As a follow-up to our previous tax alerts on Global Minimum Tax (GMT), we’d like to provide an update on Vietnam’s adoption of GMT.
Vietnam’s GMT rules—introduced under Resolution No. 107/2023/QH15—will take effect from the 2024 financial year, with compliance obligations starting in 2025. The regime includes the Qualified Domestic Minimum Top-up Tax (QDMTT), aligned with the OECD’s Pillar Two framework and is consistent with the OECD’s GloBE rules.
While the final implementation decree has not yet been issued, a draft decree has been released by the Ministry of Finance and is currently under review.
Impact on companies in Vietnam
Resolution 107 will affect companies in Vietnam that are part of a multinational enterprise (MNE) group with annual consolidated revenues of €750 million or more in at least two of the four preceding financial years.
If your company’s Effective Tax Rate (ETR) is below 15%, a top-up tax will be imposed to bring the ETR up to the minimum threshold.
The determination of ETR under the GloBE rules is complex and may differ significantly from local tax calculations. Even if your ETR appears to exceed 15%, filing obligations still apply under the draft decree.
Draft Decree: Key compliance requirements for QDMTT
Under the draft decree, the following compliance steps are required:
- Appointment of a Constituent Entity (CE) in Vietnam to be responsible for GMT compliance if the group has more than one CE in Vietnam.
- Deadline: Within 30 days from UPC’s year-end date.
- Initial Tax Registration for QDMTT purposes, a tax code will be issued to the CE.
- Deadline: Within 90 days from UPC’s year-end date.
- Filing Obligations for QDMTT include:
- GloBE Information Return
- Supplementary Corporate Income Tax Return
- Reconciliations and explanations of differences in accounting standards
- Reporting pack of the CE used for the preparation of group financial statements
- Deadline: Within 12 months from the end of UPC’s financial year
Recap of the key transitional measures
- Administrative Relief: Certain administrative penalties related to tax declarations may be waived during the transitional period to allow companies time to adapt to the new compliance requirements.
- Top-up Tax Deferral: There may be no requirement to pay top-up tax for jurisdictions during the transitional period, though this is subject to further clarification in the final decree.
- QDMTT Exemption for New Entrants: Companies in the early phase of operations in Vietnam may be exempt from QDMTT, provided they meet specific conditions (not yet finalized).
Our recommendation
Given the upcoming implementation of the Global Minimum Tax and the complexity of the GloBE rules, we strongly recommend that affected businesses begin preparing now. This includes assessing group structures, reviewing effective tax rates, and evaluating data readiness for compliance.
Although the final implementation decree is still pending issuance by the government, the draft provides a clear indication of the expected compliance framework. Early preparation will help mitigate risks and ensure your organization is well-positioned once the rules are finalized.
Even if your current ETR appears to exceed 15%, the GloBE methodology may yield different results, and filing obligations will still apply. Please reach out to us if you would like support with impact assessments, compliance planning, or navigating the transitional provisions.
Kevin Lam – Partner – k.lam@Vieter.com
Tua Tran – Accounting Manager – tua.tran@Vieter.com