The Relationship Between Corporate Income Tax and Foreign Direct Investment in Vietnam in the Context of the Global Minimum Tax Implementation

This study aims to analyze the structural shift in the relationship between corporate income tax (CIT) and foreign direct investment (FDI) in Vietnam, in the context of the official implementation of the Global Minimum Tax (GMT). Employing a qualitative research method, primarily through desk-based documentary analysis, the paper synthesizes and evaluates the rules of the Organisation for Economic Co-operation and Development, Vietnam's legal policies, and relevant scholarly works to clarify the multifaceted impacts of this new tax mechanism. The research findings indicate that the GMT has directly neutralized Vietnam's core competitive advantage, which was based on low CIT rate incentives. This mechanism causes the benefits from tax incentives to no longer accrue to the investor but instead risk being shifted to the parent company's home country, thereby posing a serious challenge to Vietnam's traditional FDI attraction model. Consequently, non-tax factors such as institutional quality, infrastructure, and human resources become the decisive factors in maintaining the nation's investment attractiveness. From these findings, the study affirms the urgent importance of Vietnam implementing a Qualified Domestic Minimum Top-up Tax (QDMTT) to protect its taxing rights and revenue base. Concurrently, a key policy implication is the necessity of a strategic shift from income-based incentives to cost-based support mechanisms and of focusing resources on substantively improving the overall investment environment. The novelty of the study lies in providing one of the first comprehensive and timely analyses of the GMT's impact in Vietnam, offering specific scientific arguments for policymakers in the process of reshaping the strategy for attracting high-quality FDI in the new era.