntary, and ratings mainly reflect the quality of facilities and services rather than directly measuring environmental performance. Some small and medium-sized ecotourism facilities could therefore be excluded. He also called for an assessment of the fiscal impact and fairness among businesses.

Source: VietVance