Southern Binh Duong province has taken measures to cooperate with and help enterprises retain their appeal among foreign investors after the Global Minimum Tax (GMT) is applied in Vietnam from January 1.

The GMT is a key element of a program to combat tax base erosion and profit shifting, initiated by the Organization for Economic Cooperation and Development (OECD) and embraced by more than 140 countries and territories.

Under the mechanism, multinational corporations earning revenue of €750 million ($870 million) or more will be subject to a minimum tax rate of 15 per cent. Thus, when a company invests in a foreign country but pays corporate income tax of less than 15 per cent in that country, it will have to pay the difference in the country where it is headquartered.

Binh Duong is home to more than 4,000 FDI enterprises but only 44 are likely to be affected by the GMT.

To retain and attract more investors, Binh Duong has pioneered coordination with the Institute of Development Strategy and Policy Management and the Vietnam Union of Science and Technology Associations to survey foreign enterprises and develop strategies to attract FDI when the GMT takes effect.

Binh Duong is a bright spot in FDI attraction in Vietnam, Chairman of the Vietnam Union of Science and Technology Associations Phan Xuan Dung told a recent conference on investment promotion and FDI attraction strategies in the province as Vietnam implements the GMT.

The province’ success has been attributed to the resolute implementation of measures to improve its investment environment and mobilize all resources to create and develop new-model industrial parks and green industrial parks while “rolling out the red carpet” to investors, he said.

To help attract more investment and support businesses, Nguyen Minh Thao from the Central Institute for Economic Management said provincial authorities need to continue improving its investment and business environment and promoting administrative reform, considering these as key measures to help businesses overcome the difficulties.

Practical dialogue should also be held between local authorities and businesses to gain feedback and hear of suggested measures to be taken to help tackle the difficulties and obstacles, he said.