Decree 324 Explained: The VIFC Tax Incentives That Matter — and the Pillar Two Problem Nobody Is Modelling

Decree 324/2025/ND-CP is the instrument that turns Resolution 222's headline tax promises into operational rules. Issued on 18 December 2025 alongside seven companion decrees, it specifies the CIT incentive tiers, PIT exemptions, import duty relief, and accounting standard flexibility that VIFC member entities can claim. For finance executives modelling whether Ho Chi Minh City or Da Nang makes commercial sense, this is the decree that defines the numbers — and the conditions attached to them.

But the headline numbers tell only part of the story. Vietnam's simultaneous adoption of the Pillar Two global minimum tax changes the arithmetic for the institutions the VIFC most wants to attract.

The two-tier CIT structure#

Decree 324 implements two distinct CIT incentive tracks, originally set out in Resolution 222, Article 19, Clause 1.

Priority sectors: 10% for 30 years#

Enterprises operating in designated priority sectors receive:

• A 10% CIT rate for 30 years (against the standard 20% rate)
• Full CIT exemption for up to 4 years from the first year of taxable revenue
• 50% CIT reduction for up to 9 subsequent years

The priority sectors themselves are defined not in Decree 324 but in the Appendix to Decree 323/2025/ND-CP, the VIFC's founding charter. They fall into five categories:

1. IFC infrastructure development — physical and digital infrastructure for the financial centre
2. Green finance and ESG-linked instruments — green bonds, sustainability-linked lending, carbon credit trading
3. Commodity and derivatives trading — relevant to the commodity exchange framework under Decree 330
4. Fintech and financial innovation — digital payments, blockchain applications, insurtech
5. Investment fund management — asset management, venture capital, private equity administration

Non-priority sectors: 15% for 15 years#

Enterprises in sectors that qualify for VIFC membership but fall outside the priority list receive:

• A 15% CIT rate for 15 years
• Full CIT exemption for up to 2 years
• 50% CIT reduction for up to 4 subsequent years

Choosing the best rate#

Where an enterprise qualifies for multiple incentive regimes — say, under both the VIFC framework and an existing investment incentive programme — Resolution 222 explicitly permits it to "choose to apply the most beneficial corporate income tax incentive." This is a meaningful flexibility. Vietnam's investment incentive landscape is layered, with competing programmes at national, provincial, and sectoral levels. The opt-in model means VIFC membership does not force enterprises into a single track.

One important limitation: expansion projects are excluded. Only new investment projects qualify for the preferential CIT tiers. Enterprises expanding existing operations revert to standard CIT rules, a restriction that firms with current Vietnamese operations need to factor into their structuring.

The Pillar Two problem#

This is the part of the VIFC tax story that has received the least practitioner attention, and it may be the most consequential.

On 29 August 2025 — a month before Resolution 222 took effect — Vietnam enacted Decree 236/2025/ND-CP, implementing the OECD's Pillar Two framework through a Qualified Domestic Minimum Top-Up Tax (QDMTT). The QDMTT applies to multinational enterprises with consolidated global revenue of EUR 750 million or more in at least two of the four preceding fiscal years.

The mechanism is straightforward: if a qualifying MNE's effective tax rate in Vietnam falls below 15%, the QDMTT tops it up to 15%. Vietnam collects the difference domestically, pre-empting any top-up tax that would otherwise be collected by the MNE's parent jurisdiction.

For the VIFC, the implication is direct. The 10% headline CIT rate — the centrepiece of the priority-sector incentive — is largely neutralised for the exact institutions the VIFC is designed to attract. A global bank, asset manager, or insurance group with EUR 750 million in consolidated revenue will not achieve a 10% effective rate. The QDMTT brings them to 15%.

Who actually benefits from 10%?#

The CIT incentive retains real value for three categories of firm:

• Mid-market financial institutions below the EUR 750 million threshold — regional banks, boutique asset managers, specialist trading firms
• Domestic Vietnamese financial enterprises expanding into VIFC-eligible activities
• Newly established ventures that will not reach the Pillar Two threshold within their tax holiday period

For the global banks and tier-one asset managers that feature prominently in VIFC promotional materials, the 15% non-priority rate is effectively the operative floor regardless of sector classification. The tax holiday periods (exemption and reduction years) still provide near-term cash flow benefits, but the long-term rate advantage narrows considerably.

A design tension, not a flaw#

This is not unique to Vietnam. Every jurisdiction offering sub-15% incentive rates faces the same Pillar Two arithmetic. Dubai's DIFC — which offers a 0% CIT rate — confronts an even starker version of this challenge. The difference is that DIFC has a 20-year head start, an established ecosystem, and network effects that make the tax rate one factor among many. The VIFC is asking institutions to make a greenfield bet where tax incentives carry more weight in the early calculus.

Vietnam's policymakers are aware of the tension. The QDMTT was deliberately structured as a domestic collection mechanism — Vietnam keeps the top-up revenue rather than ceding it to parent jurisdictions. But from the perspective of an MNE's tax team, the net rate is 15% either way. The comparative analysis between the VIFC and other IFCs should be read with this constraint in mind.

Personal income tax: two exemptions through 2030#

Decree 324 implements two PIT exemptions that apply through 31 December 2030.

Employment income#

Managers, experts, scientists, and highly qualified personnel — both Vietnamese nationals and foreigners — working at the VIFC are fully exempt from PIT on employment income earned from VIFC-based work. Vietnam's standard PIT rates for employment income are progressive, reaching 35% on income above VND 80 million per month. A full exemption is a material benefit for senior hires.

The precise eligibility criteria for "highly qualified personnel" are to be defined by implementing regulation. Decree 324 reaffirms the exemption categories from Resolution 222 but does not itself provide the granular definitions — minimum salary thresholds, required qualifications, or sector-specific standards — that compliance teams need to confirm individual eligibility. Firms should monitor for any subsequent Ministry of Finance circular clarifying these boundaries.

Capital gains#

Individuals earning income from transferring shares or capital contributions in VIFC member entities are also fully PIT-exempt through 31 December 2030. This covers founders, early investors, and employees exercising equity compensation — a significant incentive for the startup and fund ecosystem the VIFC aims to cultivate.

Two carve-outs apply: real estate transfers follow standard PIT rules, and transfers of public company securities also appear to be excluded based on advisory analysis, though the exact boundary merits confirmation against the Vietnamese-language decree text.

The 2030 sunset question#

Both PIT exemptions expire on 31 December 2030. Resolution 222 itself has a five-year lifespan from September 2025 and is to be replaced by a full IFC Law, with a legislative proposal due by 30 March 2034 (Article 35). The gap between the 2030 PIT sunset and any successor regime creates uncertainty. An executive relocating to HCMC in 2027 has three years of guaranteed PIT exemption — useful, but not the kind of long-duration certainty that drives permanent relocation decisions.

Whether the successor IFC Law will extend, modify, or replace the PIT exemptions has not been addressed. This is a question that VIFC recruiters will face from every senior hire they try to attract.

Accounting standards flexibility#

Resolution 222, Article 11 grants VIFC member entities the option to apply IAS/IFRS or the accepted accounting standards of 16 listed jurisdictions instead of Vietnamese Accounting Standards (VAS). The permitted jurisdictions are: Australia, Brazil, Canada, EU member states, Hong Kong, Japan, Mexico, New Zealand, China, India, South Korea, Russia, Singapore, Switzerland, the UK, the USA, and Vietnam.

For international firms, this is one of the VIFC's most practically significant concessions. Vietnam's domestic accounting standards diverge from IFRS in areas including revenue recognition, financial instrument classification, and consolidation requirements. Maintaining dual books — IFRS for group reporting and VAS for local compliance — is a genuine operational burden. The ability to use a single set of books under IFRS or home-jurisdiction standards removes a friction point that has historically complicated Vietnam market entry for global financial institutions.

The flexibility applies to VIFC members specifically. Entities operating elsewhere in Vietnam continue to follow VAS requirements.

Import and export duty relief#

Decree 324 provides targeted duty relief for VIFC members:

• Import duty exemption for technical equipment, technology, and software serving IT infrastructure projects that are not domestically produced
• Import duty exemption for goods forming fixed assets, subject to a notification requirement — entities must file a list of tax-exempt items with customs authorities
• Preferential rates per Vietnam's treaty obligations for goods crossing the IFC boundary

These provisions are primarily relevant for firms building physical trading floors, data centres, or technology infrastructure within the VIFC zones. The notification requirement for fixed-asset imports adds an administrative step but is consistent with Vietnam's existing duty exemption procedures for investment projects.

Who can claim these incentives#

Not every entity operating near the VIFC zones qualifies. Decree 323 and Decree 324 together establish two membership tracks:

• Recognition-eligible (fast-track): Financial institutions, investment funds, or enterprises in the Fortune Global 500 (or their direct parents), and top-10 domestic institutions by charter capital in their sector
• Registration-eligible: Entities meeting financial capacity and credibility standards assessed against IFC development criteria

All members must maintain their headquarters within the VIFC throughout the period they claim incentives. This is not a brass-plate jurisdiction — the residency requirement has teeth, and firms considering a minimal-presence structure should read the membership and licensing requirements carefully.

VIFC members must also comply with the banking and foreign exchange regulations under Decree 329 and Circular 72, which govern how member entities handle cross-border transactions and AML obligations.

What to model and what to watch#

For tax and finance teams evaluating the VIFC, the practical takeaways are:

1. Run the Pillar Two calculation first. If your group exceeds EUR 750 million in consolidated revenue, the effective CIT floor is 15%, not 10%. Model accordingly.
2. The PIT exemption is the clearest near-term benefit for talent attraction — but it expires in 2030 with no confirmed successor.
3. IFRS flexibility removes a real operational cost, particularly for firms already maintaining group accounts under international standards.
4. Priority sector classification matters for sub-threshold firms. Confirm whether your activities map to the Decree 323 Appendix categories before assuming the 10% rate applies.
5. Watch for the eligibility circular. The detailed criteria for PIT-exempt "highly qualified personnel" will determine how broadly firms can extend the employment income exemption across their VIFC workforce.

The VIFC tax package is competitive but conditional. It rewards firms that commit to genuine operations in Ho Chi Minh City or Da Nang, penalises minimal-presence structures, and — for the largest multinationals — delivers less than the headline numbers suggest. The institutions that will extract the most value are mid-market specialists, regional players, and domestic firms scaling into international finance — not necessarily the global giants that dominate the VIFC's promotional narrative.

This guide reflects Decree 324/2025/ND-CP as issued on 18 December 2025 and the QDMTT framework under Decree 236/2025/ND-CP. We will update it as implementing circulars and successor legislation are issued.