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When May a Constituent Entity Elect the Zero QDMTT Rate?

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Each year, if both conditions are met simultaneously — (1) average revenue under the Global Minimum Tax rules in Vietnam below EUR 10 million and (2) average income below EUR 1 million or a loss — the constituent entity may elect to apply or not apply the Qualified Domestic Minimum Top-up Tax (QDMTT) at a zero rate, under clause 9, Article 4 of Resolution 107/2023/QH15.

1. Conditions for electing the zero QDMTT rate

Under clause 9, Article 4 of Resolution 107/2023/QH15 on the Qualified Domestic Minimum Top-up Tax (QDMTT):

The QDMTT amount shall be determined as zero (0) in a fiscal year if the constituent entity or the group of constituent entities in the relevant fiscal year simultaneously meets the following conditions:

  • Average revenue under the Global Minimum Tax rules in Vietnam below EUR 10 million;
  • Average income under the Global Minimum Tax rules in Vietnam below EUR 1 million or a loss.

When both conditions above are met, each year the constituent entity may elect to apply or not apply the QDMTT at a zero rate.

2. How are average revenue and average income calculated?

Under clause 14, Article 3 of Resolution 107/2023/QH15:

The average revenue, average income or loss in a jurisdiction is the 3-year average (including the current fiscal year and the 2 immediately preceding years) of revenue, income or loss in that jurisdiction under the Global Minimum Tax rules.

The Global Minimum Tax rules means the provisions of Resolution 107/2023/QH15 and Government regulations consistent with the global minimum tax framework of the Inclusive Framework on Base Erosion and Profit Shifting, of which Vietnam is a member.

3. Who is responsible for developing measures to improve voluntary tax compliance?

Under Article 7 of Resolution 107/2023/QH15 on implementation:

Article 7. Implementation

1. The Government and ministries shall, within their duties and powers, organize and deploy the contents and policies of this Resolution; urgently prepare necessary conditions to ensure implementation; focus on multilateral cooperation on automatic information exchange for global minimum tax collection; develop plans and roadmaps for official deployment, assign responsibilities, organize the apparatus and resources to timely meet the capacity of tax authorities, with measures to improve voluntary compliance for taxpayers.

2. The National Assembly Standing Committee, the Council of Ethnic Groups and committees of the National Assembly, National Assembly delegations, National Assembly deputies, People’s Councils of centrally-run provinces and cities, the Vietnam Fatherland Front and its member organizations shall, within their duties and powers, supervise the implementation of this Resolution.

Accordingly, the National Assembly assigns the Government and ministries, within their duties and powers, to develop plans and roadmaps for official deployment with measures to improve voluntary compliance for taxpayers under the Global Minimum Tax rules.

Notes on applying current legal provisions

This article belongs to the Enterprise & Investment Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions. Legal provisions may change depending on timing, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

  • Applying legal texts that have been amended, supplemented or replaced.
  • Miscalculating average revenue or average income (must be a 3-year average, not single-year figures).
  • Misunderstanding the “simultaneous” condition — missing either condition disqualifies the election.
  • Filing dossiers without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary. For quick advice, you may contact a lawyer at 0966.475.966.

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