When we talk about "Tax Haven", we think about countries or territories with minimal or no tax liability.

So what do individuals and businesses come to “Tax Haven” to do?

• For individuals: "Tax Haven" helps individuals to legalize the amount of money from non-transparent money sources from elsewhere into transparent money sources with the lowest cost.
• For businesses: "Tax Haven" helps businesses transfer pricing to optimize tax costs.

With an impressive name, “Tax Haven” does not mean complete tax exemption. To maintain the functioning of government as well as operating and controlling the economy, these countries make money and benefit from different sources of revenue, which can be mentioned as follows:

1. Business registration and maintainance fees
2. Take advantage of the huge amounts of money that individuals and multinational businesses move in to make profitable investments and create jobs.
3. Collect other taxes and fees such as: taxes on permits, import taxes, indirect taxes, v.v…

According to the development trend of the world economy, "Tax Haven" tends to become outdated. The most specific is the reform agreement "global minimum corporate tax".

The content of "Glonal Minimum Corporate Tax" has been agreed by O E C D, G20 and G7 member countries. There are 137/141 countries and territories that are members of the “Comprehensive Cooperation Framework” that have reached a framework agreement on the "global minimum corporate tax".

It is expected that companies with global sales of 750 million euros or about $868 million or more will apply the global minimum tax rate at 15%. Companies enjoying tax rates lower than 15% in the country of investment will have to pay the difference in their home country.

So what are the opportunities and challenges if Vietnam joins this agreement?

The application of the global minimum tax will contribute to increasing tax revenue, limiting  tax evasion and tax avoidance by multinational corporations in Vietnam. However, the current general corporate income tax rate in Vietnam is 20% compared to the minimum tax rate of 15%, which is a challenge and requires a research roadmap to apply.

Countries around the world that are tending to compete to attract investment are:

• Simplify State Adminstration
• Clear traffic infrastructure, ports, and airports
• Efficient labor and human resources with reasonable cost.
• To develop domestic enterprises providing services, goods and auxiliary materials for foreign-invested enterprises.
• Safety of social order and quality of living environment.