In the context of globalization and increasingly fierce competition for investment, many multinational corporations have leveraged tax incentives in low-tax jurisdictions to reduce operating costs. To combat base erosion and profit shifting, the Organization for Economic Co-operation and Development (OECD) and the G20 economies have promoted the Global Minimum Tax (GMT) initiative.
Vietnam, as a country receiving a significant amount of Foreign Direct Investment (FDI) in the region, will officially implement the GMT policy from 2026. However, 2025 is a crucial transitional period for FDI enterprises and regulatory agencies to prepare policies, technical aspects, and strategies to adjust tax incentives in line with international practices.
The Global Minimum Tax system is built under Pillar 2 of the Base Erosion and Profit Shifting (BEPS) project initiated by the OECD. Accordingly, each country has the right to apply a global minimum tax rate of 15% to multinational corporations with consolidated global revenue of EUR 750 million or more.
If an investment country (such as Vietnam) applies an effective tax rate below 15%, the country where the group’s headquarters is located has the right to collect the difference. This means that low tax rate incentives – which have been Vietnam’s primary policy tool for attracting FDI – will no longer be as effective as before.
Vietnam is currently home to over 38,000 FDI projects from 143 countries and territories, with total accumulated registered capital reaching nearly USD 470 billion by the end of 2024. Many large corporations among them are currently enjoying Corporate Income Tax (CIT) incentives below 10% – a rate significantly lower than the 15% global minimum tax.
According to estimates by the Ministry of Finance, approximately 122 FDI enterprises operating in Vietnam will be directly affected by GMT. These include major names like Samsung, Intel, LG, Foxconn, and Panasonic, which have enjoyed preferential tax rates of about 5–10% for many years.
Allowing other countries to collect the additional tax will lead to a loss of budget revenue, estimated at VND 14,000–20,000 billion per year if Vietnam does not apply additional domestic taxes.
Furthermore, the risk of reduced attractiveness of the investment environment due to the absence of CIT incentives compels Vietnam to design alternative support mechanisms (such as direct subsidies, support for R&D costs, training, and infrastructure) to retain strategic investors.
To anticipate trends and proactively adapt, the Vietnamese Government approved the Global Minimum Tax Scheme at the end of 2023. Accordingly:
It is expected that in 2025, Vietnam will issue a separate law on Qualified Domestic Minimum Top-up Tax (QDMTT), effective from January 1, 2026, to ensure the right to tax the difference directly in Vietnam.
Develop a qualified refundable tax credits mechanism, mirroring models being implemented by countries like South Korea, Singapore, and Japan.
Review the entire incentive system in the Investment Law and CIT Law, aiming to shift from tax rate incentives to cost-based or investment efficiency-based support.
Upgrade data and information technology systems to support the calculation of Effective Tax Rate (ETR) and synchronize with the International Financial Reporting Standards (IFRS) accounting system – a necessary condition for GMT implementation.
In reality, many multinational corporations began assessing the impact of GMT in 2023 when countries like Germany, France, Japan, and South Korea officially enacted new tax laws. Subsidiary companies in Vietnam need to:
Calculate their Effective Tax Rate (ETR) in Vietnam according to OECD methodology to determine the additional tax difference that needs to be paid.
Standardize financial reporting systems according to IFRS, ensuring clear and transparent data.
Build documentation to prove the legitimate and reasonable use of incentives, and review transfer pricing risks.
Proactively work with tax authorities and international consulting experts to design appropriate long-term tax strategies.
Consider restructuring operations, investing in supported areas such as R&D, digital transformation, human resource training, etc., to leverage upcoming alternative support policies.
The implementation of the Global Minimum Tax is an irreversible trend, with over 140 countries already committed to adopting it under the OECD’s BEPS framework. For Vietnam, this is a major shift, not only in taxation but also in its approach to investment policies and business support.
2025 is a pivotal moment for both regulatory agencies and FDI enterprises to prepare in terms of legal frameworks, data, internal capabilities, and investment strategies. Delays during this period could cause Vietnam to lose opportunities to retain large corporations, as well as fail to leverage its right to impose domestic taxes on the shortfall.
Vietnam needs to turn challenges into opportunities, transforming its policy from “tax incentives” to “targeted support” to continue being an attractive, transparent, and sustainable destination for international investment flows in the post-GMT era.
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