On 29 August 2025, the Government of Vietnam issued Decree No. 236/2025/ND-CP (Decree), providing detailed guidance for implementing some articles of Resolution No.107/2023/QH15, dated 29 November 2023, on top-up Corporate Income Tax (CIT).

Release of the Decree follows the release of a draft Decree in November 2024. (For details, see EY Global Tax Alert, Vietnam releases Draft Decree guiding implementation of top-up Corporate Income Tax, dated 20 November 2024).

Applicability

The rules subjecting taxpayers to top-up CIT are in line with the Global Anti-Base Erosion (GloBE) Model Rules. The Decree provides some special considerations:

• Qualified Domestic Minimum Top-up Tax (QDMTT) does not apply to stateless constituent entities or stateless permanent establishments (PEs).
• QDMTT applies to Joint Ventures (JVs), JV Groups and Minority-Owned Constituent Entities (MOCEs).
• QDMTT shall be reduced to zero during the initial phase of a multinational enterprise (MNE) group's international activity if certain conditions are met.

The Decree provides guidance on how to determine whether a taxpayer meets the revenue threshold of €750m or more based on the Ultimate Parent Entity's (UPE's) consolidated revenue for certain cases.

Safe harbor rules

Safe harbor rules are provided to reduce unnecessary compliance obligations and administrative burdens for both MNE groups and tax authorities. These rules allow an MNE group to avoid calculating the effective tax rate (ETR) and top-up tax for operations that are likely already taxed at or above the minimum rate, while also enhancing tax certainty and transparency.

Safe harbor during the initial phase of international activity

The QDMTT shall be reduced to zero in the initial phase of an MNE group's international activity. An MNE group is considered to be in the initial phase of its international activity if, for the fiscal year (FY) of the tax liability determination, it meets both of the following conditions:

• The MNE group has Constituent Entities (CEs) in no more than six jurisdictions during any time in the FY of tax liability determination.
• The sum of net book values of tangible assets of all CEs located in all jurisdictions other than the reference jurisdiction does not exceed €50m.

Net book value of tangible assets means the average of the beginning and end values of tangible assets as recorded in the financial statement of each CE, after taking into account accumulated depreciation, depletion and impairment.

The reference jurisdiction of an MNE group is the jurisdiction in which the MNE group has the highest total value of tangible assets for the FY in which the MNE group originally comes within the scope of the GloBE Rules.

Transitional country-by-country reporting (CbCR) safe harbor

A transitional period applies to fiscal years beginning on or before 31 December 2026 but not including fiscal years ending after 30 June 2028.

The amount of top-up tax in a jurisdiction for a fiscal year will be considered zero (nil) when one of the following criteria is met:

• In the fiscal year, the MNE group has a qualified country-by-country (CbC) report reflecting total revenues less than €10m and pre-tax profit less than €1m or incurs losses in that jurisdiction.
• In the fiscal year, the MNE group has a simplified effective tax rate (ETR) in the jurisdiction equivalent to at least 15% for 2023 and 2024, 16% for 2025 and 17% for 2026.
• The MNE group's profit before income tax in the jurisdiction is equal to or less than the Substance-Based Income Exclusion calculated under GloBE Rules with respect to the CEs resident in that jurisdiction according to the CbC report.

The Decree also provides guidance on Qualified CbCR, Qualified Financial Statements (FSs) and Application of the CbCR Safe Harbor to joint ventures and their subsidiaries, which is aligned with the Pillar Two rules.

During the transitional period, no administrative tax penalties will be applied for certain violations.

If an MNE group does not apply the transitional safe harbor for a jurisdiction in a financial year in which it is subject to the GloBE Rules, the group cannot qualify for the safe harbor for that jurisdiction in the following year — unless the group does not apply the transitional safe harbor in that financial year because it had no CEs located in the jurisdiction at that time.

QDMTT Safe Harbor

If a jurisdiction's QDMTT meets the conditions for the QDMTT Safe Harbor as per the list announced by Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on BEPS, the top-up tax for that jurisdiction will be deemed to be zero.

If a jurisdiction's QDMTT meets the conditions for the QDMTT Safe Harbor, but either the MNE group is not within the scope of the QDMTT in that jurisdiction or the local tax authority fails to collect the QDMTT from the CEs located there, the group is not entitled to apply the QDMTT Safe Harbor in Vietnam.

Permanent safe harbor

If an MNE does not meet the conditions of a transitional safe harbor, it may still qualify for the conditions of a permanent safe harbor. When permanent safe harbor conditions are met, the application of simplified calculations would provide for the same final outcomes as those provided under a full application of the GloBE Rules or would not otherwise undermine the integrity of the GloBE Rules.

The Decree provides specific guidance on safe harbors that are available if a CE is considered immaterial.

Aside from providing a simplified calculation method for non-material CEs, the Decree does not yet provide detailed guidance on the simplified calculation method for determining the satisfaction of these conditions for other CEs.

QDMTT accounting standard and fiscal year

GloBE Net Income or Loss for a CE is the net income or loss determined for the CE in preparing the UPE's Consolidated Financial Statements.

If the Financial Accounting Net Income or Loss for a CE cannot be determined based on the UPE's accounting standard, it must be calculated using Acceptable or Authorized Financial Accounting Standard, provided that certain conditions are met.

The Authorized Financial Accounting Standard is a set of generally acceptable accounting principles permitted by an Authorized Accounting Body in the jurisdiction where that CE is located and includes the Acceptable Financial Accounting Standard or another Financial Accounting Standard that is adjusted to prevent Material Competitive Distortions. The Decree provides the definition for Material Competitive Distortions.

The fiscal year for a QDMTT determination is the UPE's fiscal year.

Currency for tax filing and payment

GloBE Income or Loss must be determined in the presentation currency of the UPE's Consolidated FSs. The MNE group must apply the standards on the effect of changes in foreign exchange rates, as stipulated in the UPE's financial accounting standards, to make all necessary translations into the UPE's presentation currency.

The GloBE Information Return and Explanation of discrepancies due to differences in accounting standards must be declared in the presentation currency of the UPE's Consolidated FSs.

The Top-up Tax Declaration Form must be declared in Vietnamese Dongs (VND) if the presentation currency of the UPE's Consolidated FSs is VND. If the presentation currency is not VND, the declaration may be made either in VND or in the UPE's currency. The applicable exchange rate is the average of the telegraphic buying and selling rates quoted by the commercial bank where the CE regularly conducts transactions, as of the date the tax return is filed.

Reporting and compliance

The Decree provides detailed guidance on the calculation of top-up tax, including the determination of GloBE Income or Loss under the GloBE Rules, computation of adjusted covered taxes, Substance-Based Income Exclusion in accordance with the OECD rules. In addition, the Decree sets out all the forms to be used for compliance purposes.

Effectiveness

The Decree takes effect from 15 October 2025 and applies for fiscal year 2024 onward. Fiscal year 2024 is the fiscal year beginning on and after 1 January 2024. If the UPE's fiscal year commences in December 2023, that fiscal year is also in scope of the Decree.

Implications

In-scope MNEs should be aware of, and well-prepared to comply with, the Decree's requirements. Additionally, MNE groups should assess applicability of the safe harbors to reduce unnecessary compliance obligations and administrative burdens.