Tax & Legal updates - Quick update on Global Minimum Tax

In general, Vietnam's GMT regulations align with the OECD’s Global Anti-Base Erosion (GloBE) rules, also known as Pillar Two. These rules aim to address global tax evasion, tax avoidance, and profit shifting through the adoption of a global minimum tax rate of 15%. The framework’s implementation would significantly impact multinational enterprises (MNEs) with consolidated group revenue of EUR 750 million or more, and Constituent Entities (CEs) in Vietnam, especially those currently enjoying Corporate Income Tax (CIT) incentives. This impact would be seen in both tax obligations and compliance requirements.

It is critical to note that while the current CIT rate in Vietnam exceeds 15% (e.g., the standard CIT rate is 20%), this does not necessarily mean the Jurisdictional CEs’ Effective Tax Rate (ETR) for GMT purposes is above 15%. Therefore, GMT may still apply.

Download the full documents below to gain insights into the provisions.