Key takeaways

The structure of Decree No. 236 is organized into four parts, as follows:

• Part 1: Application principles, safe harbor and tax administration — covering principles of application (order and circumstances of application), the determination of top-up tax under the qualified domestic minimum top-up tax (QDMTT) and the Income Inclusion Rule (IIR), as well as specific provisions on safe harbor and tax administration
• Part 2: Terminology — defining the terms used in the Global Anti-Base Erosion (GloBE) Model Rules as referenced under Resolution No. 107/2023/QH15 and Decree No. 236, set out in Appendix I of the decree
• Part 3: Detailed calculation — prescribing detailed methods for determining the factors used to calculate the top-up tax under the QDMTT and the IIR, as provided in Appendix II of the decree
• Part 4: Tax forms — providing forms for notification, tax registration, tax declaration and explanatory statements, as set out in Appendix III of the decree

In more detail

Part 1: Application principles, safe harbor and tax administration

• In general, Decree No. 236 follows and aligns with the guidance of the Organisation for Economic Co-operation and Development (OECD)/Group of 20 (G20) Base Erosion and Profit Shifting (BEPS) Project regarding the implementation of Pillar Two/GMT.
• Part 1 of the decree is divided into three main sections, covering (i) the principles for applying the IIR and QDMTT (order of application, applicable and non-applicable cases), (ii) relief measures and safe harbor when applying the GMT in Vietnam, and (iii) tax administration.
• The decree provides four safe harbor and relief measures, including the following:
  • Exclusion from QDMTT for multinational enterprise (MNE) groups in the initial phase of international investment activities (Article 9): The top-up tax under the QDMTT of an MNE group will be deemed zero if the group is in the early stage of conducting international investment activities and simultaneously meets both conditions regarding (i) the maximum number of countries where its constituent entities are established and (ii) the maximum aggregate net book value of tangible assets.
  • Relief for QDMTT paid (Article 10): The top-up tax in Vietnam will be deemed zero if such tax has already been paid in another country under a QDMTT mechanism.
  • Transitional country-by-country report (CbCR) safe harbor and penalty relief (Article 11): Top-up tax in Vietnam will be deemed zero during the transitional period if the MNE group qualifies under one of four categories: (i) de minimis test; (ii) simplified effective tax rate test; (iii) routine profits test; or (iv) reporting a loss under a qualified CbCR. In addition, penalty reliefs also apply during the transitional period.
  • Permanent safe harbor (Article 12): Top-up tax for a country will be deemed zero if it satisfies one of three criteria: routine profits test; de minimis test; or effective tax rate test.
• Decree No. 236 also prescribes requirements on filing, payment and administration of the GMT in Vietnam, specifically the following:
  • Submission of the notice on the Vietnamese filing constituent entity and in-scope constituent entities: within 30 days from the end of a fiscal year
  • Initial tax registration: within 90 days from the end of the fiscal year, or within 90 days from 15 October 2025 if the 2024 fiscal year ends on or before 30 June 2025 (but no later than the deadline for tax filing and payment)

Part 2: Terminology

• Decree No. 236 provides definitions of the terms used under both Decree No. 236 and Resolution No. 107/2023/QH15. These definitions are translated from the terms set out in Article 10 of the GloBE Model Rules (Pillar Two) issued under the OECD/G20 BEPS Project.

Part 3: Detailed calculation

• Appendix II of Decree No. 236 guides the determination of the place of residence of a constituent entity, as well as the factors required for calculating the IIR, QDMTT and safe harbors. These provisions are transposed and adapted from Sections 3 to 9 of the GloBE Model Rules (Pillar Two).

Part 4: Tax forms

• Decree No. 236 provides the necessary forms for tax registration, tax declaration and notification relating to the calculation and filing of QDMTT and IIR in Vietnam. These forms include the following:
  • Notice of the Vietnamese filing constituent entity and in-scope constituent entities
  • Notice of the designated Vietnamese filing constituent entity and in-scope constituent entities
  • Notice that a constituent entity has filed the information return under the Multilateral Competent Authority Agreement CbCR
  • Tax code notification
  • Tax code registration/amendment form
  • Top-up tax return for QDMTT and top-up tax return for IIR
  • Explanation report for accounting standard differences
  • Information return for QDMTT and information return for IIR

Decree No. 236 will take effect from 15 October 2025 and will apply from fiscal year 2024. For this purpose, fiscal year 2024 is defined as a fiscal year commencing on or after 1 January 2024.

In cases where a constituent entity applying the QDMTT determines its fiscal year 2024 in line with the ultimate parent entity's fiscal year, and that fiscal year commences in December 2023, it will still be deemed fiscal year 2024 under Decree No. 236.