New Tax Policies Reshaping M&A Deal Valuation in Vietnam: 5 Points Investors Must Update
From 01/10/2025, Corporate Income Tax Law No. 67/2025/QH15 officially took effect, replacing the CIT framework applied for the past 17 years. At the same time, the global minimum tax under Resolution 107/2023/QH15 has applied since fiscal year 2024, and Resolution 43/2026/QH16 has just cut CIT payable by 30% for small enterprises in 2026–2027. These three policy layers are directly changing the input assumptions of valuation models in Vietnamese M&A deals: future tax rates, the target's effective rate, the value of tax incentives, and even deal structures.
This article analyzes 5 specific impacts on M&A deal valuation, with a tax due diligence checklist so investors can adjust models in time. Note: the article approaches from the angle of how new policies affect valuation inputs; the tax-rate and filing mechanics of capital transfers and FDI project transfers are covered separately in the dedicated article on FDI capital-transfer taxation.
Why deals must be re-valued after Law 67/2025
In M&A valuation, corporate income tax is not just a cost line in this year's financial statements, but a flow affecting the entire forecast free cash flow in a DCF model, after-tax profit in multiple methods, and the net value the buyer actually receives after the transaction. When the tax framework changes, three things change with it:
First, the target's future tax rate. If the old model defaulted to 20% for the whole forecast period, then from tax year 2025, enterprises with prior-year revenue below VND 3 billion apply 15%, and above VND 3 billion up to VND 50 billion apply 17% under Article 10 of Law 67/2025/QH15. A growing SME target may "jump brackets" mid-forecast, changing after-tax cash flows the old model never captured.
Second, the value of tax incentives. Preferential rates and tax holidays/exemptions are an intangible part of the target's value, especially in deals where the seller priced a project with incentives. The new law redesigns the incentive system (Articles 13, 14, 15) and allows choosing a transitional regime (Article 20), so incentive value must be recalculated — it cannot be inherited from the old valuation file.
Third, tax risks reducing transaction value. The global minimum tax can "neutralize" the target's tax incentives when the buyer is a large multinational group; the temporary two-year tax cut for 2026–2027 can inflate short-term cash flows if the valuer extrapolates permanently. Both are valuation adjustments the investment committee must see clearly before locking the price.
5 new tax changes directly affecting M&A deal valuation
1. Tiered rates of 15% – 17% – 20% by revenue (Article 10 of Law 67/2025/QH15)
Why it matters: valuation models usually apply one constant rate across a 5–10 year forecast. With the new tiered rates, the target's effective rate depends on the immediately preceding year's revenue — meaning the revenue growth scenario in the model drags the tax rate along.
How to apply: when building or reviewing a DCF for an SME target, tie the forecast rate to each revenue scenario: below VND 3 billion → 15%, above VND 3 billion to VND 50 billion → 17%, above VND 50 billion → 20%. For targets near the thresholds (revenue around VND 3 or 50 billion), run sensitivity analysis on both brackets so the investment committee sees the value range. One important exception when valuing a subsidiary target: under Article 18(4) of Law 67/2025/QH15, the 15% and 17% rates do not apply to enterprises that are subsidiaries or have affiliated relationships where the affiliated enterprise does not meet the qualifying conditions — for such targets the model must use the 20% rate instead of the revenue-tiered rates.
Basis: Article 10 of Corporate Income Tax Law No. 67/2025/QH15; reference revenue is the total revenue of the immediately preceding tax year, detailed under Government rules in Decree 320/2025/ND-CP; Article 18(4) on the subsidiary/affiliate exclusion.
2. The redesigned tax incentive system (Articles 13, 14, 15 of Law 67/2025/QH15)
Why it matters: many Vietnamese M&A deals price above market precisely because the target enjoys preferential rates or tax holidays/reductions. The new law extends incentives to innovation, digital transformation and green energy, but conditions and scope differ from the old framework.
How to apply: in tax due diligence, require the target to provide complete dossiers proving incentive eligibility under the new framework, checked against Circular 20/2026/TT-BTC on incentive procedures and dossiers. If the target only meets old-law conditions but not new-law ones, the rate differential must be deducted from valuation as a contingent tax liability. Conversely, a target in newly incentivized sectors may have tax "upside" not yet reflected in the asking price.
Basis: Articles 13, 14, 15 of Law 67/2025/QH15; Circular 20/2026/TT-BTC effective 12/3/2026 on incentive procedures and dossiers.
3. The right to choose the incentive regime during transition (Article 20 of Law 67/2025/QH15)
Why it matters: this can create the largest value dispute in negotiations. Enterprises with incentivized investment projects may choose: continue under the law at licensing time, or switch to the new law for the remaining period. The two choices can produce two different effective rates for years ahead — i.e. two different valuations.
How to apply: make written verification of the target's regime choice a mandatory DD checklist item (internal decision, registration document with the tax authority if any). In the sale agreement, include representations on tax-incentive status and a price-adjustment mechanism if the tax authority redetermines the regime after closing. This should also be independently reviewed by tax counsel, not based solely on the seller's confirmation.
Basis: Article 20 of Law 67/2025/QH15 on transitional provisions.
4. The global minimum tax can "neutralize" the target's tax incentives (Resolution 107/2023/QH15)
Why it matters: if the buyer is a constituent entity of a multinational group with consolidated revenue of EUR 750 million or more, the qualified domestic minimum top-up tax (QDMTT) collects the shortfall up to the 15% minimum rate when Vietnam's effective rate is lower. In other words, incentives giving the target a 10% rate may lose economic meaning in the hands of a large group, as the savings are clawed back as top-up tax.
How to apply: before valuing, determine whether the buyer falls within Resolution 107/2023/QH15's scope. If so, the model must use the effective rate after top-up (minimum 15% per the Resolution's calculation), not the target's nominal preferential rate. This differential is often large enough to change the bid price, especially in deals where tax incentives are a significant share of enterprise value.
Basis: Resolution 107/2023/QH15, effective 01/01/2024, applied from fiscal year 2024; Article 4 on the qualified domestic minimum top-up tax (QDMTT), 15% minimum rate.
5. 30% CIT cut in 2026–2027: temporary, not to be extrapolated (Resolution 43/2026/QH16)
Why it matters: enterprises with 2026 or 2027 revenue not exceeding VND 10 billion get a 30% reduction of CIT payable each year. In a DCF, these two years may show abnormally high after-tax cash flows. If the valuer accidentally extends this low rate across the forecast period, enterprise value will be inflated.
How to apply: separate the two-year tax cut's effect from normal operating cash flows in the model; apply the reduction only to tax years 2026 and 2027 and only for enterprises with annual revenue not exceeding VND 10 billion. Note the reduction applies to tax payable after deducting incentives, and excludes enterprises formed by split or spin-off after the Resolution's effective date where total revenue exceeds the threshold.
Basis: Resolution 43/2026/QH16, effective 24/8/2026, applied to tax years 2026 and 2027.
Tax due diligence checklist for valuing M&A deals under the new legal framework
Each item states why to check, how to check, and the corresponding legal basis. Deal teams should complete this checklist before locking the final valuation model.
1. Determine the applicable rate for each forecast year. Because the new rates depend on the immediately preceding year's revenue, build a year-by-year rate table for the forecast period instead of one fixed number. How: take forecast revenue each year, check the VND 3 billion and VND 50 billion thresholds, assign 15%, 17% or 20% accordingly. Basis: Article 10 of Law 67/2025/QH15.
2. Review all tax incentives the target enjoys. Because the incentive system was redesigned, old incentives do not automatically retain value. How: collect the investment certificate, incentive confirmation documents, recent tax returns; check eligibility under Articles 13, 14, 15 of Law 67/2025/QH15 and dossiers under Circular 20/2026/TT-BTC.
3. Verify the target's transitional regime choice. Because Article 20 allows choosing between old and new regimes, remaining incentive value depends on this choice. How: require written evidence of the target's choice; if no formal choice exists, the model must run both scenarios and bring the range into price negotiation.
4. Assess global minimum tax impact on the buyer. Because QDMTT can eliminate incentive benefits, buyers in large multinational groups must value on the effective rate after top-up. How: determine whether the buyer's group consolidated revenue exceeds EUR 750 million; if so, adjust the model's rate to at least 15% per Article 4 of Resolution 107/2023/QH15.
5. Separate the temporary tax cut from long-term cash flows. Because the 30% reduction applies only to 2026–2027, do not extrapolate. How: present a separate "tax saving from Resolution 43/2026" line in the model; check the annual VND 10 billion revenue condition and exclude post-24/8/2026 split/spin-off cases. Basis: Resolution 43/2026/QH16.
6. Check the transaction's own capital-transfer tax obligation. Because the seller's after-tax net proceeds affect price structure and payment mechanics, the transaction's tax cost should be computed in advance. Detailed rates and filing are covered in the dedicated article on FDI capital-transfer taxation; for valuation purposes, ensure the model reflects transaction tax costs on the appropriate side.
Frequently asked questions
When did Law 67/2025/QH15 take effect and what did it replace?
Short answer: Effective 01/10/2025 and applied from tax year 2025, replacing Corporate Income Tax Law No. 14/2008/QH12 and its amendments.
Explanation: This is the first comprehensive CIT reform in 17 years, with three major change groups: revenue-tiered rates, a redesigned incentive system, and transitional rules for projects enjoying incentives. Accompanying guidance includes Decree 320/2025/ND-CP and Circular 20/2026/TT-BTC.
Legal basis: Article 19 of Law 67/2025/QH15 on entry into force.
Recommendation: all valuation models built before October 2025 should have their rate assumptions reviewed; sale agreements under negotiation should add clauses on tax policy changes.
Can an SME target enjoy the 15% rate?
Short answer: Yes, if total annual revenue does not exceed VND 3 billion (15%); revenue above VND 3 billion up to VND 50 billion is taxed at 17%.
Explanation: The new feature of Law 67/2025 is revenue-tiered rates instead of the previous flat 20%. However, the reference revenue is the total revenue of the immediately preceding tax year, not the current year's forecast, so enterprises must review finalized prior-year figures. Exception: a target that is a subsidiary or has affiliated relationships where the affiliated enterprise does not meet the conditions cannot apply the 15%/17% rates (Article 18(4)), even if the target's own revenue is below the thresholds.
Legal basis: Article 10 of Law 67/2025/QH15; total revenue determination follows Government rules in Decree 320/2025/ND-CP.
Recommendation: when valuing SME targets, do not default to 20% for the whole forecast; tie the rate to the revenue scenario and run sensitivity analysis at the VND 3 billion and VND 50 billion thresholds.
Do the target's tax incentives retain full value after Law 67/2025?
Short answer: Not necessarily. Enterprises enjoying incentives may choose to continue under the old regime or switch to the new one for the remaining period, so incentive value depends on that choice and each project's conditions.
Explanation: Article 20 of Law 67/2025/QH15 is a flexible transitional provision but also creates valuation uncertainty: the two choices can produce two different effective rates for years. If the target has no formal written choice, buyers should value on the more conservative scenario.
Legal basis: Article 20 of Law 67/2025/QH15.
Recommendation: make verification of the incentive-regime choice a mandatory DD checklist item and include tax-incentive representations in the sale agreement.
What should multinational groups buying Vietnamese companies with tax incentives note?
Short answer: Consider the top-up tax under the global minimum tax: if the effective rate in Vietnam is below 15%, the shortfall may be collected back, reducing the economic value of the tax incentives.
Explanation: Resolution 107/2023/QH15 applies to constituent entities of multinational groups with consolidated revenue of EUR 750 million or more. The QDMTT rule collects the difference between the 15% minimum rate and Vietnam's effective rate. A target enjoying a preferential 10% rate may thus face a significantly higher total tax burden in the hands of a large group.
Legal basis: Resolution 107/2023/QH15, effective 01/01/2024; Article 4 on QDMTT.
Recommendation: determine early whether the buyer falls in scope and adjust the model's rate before bidding; seek advice from tax counsel versed in global minimum tax rules.
Does the 30% CIT reduction in 2026–2027 increase enterprise value?
Short answer: Yes, but only for the two years 2026–2027 and only for qualifying enterprises; it must not be used to extrapolate long-term value.
Explanation: Resolution 43/2026/QH16 cuts CIT payable by 30% for enterprises with 2026 or 2027 revenue not exceeding VND 10 billion, computed on tax payable after deducting incentives. This is a temporary support policy, so DCF models must isolate this tax saving and apply it only to the two tax years.
Legal basis: Resolution 43/2026/QH16, effective 24/8/2026.
Recommendation: require valuation teams to present the policy's tax saving as a separate line in the model so the investment committee does not mistake it for the target's real operating performance.
Conclusion
The new tax framework from Law 67/2025/QH15, the global minimum tax and the 2026–2027 tax cut are rewriting tax assumptions in every M&A valuation model in Vietnam. Investors who timely update the 5 points in this article will avoid two costly mistakes: overpaying for tax incentives that no longer hold full value, and missing tax upside the seller has not priced in.
Tax in M&A is not just an obligation to pay but a valuation variable. If your company is preparing to buy, sell or appraise a transaction in Vietnam, FLAT Law Firm's lawyers can accompany you from tax due diligence, incentive and transition-clause review, to transaction structuring and sale-agreement negotiation. Contact us via hotline 0988424851 for advice on your specific deal.
References
- Corporate Income Tax Law No. 67/2025/QH15 (passed 14/6/2025, effective 01/10/2025) — Articles 10, 13, 14, 15, 19, 20.
- Decree 320/2025/ND-CP (issued 15/12/2025, guiding Law 67/2025).
- Circular 20/2026/TT-BTC (effective 12/3/2026, incentive procedures and dossiers).
- Resolution 107/2023/QH15 (global minimum tax, effective 01/01/2024) — Article 4 (QDMTT).
- Resolution 43/2026/QH16 (30% CIT reduction, effective 24/8/2026).