GLOBAL MINIMUM TAX – CHALLENGE OR OPPORTUNITY FOR FDI ENTERPRISES IN VIETNAM?

The year 2025 marks a major turning point for multinational groups: the Global Minimum Tax (GMT) regime has officially been implemented by many countries, including Vietnam. With a minimum tax rate of 15% applicable to groups with consolidated revenues of EUR 750 million or more per year, GMT is fundamentally reshaping the “rules of the game” in international investment.

So how will GMT impact FDI enterprises in Vietnam? And what strategies should be adopted to adapt?

1. Why has the Global Minimum Tax become a hot issue?

For decades, corporate income tax (CIT) incentives have been a key “weapon” for Vietnam in attracting foreign direct investment. Policies such as four years of tax exemption, nine years of tax reduction, or the application of a preferential CIT rate of 10% for 15 years have provided strong motivation for technology and manufacturing groups to establish factories in Vietnam.

However, once GMT is applied:

• If a company in Vietnam is subject to an effective CIT rate of only 5% due to incentives, the foreign parent company will have to pay an additional 10% to reach the 15% minimum rate.
• This means that tax incentives in Vietnam will no longer have absolute value, and FDI enterprises may no longer view them as a comparative advantage.

This creates significant pressure on Vietnam’s investment attraction strategy and forces enterprises to restructure their operations to maintain efficiency.

2. Practical impacts on FDI enterprises

a. Narrowing of tax advantages
FDI enterprises will need to reassess the “real value” of tax incentives. Investment decisions in Vietnam will no longer be based on low tax costs alone, but must be linked to other factors such as supply chains, labor, infrastructure, and market access.

b. Increased compliance costs
Groups will be required to prepare GMT tax calculations and reports in accordance with OECD standards, while Vietnam’s accounting and tax systems are still in the process of aligning with these standards. As a result, audit, advisory, and risk management costs are expected to increase.

c. Risk of cross-border disputes
Differences in tax calculation methods, deductible expenses, or the determination of taxable profits between Vietnam and other jurisdictions may lead to international tax disputes—an area that is inherently complex and costly.

d. Investment restructuring
Some groups may reconsider profit allocation, transfer pricing policies, or legal entity structures in Vietnam. This will affect long-term strategies and may trigger a wave of investment adjustments.

3. What should enterprises do immediately in 2025?

To avoid being caught unprepared for GMT, FDI enterprises in Vietnam should:

1.      Review existing tax incentives: Assess whether current incentives still provide real benefits after the application of GMT.

2.      Evaluate top-up tax obligations: Calculate potential additional tax liabilities that may arise in the parent company’s home jurisdiction.

3.      Restructure the value chain: Consider reallocating profits, costs, or investment models to optimize overall efficiency.

4.      Enhance reporting transparency: Prepare accounting and tax systems in line with international standards to reduce the risk of disputes.

5.      Seek in-depth legal and tax advice: This is not merely a financial issue, but one that is closely linked to international law, contracts, and investment strategy.

4. The role of legal advisory in the new landscape

At Celigal Law Firm LLC, we view GMT not only as a challenge, but also as an opportunity for enterprises to restructure their investments in a more sustainable manner.

With extensive experience accompanying multinational groups in Vietnam, we provide:

• Assessment of GMT impacts on specific business models;
• Advisory on investment and financial restructuring to mitigate risks and optimize benefits;
• Review and drafting of contracts and joint venture agreements in line with GMT requirements;
• Representation of enterprises in international tax disputes or in dealings with regulatory authorities.

Conclusion

The Global Minimum Tax will reshape international investment flows and the business strategies of multinational groups over the coming decade. For FDI enterprises in Vietnam, taking action in 2025 is the key not only to compliance, but also to turning challenges into competitive advantages.

Celigal stands ready to accompany enterprises on this journey—from risk analysis and solution design to the implementation of comprehensive legal and tax strategies.

Do not wait until you are forced to react—start preparing today.