Before Pillar Two, group tax restructuring usually revolved around shifting profit to low-rate locations. Since Vietnam adopted the global minimum tax, the problem has changed fundamentally: for groups large enough, an effective rate below 15% in Vietnam is topped up to 15% right in Vietnam under the qualified domestic minimum top-up tax (QDMTT), so many “profit shifting” structures lose their point, and the optimisation levers move to what the GloBE framework still rewards — substance-based carve-outs, timing, and the structure of intra-group arrangements. This article analyses restructuring thinking under the new framework; two neighbouring topics — board deadlock when restructuring for Pillar Two, and restructuring when tax incentives expire — have their own articles on this site, cross-referenced here while this article keeps to tax design.
1. The applicable framework: Resolution 107/2023/QH15 and Decree 236/2025/ND-CP
Vietnam applies supplementary corporate income tax under the global anti-base erosion rules from fiscal year 2024 under Resolution 107/2023/QH15 (passed by the 15th National Assembly on 29 November 2023), detailed by Decree 236/2025/ND-CP (issued 29 August 2025, effective 15 October 2025). Under Article 3 of Decree 236/2025, taxpayers are constituent entities of a multinational group whose ultimate parent’s consolidated revenue is equivalent to EUR 750 million or more in at least two of the four fiscal years immediately preceding the year the obligation is determined. Two top-up mechanisms run in parallel: QDMTT — Vietnam itself collects the top-up on Vietnamese profits where the effective rate is below 15%; and IIR — a Vietnamese ultimate parent collects top-up on low-taxed profits of foreign constituent entities. Every restructuring design for an in-scope group must start from the GloBE effective rate in Vietnam, not the nominal rate or the incentive rate printed on the investment certificate.
2. Lever one that still works: the substance-based carve-out
The GloBE framework excludes from top-up-tax profit a portion of income corresponding to real activity in each country — computed from tangible asset values and payroll costs of employees in that country (the substance-based income exclusion). The restructuring consequence is the reverse of the old thinking: instead of withdrawing activity from Vietnam to chase incentives, the group gains by keeping and growing tangible assets and genuine headcount in Vietnam, because the excluded profit portion rises with those two factors. Decisions such as having the Vietnamese plant own its assets rather than leasing everything, moving technical staff onto the Vietnamese payroll, or consolidating real production into one Vietnamese entity must all be re-quantified under the GloBE formula before being taken. Decree 236/2025 also provides transitional relief mechanisms for the first fiscal years of application — a timing factor that makes the same structure produce different results depending on the year it is implemented.
3. Lever two: re-examining incentives and intra-group arrangements through the effective-rate lens
Traditional CIT incentives (exemptions, reductions, low rates) do not disappear, but their value changes: the benefit that pushes the Vietnamese effective rate below 15% is largely clawed back by QDMTT at group level, except the part protected by the substance carve-out. Sound restructuring therefore includes: recomputing the real post-QDMTT value of each incentive in course to decide whether to keep it, convert it into non-tax support (such as cost support through investment support fund mechanisms), or restructure the activity; and reviewing intra-group related-party arrangements — management fees, royalties, interest — because they are governed both by the transfer pricing framework in Decree 255/2026/ND-CP and by their effect on Vietnamese GloBE profit, which can raise or lower the top-up. A structure that was optimal pre-GloBE, such as concentrating profit in an incentivised trading company, can become a disadvantageous structure once QDMTT is computed correctly.
4. A disciplined restructuring process under Pillar Two
The process should run in four steps: (i) determine scope — consolidated revenue against the EUR 750 million threshold and the constituent entities in Vietnam; (ii) compute the Vietnamese GloBE effective rate for the current structure and at least two alternative structures, factoring the substance carve-out and transitional relief under Decree 236/2025; (iii) check the constraints outside the top-up — transfer pricing, contractor tax, investment incentive conditions, and the consequences in the parent’s country under its own IIR; and (iv) implement on a fiscal-year roadmap, because the same restructuring step has different value depending on which fiscal year it is in time for. Two things to avoid: restructuring based only on the destination country’s nominal rate without computing Vietnamese QDMTT, and copying the incentive-expiry playbook (the subject of the restructuring-after-incentives article on this site) into the Pillar Two problem — the two problems have different deciding variables.
This article has been quality-reviewed by the FLAW AI Legal Council