The global minimum tax does not abolish Vietnam’s tax incentives; it converts the incentive into a top-up tax that some country will collect — and since 2024 Vietnam has chosen to collect its own share through the qualified domestic minimum top-up tax (QDMTT) under Resolution 107/2023/QH15. For holding structures the real question is not ‘are incentives lost’ but ‘where will the top-up be collected, by whom, and what role remains for a Singapore holding’.
Who is in scope: the EUR 750 million threshold and group structure
Resolution 107/2023/QH15 of the National Assembly applies the OECD global minimum tax to multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four immediately preceding fiscal years. Two mechanisms run in parallel: QDMTT collects top-up tax on Vietnamese constituent entities’ profit where the Vietnamese effective tax rate is below 15%, and the income inclusion rule (IIR) applies to Vietnamese ultimate parents investing abroad. Groups below the threshold are entirely outside the mechanism — the first point to confirm, because most FDI enterprises in Vietnam belong to groups that never touch the threshold and whose holding structures Pillar Two never reaches.
What advantage remains for a Singapore holding after Pillar Two
Singapore also operates a domestic minimum tax and an IIR for in-scope groups on the corresponding timeline, so a nominal rate gap between the two countries no longer converts into absolute savings for an in-scope group: any effective rate below 15% at one link is topped up at another link in the chain. The holding’s remaining advantages are real but non-rate in nature: pooling regional profits for reinvestment, treasury and financing management, investment protection, and items outside the GloBE scope such as treaty withholding outcomes on specific flows. In other words, Pillar Two strips the holding of its ‘low-rate shelter’ role but not its capital management hub role — structures built only for the first role will need redesign.
Are existing incentives partially clawed back
There is no retroactive clawback of incentives. What happens is this: corporate income tax incentives in Vietnam — preferential rates or holidays for priority projects — are still enjoyed under investment law, but where the Vietnamese effective tax rate of an in-scope entity falls below 15%, the difference is collected as top-up under QDMTT. The economic value of the incentive is therefore neutralized in part or in whole depending on the actual effective rate, although the incentive certificate does not change by one word. Projects negotiating new incentives should reprice them through a post-QDMTT lens and consider non-rate-based support — such as cost support under the investment support fund mechanism — instead of bargaining for extra rate points that mean nothing.
What the group must prepare
Pillar Two’s first burden is data, not cash: country-by-country data, effective tax rate computations on GloBE rules (far removed from book tax rates), and identifying which entity in the holding chain files and which pays the top-up. QDMTT and IIR filing and payment in Vietnam follow tax authority guidance for each tax period from fiscal year 2024. A group with a Vietnamese subsidiary should run an early effective-rate simulation, because the result decides whether incentives and internal flows need restructuring at all — doing this after the fiscal year closes is too late to change anything.
Frequently asked questions
1. Does the global minimum tax destroy the Singapore holding’s advantage?
For in-scope groups with consolidated revenue from EUR 750 million, the low-rate advantage is neutralized because the sub-15% portion is topped up somewhere in the chain. The holding’s capital management, financing and investment protection advantages remain intact; sub-threshold groups are unaffected.
2. Which companies must pay top-up tax in Vietnam?
Vietnamese constituent entities of in-scope groups whose Vietnamese effective tax rate is below 15% pay the difference through QDMTT under Resolution 107/2023/QH15, applying from fiscal year 2024. A Vietnamese ultimate parent investing abroad may also fall under the IIR.
3. Are current tax incentives partially recovered?
Not recovered retroactively and the incentive certificate is unchanged; but the incentive’s economic value is offset by top-up tax up to a 15% effective rate for in-scope groups. The deeper the incentive pushes the effective rate down, the larger the top-up.
4. What must the group prepare?
GloBE-basis effective tax rate data per jurisdiction, country-by-country reporting, identification of the filing and paying entity in the chain, and an early simulation within the fiscal year. The heaviest burden is the data system, not the payment procedure.
5. Are small and mid-sized FDI enterprises affected?
Not directly: below the EUR 750 million consolidated revenue threshold a group is outside Pillar Two. Indirect effects arise only where the enterprise supplies a large in-scope group and is asked to provide data.
This article has been quality-reviewed by the FLAW AI Legal Council
