DECREE 236/2025/ND-CP: GUIDELINES ON IDENTIFYING APPLICABLE ENTITIES, EXEMPTED ENTITIES, AND CONDITIONS FOR REDUCTION OR EXEMPTION FROM PAYING QUALIFIED DOMESTIC MINIMUM TOP-UP TAX (QDMTT)

DECREE 236/2025/ND-CP: GUIDELINES ON IDENTIFYING APPLICABLE ENTITIES, EXEMPTED ENTITIES, AND CONDITIONS FOR REDUCTION OR EXEMPTION FROM PAYING QUALIFIED DOMESTIC MINIMUM TOP-UP TAX (QDMTT)

2025-09-08 10:47:18 1143

On November 29, 2023, the National Assembly passed Resolution No. 107/2023/QH15 (“Resolution 107”) on the application of supplementary corporate income tax (“CIT”) under the Global Anti-Base Erosion Rules ("QDMTT”). Accordingly, ATA Legal Services previously issued a legal update noting that from 01/01/2024, multinational enterprises may have to pay supplementary corporate income tax if they are enjoying an effective tax rate below 15% in another country, specifying the applicable entities, the supplementary CIT rate, and the method of determining QDMTT (those interested may view at the following link: https://ata-legal.com/from-january-1-2024-multinational-companies-are-required-to-pay-additional-corporate-income-tax-if-they-are-enjoying-a-tax-rate-below-15).

On August 29, 2025, the Government promulgated Decree No. 236/2025/ND-CP (“Decree 236”) detailing several articles of Resolution 107. Basically, Decree 236 provides specific guidance on the implementation of Resolution 107 in practice. Here, ATA Legal Services updates issues related to applicable entities, excluded entities, and cases of reduction of QDMTT obligations for businesses to note.

1. Guidelines on determining taxpayers of supplementary corporate income tax under the global anti-base erosion rules

Decree 236 stipulates the scope of taxpayers based on Resolution 107 and further clarifies as follows:

a. Taxpayers are constituent entities of multinational enterprise groups whose consolidated revenue of the ultimate parent company is at least EUR 750 million in at least 2 of the 4 fiscal years immediately preceding the fiscal year in which the tax obligation is determined, excluding excluded entities.

b. In case a multinational enterprise group has been established for less than 4 years before the fiscal year in which the tax obligation is determined, if at least 2 years have consolidated revenue of the ultimate parent company equivalent to EUR 750 million or more, its constituent entities shall be taxpayers.

c. Revenue equivalent to EUR 750 million or more is determined based on the consolidated revenue of the ultimate parent company in specific cases as follows:

  • Where one or more fiscal years of the multinational enterprise group has a duration other than 12 months, for each such fiscal year the threshold of EUR 750 million shall be determined in proportion to the number of days of that fiscal year divided by 365 days.

  • In case of spin-off, merger or consolidation in any fiscal year of the 4 fiscal years preceding the fiscal year of determination of the tax obligation, the consolidated revenue of the ultimate parent company shall be determined according to the agreement among the entities/groups.

2. Guidelines on determining excluded entities

Decree 236 guides the determination of excluded entities as prescribed at point g clause 1 Article 2 of Resolution 107 (organizations with at least 85% of asset value owned directly or indirectly through organizations excluded under points a to e Article 2 of Resolution 107 (hereinafter collectively referred to as “Other Excluded Organizations”)), specifically as follows:

a. An entity directly or indirectly held by one or more Other Excluded Organizations owning at least 95% of its value and operating mainly to support the Other Excluded Organizations, specifically:

  • Operating solely or mainly for the purpose of holding assets or investing capital for the benefit of the Other Excluded Organizations; and/or

  • Only performing ancillary activities for the activities of the Other Excluded Organizations or for third parties owned by the Other Excluded Organizations (at least 95% of the entity’s value);

b. An entity directly or indirectly held by one or more Other Excluded Organizations with at least 85% of its value provided that most of its income is excluded dividends or excluded equity gains/losses when calculating income or loss.

3. Detailed regulations on cases of reduction of tax obligations

Decree 236 provides guidance on reduction of QDMTT obligations in some specific cases as follows:

a. Reduction in the initial stage of international investment

QDMTT in Vietnam shall be determined as zero (0) in the initial stage of international investment of the multinational enterprise group – being the period satisfying simultaneously 2 conditions as follows:

  • That multinational enterprise group has constituent entities in no more than 6 countries at any time during the fiscal year of determination of the tax obligation;

  • The total carrying value of tangible assets of all constituent entities in all countries other than the reference country does not exceed EUR 50 million.

b. Reduction where QDMTT has already been implemented

Where QDMTT in a country satisfies the conditions for reduction on account of having already implemented QDMTT as published by the OECD Inclusive Framework, the supplementary tax in that country under Vietnam’s regulations shall be determined as zero (0).

Where QDMTT in a country satisfies the conditions for reduction but the multinational enterprise is not subject to QDMTT in that country or the tax authority in that country does not collect QDMTT for the constituent entities therein, the multinational enterprise shall not be entitled to such reduction.

c. Reduction during the transitional period

  • May apply supplementary tax rate of zero:

Resolution 107 provides: the transitional period is from 01/01/2024, applying for fiscal year 2024 until the end of fiscal year 2032. During this period, taxpayers may be entitled to reduction and application of supplementary CIT of zero if they meet one of the criteria on profit, revenue/minimum income, and effective tax rate.

Decree 236 adds guidance on cases where reduction is not applicable:

  • Constituent entities being one or more constituent entities resident in Vietnam shall not apply reduction (not entitled to supplementary tax of zero);

  • The choice of applying reduction in a country shall not apply when: (i) Vietnam may be allocated supplementary tax where the effective tax rate in the country applying reduction is lower than the minimum tax rate; (ii) The Vietnamese tax authority has notified the constituent entity of tax obligations within 36 months after filing the QDMTT information return of events and circumstances that may materially affect the reduction eligibility of constituent entities resident in such country and requested clarification within 6 months; and (iii) The taxpayer fails to prove within the permitted response period that such events and circumstances did not materially affect the reduction eligibility of constituent entities.

  • No administrative tax penalties:

Resolution 107 provides no administrative tax penalties shall be imposed on violations regarding declaration and filing of the information return under the global minimum tax rules and the supplementary CIT return accompanied by explanatory notes for differences due to accounting standards.

Decree 236 specifies no administrative penalties shall apply to the following:

  • Late notification or failure to submit notification as required;

  • Late tax registration within 90 days from the prescribed deadline;

  • Late notification of changes in tax registration contents not affecting the tax registration certificate or tax code notice;

  • Late notification of changes in tax registration contents within 90 days from the prescribed deadline affecting the tax registration certificate or tax code notice;

  • Incorrect or incomplete declaration in tax dossiers not leading to tax shortfall or increase of exempted, reduced, refunded tax;

  • Late submission of tax returns within 90 days from the deadline; submission more than 91 days late without payable tax arising;

  • Late submission of tax returns more than 91 days with payable tax arising, but the taxpayer has fully paid tax and late payment before the tax authority issues inspection decision or before the tax authority records the late filing;

  • Incorrect declaration of tax bases or deductible tax or wrong determination of exempted, reduced, refunded tax leading to tax shortfall or increase of exempted, reduced, refunded tax but economic transactions have been fully recorded in accounting books, invoices, lawful documents, and the taxpayer has voluntarily paid tax shortfall and late payment before a sanction decision is issued.

Decree 236 takes effect from 15/10/2025 and applies from fiscal year 2024.

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