The Vietnam Chamber of Commerce and Industry (VCCI) has submitted feedback to the Ministry of Finance regarding a draft decree guiding the implementation of the Law on Corporate Income Tax.

One key concern is the proposed increase in tax rates on foreign corporate income from loan interest and capital transfers. Specifically, Clause e, Point 2, Article 11 of the draft suggests raising the current tax rate from 5% to 10%.

VCCI argues that such a hike could weaken Vietnam’s attractiveness to foreign investors, especially amid intensifying global competition for investment capital. A higher tax rate would reduce investor profits, prompting them to seek more favorable environments elsewhere. It would also raise capital costs for Vietnamese businesses, increasing operational expenses and eroding competitiveness.

Additionally, VCCI has requested clarification on the provision concerning tax rates applied to capital transfers by owners who do not directly manage enterprises in Vietnam. The organization notes that the lack of clear criteria for defining “non-direct management” is causing difficulties for businesses.