Investment incentives in the global minimum tax era: Vietnam's Investment Support Fund and non-tax incentives

The short answer

For groups with consolidated revenue of EUR 750 million or more, Vietnamese CIT incentives (a 10% rate, multi-year exemptions and reductions) are largely clawed back through the Qualified Domestic Minimum Top-up Tax (QDMTT). The reason is that the effective tax rate is pulled back up to 15%.

Investment incentives still matter, but the effective tools have changed:

• The Investment Support Fund under Decree No. 182/2024/ND-CP directly supports part of the costs of training, research and development, fixed asset investment and high-tech production. R&D centres in semiconductors and artificial intelligence can receive up to 50% of their initial investment costs.

• Incentives other than CIT, such as land rent exemptions and reductions, import duty exemptions for fixed assets, infrastructure and fast-track investment procedures.

For groups below the threshold and for domestic businesses, traditional CIT incentives retain their full value.

Why do CIT incentives "stop working" for large groups?

Suppose a project enjoys a 10% rate and a 4-year exemption. During the exemption years, the effective tax rate is close to 0%. If the group is in scope of the global minimum tax, the gap up to 15% (after the substance-based income exclusion) must be paid as top-up tax.

The result is that Vietnam's budget recovers most of the incentive granted. The business no longer benefits as much as originally expected.

That is why Vietnam established the Investment Support Fund. The Fund provides cash support to strategic investors, rather than relying solely on tax exemptions.

The Investment Support Fund: key points

Item	Main provisions of Decree No. 182/2024/ND-CP
Eligible for annual cost support	High-tech enterprises; enterprises with high-tech production projects; enterprises with high-tech application projects; enterprises with R&D centre projects
Size conditions (general)	Project capital of at least VND 12,000 billion or revenue of at least VND 20,000 billion a year
Size conditions (chips, semiconductor ICs, AI data centres)	Capital of at least VND 6,000 billion or revenue of at least VND 10,000 billion a year
Supported costs	Human resource development, research and development, fixed asset investment, high-tech production and social infrastructure
Initial investment cost support	For R&D centre projects in semiconductors and artificial intelligence, up to 50% of initial investment costs
General conditions	No overdue tax or budget debts at the time of application, plus other prescribed conditions

Businesses should check any amendments at the time of application, as Fund policy continues to be refined.

Incentive tools and their effect on the global minimum tax

Tool	Effect on the GloBE effective tax rate	Value for in-scope groups
Preferential CIT rates, CIT exemptions and reductions	Directly reduce covered taxes, pulling the effective rate below 15%	Low; largely clawed back through QDMTT
Cash support from the Investment Support Fund	Depending on GloBE classification, may be treated as income rather than a tax reduction	Higher; accounting treatment needs careful assessment
Land rent exemptions and reductions	Not a "covered tax" under GloBE; mainly affect costs	Largely retain their value
Import duty exemptions for fixed assets	Import duties are not income taxes under GloBE	Largely retain their value
Investment in people and tangible assets in Vietnam	Increases the substance-based income exclusion, reducing excess profit	Directly reduces top-up tax

Five principles for designing an incentive package for a new project

1. Establish whether the group exceeds EUR 750 million before negotiating incentives. The answer determines which incentives have real value.

2. Model the GloBE effective tax rate over the whole project life cycle, including QDMTT.

3. Prioritise direct support and non-CIT incentives for in-scope groups: the Investment Support Fund, land rent, import duties and infrastructure.

4. Factor in the substance-based income exclusion: headcount and tangible assets in Vietnam directly reduce top-up tax.

5. Prepare for the Fund's eligibility conditions from the outset: capital, revenue, high-tech certification, workforce commitments and a clean tax record.

Illustrative case

A Korean group plans to invest VND 8,000 billion in a semiconductor component plant. Following traditional thinking, the group focused on negotiating a 10% rate for 15 years and a 4-year exemption.

When modelled under the GloBE rules, most of these incentives would be clawed back through QDMTT, because the group's consolidated revenue is far above the EUR 750 million threshold.

The group adjusted its strategy in three ways:

• it assessed eligibility for support from the Investment Support Fund (the project is in the semiconductor sector, with a VND 6,000 billion capital threshold);

• it optimised land rent exemptions and import duty exemptions on equipment;

• it expanded its engineering centre in Vietnam, both to meet the Fund's conditions and to increase the substance-based income exclusion.

FAQs

Do CIT incentives still matter with the global minimum tax?

For domestic businesses and groups below EUR 750 million, they keep their full value. For in-scope groups, most of the incentive may be clawed back through QDMTT.

What does the Investment Support Fund support?

Part of the costs of human resource development, research and development, fixed asset investment, high-tech production and social infrastructure. R&D centres in semiconductors and AI may receive up to 50% of initial investment costs.

Which businesses are eligible?

Mainly high-tech enterprises and large high-tech or R&D projects with capital of VND 12,000 billion or more, or revenue of VND 20,000 billion or more a year. For chips, semiconductors and AI data centres, the thresholds are VND 6,000 billion in capital or VND 10,000 billion in annual revenue.

Is a land rent exemption clawed back by the global minimum tax?

Usually not directly. Land rent is not an income tax under the GloBE rules, so the incentive mainly reduces costs and retains most of its value.

Legal basis

• Decree No. 182/2024/ND-CP on the establishment, management and use of the Investment Support Fund.

• Resolution No. 107/2023/QH15 and Decree No. 236/2025/ND-CP on the global minimum tax.

• Law on Investment No. 143/2025/QH15.

• CIT Law No. 67/2025/QH15 and Decree No. 320/2025/ND-CP.

How W&A can help

Designing an incentive package in the global minimum tax era requires combining investment law, international tax and financial modelling. W&A supports investors with:

• GloBE effective tax rate modelling and the real value of each incentive over the project life cycle.

• Eligibility assessment and applications to the Investment Support Fund.

• Advice on non-CIT incentives: land rent, import duties and special investment procedures.

• Negotiations and engagement with authorities on incentive packages for strategic projects.

• Structuring investment and the value chain in Vietnam to optimise the substance-based income exclusion.