1. The context of corporate tax policy in 2025 and major changes.

In 2025, Vietnam enters a comprehensive tax reform period when the Law on Corporate Income Tax (CIT) 2025 takes effect from October 1, 2025. The new law is strategic, not only affecting investment capital flows but also reshaping M&A trends in Vietnam in the coming years.

Highlights of the Law on Corporate Income Tax 2025:

• Basic tax rate of 20%, additional incentives: 15% for micro enterprises (revenue ≤ 3 billion VND), 17% for small businesses (3–50 billion VND) VND)
• Expanding tax payers with foreign businesses doing business via digital platforms (digital PE).
• Adjusting regulations on deductions, loss compensation, and reasonable costs to increase transparency.
• Restructuring tax incentives and focusinginto high-tech, green energy, and innovation industries.
• Application of the Global Minimum Tax (Global Minimum Tax – 15%) for multinational corporations.

These changes shape a more competitive tax environment, while also setting new requirements in M&A structure and strategy.

2. Impact of new tax policy on M&A.

2.1. Changing M&A motives and strategies.

Small businesses with low preferential tax rates will tend to retain shares to continue to benefit. On the contrary, large enterprises, especially in industries that no longer have incentives, can accelerate the transfer before the new law takes effect. Strategic investors and M&A funds can take advantage of this opportunity to acquire knitting businessesg enjoy tax incentives, thereby optimizing consolidated profits after the merger.

2.2. Impact on transaction structure.

Cross-border M&A transactions are most affected, when foreign businesses may be considered to have a permanent establishment (PE) and must pay taxes in Vietnam. Capital transfer tax is more tightly managed, causing many buyers to consider buying assets (asset deal) instead of buying shares (share deal). Enterprises with accumulated losses or large depreciation become more attractive due to the ability to offset taxes after the merger.

2.3. Impact on valuation and deal negotiations.

New tax policy directly affects EBITDA, net profit and free cash flow (FCF) - fundamental factors of business valuation.

• Tax incentives cao → increased pricing.
• Loss of incentives → decreased pricing.
• With the Global Minimum Tax, Vietnam's domestic incentives may no longer be valid for multinational corporations, forcing them to adjust the purchase price accordingly.

2.4. Influence by industry and transaction time

• Technology, renewable energy, green manufacturing industries: enjoy tax incentives, attracting stronger M&A capital flows.
• Real estate industry, traditional industrial parks: have incentives narrowed, reducing M&A attractiveness.
• In terms of timing, businesses tend to complete deals before October 1, 2025 to take advantage of the current tax framework, Or wait until later to apply a new, more beneficial policy.

3. Opportunities and challenges for Vietnam's M&A market

Opportunities:

• Take advantage of tax incentives for small businesses and strategic industries.
• Increase M&A value in the field of green transformation and high technology.
• Offset losses, depreciate assets and optimize post-merger taxes.

Challenges:

• Risk of determining permanent establishment (PE) for foreign investors outside.
• New regulations on capital transfer tax and deduction mechanism are more complicated.
• Lack of detailed guidance from decrees and circulars under the law.
• Impact of global minimum tax, reducing the effectiveness of tax incentives in Vietnam.

4. Optimal M&A strategy in the new tax context

To adapt and take advantage of opportunities from new tax policies, businesses should:

• Perform tax appraisal (TaxDue Diligence) in depth.
• Flexible structure between “share deal” and “asset deal” to optimize taxes.
• Determine the timing of strategic transactions in accordance with the effect of the new law.
• Post-M&A planning (Post-Merger Integration) with tax elements.
• Closely monitor the law enforcement guidance and related decrees.

New year tax policy 2025 is not just a technical adjustment, but a strategic turning point in the way Vietnam manages investment and M&A. Businesses and investors need to proactively restructure their M&A strategies to adapt, while taking advantage of opportunities from legal tax incentives.

In the post-2025 era, understanding tax law is understanding the M&A market – and tax-aware investors will be the ones to choose.win at the negotiating table.