JPA Vietnam · Transfer Pricing Update
Decree No. 255/2026/ND-CP on Related-Party Transactions
New transfer pricing regulations replacing Decree No. 132/2020/ND-CP and Decree No. 20/2025/ND-CP, effective from 1 July 2026.
01. Regulatory Timeline
Decree No. 132/2020/ND-CP, issued on 5 November 2020, established Vietnam’s core framework for tax administration of related-party transactions, including the 30% EBITDA interest cap, three-tier documentation and Country-by-Country Reporting.
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 Changes
1. Principles of application
The Decree aligns transfer pricing tax administration and inspection principles with the Law on Tax Administration No. 108/2025/QH15.
2. Updated definitions
Key terms such as Ultimate Parent Entity, Tax Agreement, Related-Party Transaction, Local File, Master File and Systemic Failure to Exchange Information are clarified.
3. Broader related-party scope
Borrowing or lending equal to or exceeding 10% of contributed capital with individuals who manage or control the enterprise may create a related-party relationship.
4. Revised database hierarchy
The order of priority is public and official data, commercial databases and tax authority databases.
5. Taxpayer rights and obligations
The Decree cross-refers to taxpayer rights and obligations under Article 37 of the new Law on Tax Administration.
6. Country-by-Country Reporting
The 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. Broader documentation exemption
The revenue threshold increases from below VND 200 billion to below VND 500 billion, while the “simple-function business” condition is removed.
8. Tax authority responsibilities
CbCR information may not be used to directly adjust or impose related-party transaction pricing. Voluntary compliance programs and sector profitability benchmarks are also introduced.
9. Ministry and local authority responsibilities
Information-sharing responsibilities are updated to reflect the restructured administrative framework.
10. Transitional provisions
Eligible non-deductible interest expense under Decree No. 20/2025/ND-CP may continue to be carried forward for the remaining permitted period.
03. Three Key Figures to Remember
< VND 500 bn
Revenue threshold for selected transfer pricing documentation exemption cases.
EUR 750 m
Consolidated group revenue threshold for CbCR.
30% EBITDA
Cap on net interest expense deductible for corporate income tax purposes.
Interest carryforward: Non-deductible interest expense may generally be carried forward for up to five years.
04. Comparison: 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 replaces both prior decrees. |
| Documentation exemption | Revenue below VND 200 billion plus simple-function conditions. | Unchanged. | Revenue below VND 500 billion; simple-function condition removed. |
| CbCR threshold | Global consolidated revenue of at least VND 18 trillion. | Unchanged. | Consolidated revenue of at least EUR 750 million in the immediately preceding financial year. |
| CbCR procedure | Annual notification and submission. | Unchanged. | Initial notification filed once, updated within 90 days, encrypted XML submission. |
| Database priority | No explicit hierarchy. | Unchanged. | Public and official data, then commercial databases, then tax authority data. |
| Interest limitation | 30% EBITDA cap with five-year carryforward. | Substantively unchanged. | Maintains the cap and adds social housing projects to the exclusion list. |
05. Additional Practical Observations
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 determine whether local filing is required.
Shift toward taxpayer-centred compliance
The framework indicates a move toward risk-based compliance support, voluntary compliance programs and publication of industry profitability benchmarks.
Extended inspection period
A transfer pricing tax inspection may last up to 40 days and may be extended for a further 40 days. Cases involving foreign tax authority exchanges may extend for up to two years.
06. Preparation Checklist for the 2026 Tax Period
Update the related-party mapReview new borrowing, lending and family-related control relationships.
Reassess documentation obligationsCompare revenue against the VND 500 billion threshold and applicable profitability ratios.
Update benchmarking sourcesApply the revised hierarchy and prioritise public and official data.
Review CbCR requirementsAssess the EUR 750 million threshold and prepare the required notification and XML report.
Review compliance statusAssess eligibility for favourable compliance treatment.
Review interest carryforwardConfirm eligibility for transitional carryforward treatment under Decree No. 20/2025/ND-CP.
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