Q&A: Compliance with Vietnam’s Transfer Pricing Rules

The 2024 tax finalization, which ends on March 31, 2025, and the transfer pricing compliance declaration pose significant challenges for businesses engaged in related party transactions to comply with current and newly updated rules. In this article, experts at Dezan Shira & Associates address the most common questions we encounter when supporting our clients navigating Vietnam’s transfer pricing regulations.

Effective tax planning is crucial for business management because it allows companies to lower their tax obligations, comply with regulations, and make the most of their financial resources. However, the tax finalization period is often the busiest time of the financial year for any company. Among the various responsibilities during this period, the complexity of transfer pricing rules in Vietnam can be overwhelming for corporate accountants.  This Q&A guide with the experts at Dezan Shira & Associates explores common concerns foreign businesses face in complying with Vietnam’s transfer pricing requirements.

Q1: What specific information must companies declare regarding related-party relationships and transactions?

In accordance with Decree No. 132/2020/ND-CP (“Decree 132”), supplemented and amended by Decree 20/2025/ND-CP (“Decree 20”), companies with related-party transactions shall declare information about related-party relationships and transactions by compiling the appropriate declaration forms. The declaration forms shall be submitted together with the corporate income tax (CIT) finalization return. The current applicable forms are Form 01, Form 02, Form 03, and Form 04, which are enclosed in the attachments of Decree 20.

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Furthermore, companies engaged in transfer pricing shall prepare the transfer pricing documentation package, which includes a Local File, Master File, and Country-by-country Report.

Businesses must also pay attention to exemption cases of Local File, Master File, and relevant transfer pricing declaration forms. We will discuss these specific details in the following questions.

Also read: Related Party Transactions in Vietnam: Key Provisions Under Decree 20

Q2: What are the deadlines for submitting transfer pricing document submissions?

Businesses must submit transfer pricing declaration forms by March 31 each year, coinciding with the CIT finalization deadline. However, it is necessary to comprehend the following notes for the best compliance.

Prioritizing transfer pricing method determination

The transfer pricing declaration form will be submitted along with the annual CIT return, as the deadline for this declaration is the same.

To complete these declaration forms, an entity must provide information regarding its transfer pricing method. The transfer pricing method will be analyzed and established when the entity prepares its Local File and Master File.

In practice, preparing these files can be time-consuming. To ensure the annual CIT return is submitted within the regulated deadline, the best practice is to assume the transfer pricing method in the declaration forms.  The entity can then update the transfer pricing declaration forms accordingly and re-submit the annual CIT return later.

Ensuring well-maintained Local File and Master File

Local and Master Files do not need to be submitted annually but must be retained for submission if requested by tax authorities. As mentioned above, it is recommended that the company prepare them now, along with the transfer pricing forms, if required by regulations.

Also read: What is a Transfer Pricing Review and Why Do Firms in Vietnam Need It?

Q3: When will businesses be exempted from the above transfer pricing requirements?

There are specific exemptions for the previously mentioned transfer pricing requirements, including:

Case 1: Entities engaged in related-party transactions will be exempted from transfer pricing requirements (i.e., Local File, Master File, Form 02, and Form 03) if they meet the following requirements:

• Pay corporate income taxes in Vietnam;
• Subject to the same corporate tax rate as its related party; and
• Do not receive any corporate income tax incentives.

However, enterprises are still required to complete Form 01 as attached under Decree 20, but Part III and Part IV of this Form are exempt.

Case 2: An entity is responsible for fully declaring transfer pricing information according to Form 01 under Decree 20, but it is exempted from Local File, Master File, Form 02, and Form 03 if any of the following conditions are met:

• Revenue and transaction caps: Its total revenue is less than VND 50 billion (approx. US$1.96 million), and the related-party transaction value does not exceed VND 30 billion (approx. US$1.17 million) within the fiscal year.
• Advance Pricing Agreement (APA): The entity has an APA with tax authorities regarding the future implementation of transfer pricing policies.
• Exercising routine functions: The entity performs business activities by exercising routine functions, neither generating any revenue nor incurring any cost from operation or use of intangible assets, generating sales of less than VND 200 billion (approx. US$7.82 million), and complies with the following ratios of earnings before interest and taxes (EBIT):
  • Distribution: at least 5 percent;
  • Manufacturing: at least 10 percent; and
  • Processing: at least 15 percent.

Q4: Does meeting the above requirements guarantee a complete exemption for all transfer pricing declaration documents?

Not entirely. Even if an entity meets the requirements mentioned above, it must prepare the Country-by-Country Report and transfer pricing declaration Form 04 if any of the following criteria are met:

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• The ultimate parent operates in Vietnam and generates consolidated revenues of at least VND 18 trillion (approximately US$704.09 million); or
• The ultimate parent company is overseas and required to submit this report to the host-country tax authority. There is no Automatic Exchange of Information (“AEoI”) between Vietnam and the jurisdiction of residence of the ultimate parent, in accordance with the International Tax Agreement or the Multilateral Competent Authority Agreement (“MCAA”), or if such AEoI has been suspended.

For further advice or clarification on any aspect of transfer pricing in Vietnam, please reach out to our expert for prompt assistance.

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