The Vietnamese Ministry of Finance has submitted a draft resolution to the Ministry of Justice for review, proposing amendments to Resolution No. 107/2023/QH15 regarding additional corporate income tax in line with global anti-tax base erosion rules.
BOT Power Projects Face Potential $400 Million Tax Burden
In its proposal, the Ministry of Finance cited the Ministry of Industry and Trade’s concerns about the impact of the global minimum tax on Vietnam’s BOT (Build-Operate-Transfer) thermal power projects.
According to the Ministry of Industry and Trade, seven government-guaranteed BOT power projects could face additional tax liabilities under the Global Anti-Base Erosion (GloBE) rules. These projects, with substantial capacities and investment capital, rely heavily on international financing (75-80%) and investor equity (20-25%).
As multinational entities, these projects fall under the scope of Resolution 107.
Preliminary assessments indicate significant financial losses due to the GloBE rules. For instance, the Mong Duong 2 project faces a potential $14.4 million tax burden by 2040, while Vinh Tan 1 could incur $65 million by 2043. Other projects, including Nghi Son 2, Van Phong, Vung Ang 2, and Hai Duong, face similar challenges, totaling an estimated $425.83 million in additional taxes (excluding Duyen Hai 2, for which data is unavailable).
 Nghi Son 2 BOT Thermal Power Plant has been operating both turbines commercially since July 2022. Photo: Thanh Hoa Newspaper |
The Ministry of Industry and Trade urges the Ministry of Finance to seek government approval for exemptions from Resolution 107 for BOT power projects or to introduce suitable exemption mechanisms.
The proposal reveals that during the drafting of Resolution 107, an exemption for projects with investment incentives was considered but ultimately replaced by Article 8(2).
The Ministry of Finance argues that amending Resolution 107 to allow the government to handle tax exemption requests is necessary due to the complexity and evolving nature of global minimum tax policies. Many countries are still in the process of domesticating these rules, creating uncertainty.
Given the novelty of implementation in Vietnam and the potential for unforeseen scenarios, a flexible mechanism is crucial to avoid legal disputes, complaints, and damage to Vietnam’s investment reputation.
Proposed Exemption for BOT Power Projects from Global Minimum Tax
The Ministry of Finance proposes adding Article 4(10) to Resolution 107, stating that the additional corporate income tax for BOT power projects with pre-2024 contracts and tax commitments will be set to zero. This applies to both individual projects and multinational groups with multiple entities in Vietnam.
This amendment aims to effectively exempt government-guaranteed BOT power projects from the GloBE rules by setting their additional tax liability to zero.
Tam An
– 05:45 23/09/2025
