Vietnam updates tax rules for businesses
Vietnam transfer pricing rules have been unified under Decree 255/2026/ND-CP, which took effect on July 1, 2026 and will apply to the 2026 corporate income tax period.
Key changes to definitions and documentation thresholds
The decree expands the definition of related parties. A relationship now exists when a party acquires at least 25 percent of the owner’s contributed capital, or when loans from controlling individuals reach 10 percent of that capital. Certain wholly state‑owned entities that act solely as debt purchasers are excluded.
Businesses will need to revisit ownership structures and financing arrangements because parties previously considered unrelated may fall under the new criteria.
On the documentation side, the revenue threshold for exemption from transfer‑pricing paperwork rises from VND 200 billion to VND 500 billion. The “simple business functions” requirement is also dropped, allowing more low‑risk firms to avoid detailed reports.
Standardized data sources and revised country‑by‑country reporting
Decree 255 creates a hierarchy for comparable data, starting with publicly available databases and adding a National Database for benchmarking. This aims to reduce inconsistencies during audits and lower dispute rates.
Country‑by‑country reporting (CbCR) aligns with OECD BEPS Action 13. The filing threshold changes from VND 18 trillion to € 750 million in consolidated group revenue, calculated on the prior year’s figures. Reporting must be electronic, in XML format, via the Tax Management Information System.
CbCR submissions are limited to risk‑assessment use; they cannot be the sole basis for transfer‑pricing adjustments. Taxpayers must file a single notification using Form 01/TB‑BCLN and update it within 90 days of any change.
Multinational groups should audit their reporting processes now, ensuring that thresholds, timelines, and electronic filing requirements are met before the 2026 CIT filing season.
In practice, the shift mirrors earlier reforms in other emerging markets, where authorities have paired stricter definitions with higher exemption limits to encourage voluntary compliance while still targeting high‑risk entities.
Supportive measures and continuity of existing benefits
The decree also signals a move toward a taxpayer support model. Authorities will publish profit‑margin benchmarks by sector, offer voluntary compliance programs, and reinforce data confidentiality.
Existing benefits for interest‑expense carry‑forward under Decree 20 remain intact, allowing eligible firms to continue using deductible interest until the carry‑forward period ends.
Companies with related‑party transactions are advised to prioritize a review of ownership and financing arrangements, assess whether the higher documentation exemption applies, and adjust internal systems for XML filing to ensure compliance with the new regulations.
Overall, Decree 255 represents a significant overhaul of Vietnam’s transfer‑pricing framework, aligning domestic rules more closely with OECD standards while simplifying compliance for many businesses, which may need to apply for permanent residence to maintain a stable presence in the country.
