Vietnam’s Global Minimum Tax implementation: Overall and key points of Decree 236/2025/ND-CP

Key takeaways

• Decree 236/2025/ND-CP implements Vietnam’s Global Minimum Tax effective October 15, 2025, targeting multinational groups with EUR 750 million revenue.
• Vietnam adopts OECD Pillar Two framework with Qualified Domestic Minimum Top-up Tax prioritizing domestic collection over foreign jurisdiction rules.
• Safe harbor provisions exempt entities with effective tax rates above 15% and de minimis thresholds below EUR 10 million in revenue.
• Multinational enterprises must register within 30 days after fiscal year-end and file electronic returns within 12–18 months, depending on the provision type.

Vietnam has achieved a significant milestone in international tax compliance. The country became the first Southeast Asian nation to receive OECD transitional qualified status for its Global Minimum Tax (GMT) implementation. This recognition positions Vietnam as a leader in regional tax reform and signals strong commitment to international cooperation.

Decree 236/2025/ND-CP (“Decree 236”) represents more than regulatory compliance. It establishes Vietnam as an attractive destination for multinational enterprises (MNEs) seeking tax certainty and operational efficiency. The decree balances international obligations with domestic economic objectives, creating opportunities for sustainable foreign investment.

Vietnam’s strategic adoption of OECD Pillar Two framework

Understanding transitional qualified status

Transitional qualified status represents the OECD’s formal recognition of a jurisdiction’s GMT implementation. This status confirms that Vietnam’s domestic rules align with the Global Anti-Base Erosion (GloBE) Model Rules under Pillar Two.

The significance extends beyond technical compliance. MNEs operating in qualified jurisdictions benefit from:

• Reduced administrative burden through streamlined reporting requirements
• Enhanced tax certainty with standardized calculation methods
• Coordinated enforcement preventing double taxation scenarios
• Priority treatment in top-up tax allocation mechanisms

Vietnam’s achievement marks the culmination of extensive consultation processes. The OECD assessed Vietnam’s legislation against rigorous compliance metrics, evaluating technical provisions, administrative procedures, and enforcement capabilities.

Vietnam’s compliance with OECD Pillar Two framework

Vietnam successfully met all key OECD assessment criteria:

• Technical alignment: Decree 236 provisions mirror GloBE Model Rules structure and calculation methods
• Administrative capacity: Robust systems for registration, filing, and enforcement procedures
• Information exchange: Commitment to Country-by-Country Reporting and multilateral cooperation
• Legal framework: Constitutional authority and legislative procedures ensuring rule stability

The OECD specifically recognized Vietnam’s Qualified Domestic Minimum Top-up Tax (QDMTT) mechanism. This domestic collection system prevents foreign jurisdictions from imposing Income Inclusion Rules (IIR) on Vietnamese operations meeting effective tax rate thresholds.

Vietnam’s compliance documentation demonstrates sophisticated understanding of international tax coordination. The decree incorporates safe harbor provisions, ordering rules, and transitional measures that exceed minimum OECD requirements.

Legislative journey from Resolution 107/2023/QH15 to Decree 236/2025/ND-CP

Timeline of Key Milestones:

• July 2023: Resolution 107/2023/QH15 authorizes GMT implementation
• September 2023: Initial draft consultation with business community
• December 2023: Incorporation of OECD feedback and technical refinements
• March 2024: Final stakeholder consultation and regulatory impact assessment
• December 2024: Decree 236/2025/ND-CP promulgation
• January 2025: Effective date for fiscal years beginning January 1, 2025

The legislative process emphasized stakeholder engagement and international coordination. Major amendments addressed business concerns about compliance costs while maintaining OECD alignment requirements.

Scope of application: Multinational enterprise groups subject to Global Minimum Tax

Vietnam implements a sophisticated dual-mechanism approach combining QDMTT and IIR systems. This framework ensures comprehensive coverage while preventing double taxation scenarios.

The QDMTT mechanism operates as Vietnam’s primary enforcement tool. When Vietnamese constituent entities meet effective tax rate thresholds, Vietnam collects domestic top-up tax rather than allowing foreign parent jurisdictions to impose IIR charges.

The IIR system applies when Vietnamese parent entities hold constituent entities in low-tax jurisdictions. Vietnam imposes top-up tax on foreign operations that fail to meet minimum tax rate requirements.

General provisions and core framework

Key Definitions and Scope:

• Constituent Entities: All entities included in consolidated financial statements of Ultimate Parent Entity (UPE)
• Ultimate Parent Entity: Holding company at apex of MNE group ownership structure
• Filing CE: Designated constituent entity responsible for group compliance obligations
• Revenue Threshold: EUR 750 million consolidated revenue in at least two of four preceding fiscal years

The consolidation methodology follows internationally accepted accounting standards. Vietnam recognizes both IFRS and Vietnamese GAAP for consolidation purposes, with specific adjustments for GloBE calculations.

Testing periods utilize rolling four-year averages for revenue threshold determination. This approach provides stability and prevents artificial threshold manipulation through temporary restructuring.

QDMTT and IIR systems operate through coordinated enforcement mechanisms. Priority rules ensure Vietnam collects appropriate top-up tax amounts while preventing excessive taxation of MNE groups.

Exclusion from QDMTT for MNEs in the initial phase

Vietnam provides transitional relief for qualifying MNEs during initial implementation:

Eligibility Criteria:

• New market entrants: MNEs establishing Vietnamese operations after January 1, 2025
• Limited operations: Constituent entities with Vietnamese revenue below EUR 10 million
• Investment phase: Capital-intensive projects during construction or development periods
• Specific sectors: Certain infrastructure, manufacturing, and technology investments

The initial exclusion phase typically spans five years from the commencement of Vietnamese operations. This period allows MNEs to establish operational substance and achieve economic scale before full GMT compliance.

Documentation requirements include business plans, investment commitments, and operational milestones. Vietnam monitors compliance through annual reporting and periodic reviews to ensure continued eligibility.

QDMTT safe harbor provisions

Safe harbor elections provide compliance simplification for qualifying MNEs:

Calculation Methodology:

• De minimis test: Constituent entities with revenue below EUR 10 million and profit below EUR 1 million
• Simplified ETR test: Entities meeting 15% effective tax rate through standardized calculation
• Transitional safe harbor: Temporary relief during initial three-year implementation period

Safe harbor elections require annual confirmation and supporting documentation. MNEs must demonstrate continued eligibility through financial statements, tax returns, and country-by-country reports.

The simplified calculation methodology reduces compliance costs while maintaining substantive GMT compliance. Vietnam coordinates safe harbor recognition with other qualified jurisdictions to prevent gaps or overlaps.

IIR Top-up tax ordering rule

Vietnam’s ordering rules establish clear priority sequences for top-up tax collection:

Priority Sequence:

1. QDMTT collection: Vietnam collects on Vietnamese constituent entities meeting jurisdiction-specific requirements
2. Primary IIR: Ultimate Parent Entity jurisdiction collects on all other low-tax operations
3. Secondary IIR: Intermediate holding companies collect remaining amounts through ownership chain
4. Undertaxed Profits Rule (UTPR): Remaining group members allocate uncollected amounts

The allocation methodology prevents double taxation while ensuring comprehensive coverage. Credit mechanisms offset amounts collected by multiple jurisdictions to maintain the 15% minimum effective tax rate objective.

Coordination procedures require information sharing between Vietnamese tax authorities and foreign counterparts. This collaboration ensures consistent application and prevents disputes over allocation responsibilities.

How Vietnam’s financial accounting standards are affected by Decree 236

Decree 236 introduces significant modifications to Vietnamese Generally Accepted Accounting Principles (GAAP) for GMT compliance. These changes ensure consistency between financial reporting and tax calculation methodologies.

The modifications primarily affect consolidation procedures, equity accounting methods, and foreign currency translation requirements. Vietnamese entities must implement GloBE-specific adjustments while maintaining compliance with existing accounting standards.

Modifications to Consolidated financial reporting

Key Accounting Changes:

• Equity method adjustments: Modified treatment of associated companies and joint ventures for GloBE inclusion
• Foreign currency standardization: Mandatory use of functional currency with specified translation methods
• Consolidation scope: Expanded inclusion criteria for investment entities and special purpose vehicles
• Timing adjustments: Alignment of recognition periods between financial and tax calculations

The equity accounting modifications require Vietnamese entities to recalculate investment income using GloBE-specific methodologies. This ensures consistent treatment across all constituent entities within MNE groups.

Foreign currency translation follows standardized rates and methodologies prescribed by OECD guidance. Vietnamese entities must maintain parallel calculations using both Vietnamese GAAP and GloBE requirements.

Consolidation scope adjustments particularly affect financial services and real estate investment groups. These sectors often utilize complex structures requiring careful analysis under expanded inclusion criteria.

QDMTT amount determination and Zero-tax scenarios

Zero-Tax Determination Circumstances:

• Loss positions: Net operating losses eliminate top-up tax liability for current period
• Carry-forward utilization: Prior period losses offset current year positive adjustments
• Safe harbor qualification: Entities meeting simplified ETR tests avoid detailed calculations
• De minimis thresholds: Small operations below materiality limits receive automatic relief

The treatment of losses requires careful tracking across multiple fiscal years. Vietnamese entities must maintain detailed records of loss origins, utilization patterns, and carry-forward availability.

Reconciliation with Country-by-Country Reporting data ensures consistency across all compliance obligations. Vietnamese tax authorities cross-reference QDMTT calculations against CbCR submissions to identify discrepancies.

Financial statement documentation and variance reconciliation

Mandatory Documentation Requirements:

• Calculation worksheets: Detailed supporting schedules for all GloBE adjustments and determinations
• Variance reconciliations: Explanations of differences between financial statement and tax calculations
• Supporting evidence: Source documents, contracts, and legal agreements substantiating positions
• Audit trails: Complete documentation chains enabling independent verification

The documentation requirements create comprehensive audit trails for Vietnamese tax authorities and external auditors. This transparency facilitates efficient examination procedures and reduces compliance disputes.

Quarterly reporting alignment ensures consistency throughout fiscal years. Vietnamese entities must maintain running calculations and periodic reconciliations to identify issues before final reporting deadlines.

Tax registration, filing procedures, and compliance requirements

Vietnam’s Global Minimum Tax requires multinational companies to follow detailed registration and filing rules, which include specific deadlines, necessary documents, and compliance steps within set administrative guidelines.

Notification on the appointment of Filing CE and In-Scope CEs

Form 01/TB-DVHT – Filing CE Appointment:

The Filing CE notification establishes the responsible entity for group-wide GMT compliance. This designation carries significant responsibilities and potential liabilities.

Required Information:

• Entity identification: Legal name, tax identification number, and registered address
• Authorization documentation: Board resolutions and power of attorney confirming appointment
• Contact information: Designated representatives and communication channels
• Effective dates: Commencement and expected duration of Filing CE responsibilities

Deadline: 30 days after fiscal year-end or 10 days after Filing CE appointment, whichever occurs first.

Form 02/TB-DVHT – In-Scope CE Identification:

This notification identifies all Vietnamese constituent entities within the MNE group subject to GMT obligations.

Required Details:

• Complete entity listings: All Vietnamese subsidiaries, branches, and permanent establishments
• Ownership structures: Percentage holdings and control relationships
• Business activities: Primary operations and revenue sources for each entity
• Financial information: Revenue, profit, and tax amounts for threshold testing

Late or incorrect notifications trigger automatic penalties and potential audit scrutiny. MNEs should establish robust internal procedures ensuring timely and accurate submissions.

Tax registration process and procedures

Form 01-DKTD-DVHT Registration Requirements:

Tax registration creates formal relationships between MNEs and Vietnamese tax authorities for GMT purposes.

Registration Components:

• Unique tax codes: Specialized GMT identification numbers separate from regular CIT codes
• Electronic system access: Credentials for online filing and payment platforms
• Representative designation: Authorized persons for tax authority communications
• Compliance history: Previous tax obligations and penalty status disclosures

Timeline: 90 days after fiscal year-end, with possible 30-day extensions for documented hardship cases.

The electronic submission system requires specific technical capabilities and security protocols. MNEs should coordinate with IT departments and service providers to ensure system compatibility and data security.

Tax filing and payment obligations

QDMTT Filing Requirements:

QDMTT returns must be submitted within 12 months after fiscal year-end. This timeline aligns with most jurisdictions’ IIR filing requirements to facilitate coordination.

Required Documentation:

• GloBE Information Return: Comprehensive group-wide financial and tax data
• Supplementary CIT Return: Vietnam-specific calculations and adjustments
• Supporting schedules: Detailed workings for effective tax rate determinations
• Documentation packages: Evidence supporting positions and elections

IIR Filing Requirements:

IIR returns have extended deadlines: 15 months after fiscal year-end (18 months for initial year). This additional time allows for coordination with foreign jurisdictions and comprehensive data gathering.

Payment Procedures:

Top-up tax payments are due with return filings unless alternative arrangements are approved. Vietnam accepts electronic payments through designated banking channels and government payment platforms.

Penalty Framework:

• Late filing: 20% of tax liability or minimum VND 40 million
• Late payment: 0.03% per day of outstanding amounts
• Inaccurate reporting: 10-30% of additional tax assessments plus interest
• Non-compliance: Suspension of investment incentives and business licenses