Executive Summary
Decree No. 255/2026/ND-CP fully replaces Decree No. 132/2020/ND-CP and Decree No. 20/2025/ND-CP, introducing significant updates to related-party transaction rules, transfer pricing documentation, CbCR, database hierarchy and interest expense limitations.
01. Issuance Timeline
Decree No. 132/2020/ND-CP, issued on 5 November 2020, established Vietnam’s transfer pricing tax administration framework, including the 30% EBITDA interest expense cap, three-tier documentation, a VND 200 billion documentation exemption threshold and a VND 18 trillion CbCR threshold.
Decree No. 20/2025/ND-CP, issued on 10 February 2025, amended selected rules concerning related-party relationships involving banks and credit institutions.
Decree No. 255/2026/ND-CP, issued on 30 June 2026 and effective from 1 July 2026, fully replaces both prior decrees.
02. Ten Key Highlights
1. Application principles
The Decree aligns transfer pricing tax administration and inspection principles with Tax Administration Law No. 108/2025/QH15.
2. Definitions
Key terms such as Ultimate Parent Entity, Tax Treaty, Related-Party Transaction, Local File, Master File and Systematic Failure to Exchange Information are clarified and updated.
3. Related-party relationships
Borrowing or lending equal to or exceeding 10% of contributed capital with executives or controllers may create a related-party relationship. An exclusion is also added for certain wholly state-owned debt purchase, sale and settlement entities.
4. Database hierarchy
The priority order is public and official data, commercial databases and tax authority databases.
5. Taxpayer rights and obligations
The Decree refers directly to taxpayers’ rights and obligations under Article 37 of the new Tax Administration Law.
6. Country-by-Country Reporting
The CbCR threshold changes to consolidated group revenue of at least EUR 750 million in the immediately preceding financial year. Reports must be submitted in encrypted XML format.
7. TP documentation exemption
The revenue threshold rises from below VND 200 billion to below VND 500 billion, while the “simple-function business” condition is removed.
8. Tax authorities’ responsibilities
CbCR may not be used to directly adjust or determine related-party transaction pricing. Voluntary compliance support programs and industry profitability benchmarks are also introduced.
9. Responsibilities of ministries and local authorities
Data-sharing and coordination responsibilities are updated to reflect the post-merger organizational structure.
10. Transitional provisions
Eligible enterprises may continue carrying forward non-deductible interest expense under Decree No. 20/2025/ND-CP for the remaining permitted period.
03. Three Key Figures to Remember
< VND 500 bn
Revenue threshold for selected TP documentation exemption cases.
EUR 750 m
Consolidated group revenue threshold for CbCR filing.
30% EBITDA
Cap on net interest expense deductible for CIT purposes.
Interest carry-forward: Non-deductible interest expense may generally be carried forward for up to five years.
04. Comparison of Decrees 132, 20 and 255
| Topic | Decree 132/2020 | Decree 20/2025 | Decree 255/2026 |
|---|---|---|---|
| Effective status | Effective from 20 December 2020. | Effective from 27 March 2025. | Effective from 1 July 2026 and fully replaces both prior decrees. |
| Legal basis | Based on Tax Administration Law No. 38/2019/QH14 and the Corporate Income Tax Law. | Same as Decree 132. | Based on Tax Administration Law No. 108/2025/QH15 and CIT Law No. 67/2025/QH15; adds definitions and references the global minimum tax framework. |
| Related-party loan and guarantee relationships | Borrowing above prescribed equity and debt thresholds could create a related-party relationship, including bank lending relationships. | Adds exclusions for certain independent credit institutions without management involvement or capital contribution. | Retains Decree 20 exclusions and adds an exclusion for certain wholly state-owned debt resolution entities. |
| TP documentation exemption | Revenue below VND 200 billion plus simple-function conditions and prescribed profitability ratios. | No change. | Revenue below VND 500 billion; removes the simple-function condition while retaining prescribed profit margin thresholds. |
| CbCR threshold | Global consolidated revenue of at least VND 18 trillion. | No change. | Global consolidated revenue of at least EUR 750 million in the immediately preceding financial year. |
| CbCR procedure | Annual notification and filing. | No change. | Initial notification filed once, updated within 90 days when changes arise, with encrypted XML submission. |
| Database priority | No explicit hierarchy among data sources. | No change. | Public and official data first, then commercial databases, then tax authority databases. |
| Interest expense cap | 30% EBITDA cap with five-year carry-forward. | Unchanged, with transitional provisions. | Unchanged. |
| Excluded projects and entities | Credit institutions, insurers, ODA loans, national target programs, resettlement housing, and housing for workers and students. | No change. | Adds social housing and updates the legal basis under the Law on Credit Institutions. |
05. Additional Notes
Country-by-Country Reporting exchange
Automatic CbCR exchange depends on whether the relevant jurisdiction has an effective exchange relationship with Vietnam and meets confidentiality standards.
Recommendation: Multinational enterprises should monitor annual tax authority announcements and coordinate with the group tax function to confirm whether local CbCR filing is required in Vietnam.
Taxpayer-centered compliance model
The new framework indicates a shift toward risk-based compliance support, voluntary compliance programs and publication of industry profit margins for taxpayer self-assessment.
Extended transfer pricing inspection period
A transfer pricing tax inspection may last up to 40 days and may be extended by a further 40 days. Cases involving foreign tax authority exchanges may extend for up to two years.
06. Preparation Checklist for the 2026 CIT Period
Update related-party mappingReview new borrowing, lending and family-related control relationships.
Review documentation requirementsCompare annual revenue against the VND 500 billion threshold and applicable industry profit margins.
Update benchmark sourcesApply the revised data hierarchy and prioritize public and official data.
Assess CbCR obligationsConvert consolidated revenue into EUR, test the EUR 750 million threshold and prepare the required notice and XML report.
Review preferential treatmentAssess eligibility for favorable compliance treatment based on recent compliance history.
Review carried-forward interest expenseConfirm whether transitional treatment under Decree No. 20/2025/ND-CP applies.
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