Hiring a related-party transaction consultant is a necessary preparatory step for the 2026 tax filing season for foreign-invested enterprises (FIEs) and businesses engaged in transactions with related parties in Ho Chi Minh City. This is because Decree 255/2026/ND-CP took effect on July 1, 2026, applies to the 2026 corporate income tax filing period, and replaces Decree 132/2020/ND-CP. The new decree expands the definition of related-party relationships, establishes the order of priority for using comparative data, and allows tax authorities to determine values based on the median price. Therefore, even a single error in filing can lead to significant back taxes. The article below was prepared by the transfer pricing expert team at MAN – Master Accountant Network. It analyzes the practical risks, benefits, costs, and procedures involved in hiring transfer pricing consultants, helping businesses proactively prepare for tax audits.
The Context of Tax Audits of Related-Party Transactions in 2026
Regarding the legal framework, the Government issued Decree No. 255/2026/NĐ-CP on June 30, 2026, regulating tax administration for related-party transactions of enterprises with affiliated relationships. The Decree takes effect on July 1, 2026, and applies to the 2026 corporate income tax filing period. Decree No. 132/2020/ND-CP and Decree No. 20/2025/ND-CP are repealed as of the effective date of Decree No. 255. Pursuant to Article 21 of Decree No. 255/2026/ND-CP, tax authorities shall apply risk management in planning audits of businesses with related-party relationships and related-party transactions. Therefore, the information voluntarily reported by businesses serves as the input data for tax authorities to select entities for audit.
In Ho Chi Minh City, the country’s most dynamic economic hub, the City Tax Department has implemented automated monitoring tools. Even a slight deviation in profit margins from the industry average, or interest expenses exceeding the control threshold, will automatically place the business on the “red list” for audit. If a business does not proactively hire a transfer pricing consultant early on, providing explanations later will become extremely difficult.
Understanding Related-Party Transactions Under Decree No. 255/2026/NĐ-CP
To manage risk, businesses must first have a solid understanding of the current legal framework, which is Decree 255/2026/ND-CP. This is the regulatory document directly governing tax administration for related-party transactions involving affiliated enterprises, replacing Decree No. 132/2020/ND-CP and Decree No. 20/2025/ND-CP. When you decide to hire a transfer pricing consultant, experts will explain the following key points in detail:
Who are the related parties?
Paragraph 1 of Article 5 of Decree No. 255/2026/ND-CP refers to the definition of related parties as set forth in Paragraph 17 of Article 4 of the Tax Administration Law No. 108/2025/QH15. Paragraph 2 of Article 5 specifically lists 12 cases, from point a to point m. When engaging a transfer pricing consultant, a business will be able to accurately identify the following specific cases:
Equity Ownership (Direct or Indirect)
- An enterprise directly or indirectly holds at least 25% of the equity of the owner of the other enterprise.
- Both businesses have at least 25% of owner's equity held directly or indirectly by a third party.
- One company is the largest shareholder of the other company in terms of equity capital and holds, directly or indirectly, at least 10% of the other company’s total shares.
Lending Relationships
Pursuant to Point d, Paragraph 2, Article 5 of Decree No. 255/2026/ND-CP:
An enterprise guarantees or lends capital to another enterprise in any form (including third-party loans secured by related-party financing and similar financial transactions) provided that the total outstanding debt of the borrowing enterprise to the lending or guaranteeing enterprise is at least equal to 25% of the owner's equity of the borrowing enterprise and accounts for more than 50% of the total outstanding debt of all medium and long-term debts of the borrowing enterprise.
The provision in subparagraph d does not apply to the following cases:
- Guarantors or lenders are economic organizations operating in accordance with the Law on Credit Institutions No. 32/2024/QH15 (as amended and supplemented by Law No. 96/2025/QH15) and do not directly or indirectly participate in the management, control, capital contribution, or investment in the borrowing enterprise or the guaranteed enterprise, as prescribed.
- The guarantor or lender is an economic organization operating in accordance with the Law on Credit Institutions No. 32/2024/QH15 (amended and supplemented by Law No. 96/2025/QH15), and the borrowing or guaranteed enterprise is not directly or indirectly under the management, control, capital contribution, or investment of another party as stipulated in points b, e, and i of this clause.
- Creditors and guarantors are state-owned organizations with charter capital that function to buy, sell, and process debt, but do not directly or indirectly participate in the management, control, capital contribution, or investment in the debtor enterprise or the guaranteed enterprise as stipulated in points a and c of this clause.
This is where hiring a related-party transaction advisor can help a business conduct the most thorough review, as the risk of exceeding the 30% EBITDA interest expense cap often stems from this.
General Management and Oversight
- A business appoints members to the executive management or controlling body of another business, provided that the number of appointed members constitutes more than 50% of the total number of members of the executive management or controlling body of the other business.
- Two companies that either both have more than 50% members on their executive management teams or share an executive management team member who has the authority to make decisions regarding financial policies or business operations designated by a third party.
- Two businesses that are managed or controlled—in terms of personnel, finances, and business operations—by individuals who are closely related by family ties (spouse, biological parents, adoptive parents, biological children, adopted children, half-siblings, maternal and paternal grandparents, etc.).
Other types of relationships
Specifically:
- The two businesses have a head office and permanent establishment relationship, or both are permanent establishments of a foreign organization or individual.
- Businesses controlled by an individual through that individual’s capital contribution to the business or through direct participation in the management of the business
- Other cases in which an enterprise (including independently accounted branches that file and pay corporate income tax) exercises de facto management, control, and decision-making over the production and business operations of another enterprise
- A business that engages in transactions involving the transfer or acquisition of at least 25% of the business owners’ capital contributions during the tax period; borrowed, lent, or borrowed from or lent to individuals managing or controlling the business, or to individuals with whom the business has one of the relationships specified by law, in amounts totaling at least 10% of the business owners’ capital contributions at the time the transaction occurred during the tax period;
- A credit institution and its subsidiary, controlling company, or affiliate, as defined in the Law on Credit Institutions No. 32/2024/QH15, as amended and supplemented by Law No. 96/2025/QH15
Family-owned businesses should pay special attention to point l. Transactions borrow, lend With directors, auditors, or their relatives, if the threshold of 10% of the owners’ contributed capital is reached, an affiliated relationship is also established during the tax period.
See also: 12 methods for determining affiliated relationships under Decree 255.
Common Related-Party Transactions
Pursuant to Paragraph 1 of Article 4 of Decree No. 255/2026/ND-CP:
Related party transactions include the purchase, sale, exchange, lease, rental, borrowing, lending, transfer, and assignment of goods; the provision of services; borrowing, lending, financial services, financial guarantees, and other financial instruments; the purchase, sale, exchange, lease, rental, borrowing, lending, transfer, and assignment of tangible and intangible assets; and agreements to purchase, sell, and jointly use resources such as assets, capital, and labor, and to share costs between related parties, excluding business transactions involving goods and services subject to state price regulation as stipulated by law on pricing.
In practice, correctly identifying related parties and accurately classifying each transaction in accordance with Decree 255/2026/NĐ-CP is much more complex. Even a minor discrepancy in the understanding of lending relationships, ownership structures, or the nature of a transaction can lead to incorrect reporting or the incorrect application of pricing methods.
For this reason, if a business does not have in-depth support from related party transaction advisory services, these seemingly minor errors can quickly accumulate into serious tax risks, leading to penalties, back taxes, and even tax assessments during audits.
Unforeseeable Risks If You Don’t Hire a Professional Related-Party Transaction Advisor
Refusing to hire a related-party transaction advisor can lead to extremely serious consequences:
Tax Assessment: A Financial Nightmare
Pursuant to Paragraph 3 of Article 21 of Decree No. 255/2026/ND-CP, the tax authority has the authority to determine prices, profit margins, profit allocation ratios, taxable income, or the amount of corporate income tax due in various circumstances. These circumstances include: the taxpayer failing to file a return, filing an incomplete or inaccurate return, or failing to submit Appendix I; failing to provide complete information in the transfer pricing documentation or failing to submit the documentation within the prescribed time limit; using information regarding independent transactions that is untruthful, inaccurate, or fails to clearly state its source.
The deadline for submitting documentation to determine the price of related-party transactions, when requested by the tax authority, is no more than 30 working days. If there is a valid reason, the deadline may be extended once for no more than 15 working days (Clause 4, Article 18).
Pursuant to Point c, Paragraph 2, Article 8, when the tax authority makes an adjustment or assessment, the adjusted or assessed value is the median value of the standard arm’s-length transaction range, i.e., the 50th percentile (Paragraph 9, Article 4). In other words, if a business cannot demonstrate a reasonable position within the arm’s-length range, it will be subject to the median value. This risk can be mitigated by engaging a professional transfer pricing consultant from the outset.
Back taxes and hefty late-payment penalties
Without the support of related party transaction advisory unit In the professional sector, businesses may face extremely severe financial penalties under the Tax Administration Law:
- Administrative penalties for tax violations: The standard penalty is 20% of the amount of underreported tax or the amount of tax exemptions, reductions, or refunds that exceed the prescribed limits.
- Late-payment penalty: Calculated at a rate of 0.03% per day based on the amount of tax paid late.
For example: Suppose a company is required to pay 10 billion VND in back corporate income tax from three years ago. The penalty under Decree 20% is 2 billion VND. Late payment interest (approximately 11% per year × 3 years) is about 3.3 billion VND. The total additional amount due comes to 15.3 billion VND.
Heavy tax penalties resulting from a failure to engage a consultant for related-party transactions would be a “black mark” on the global transparency report, directly affecting the confidence of shareholders and international investors.
This is too high a price to pay and could result in a serious cash flow shortfall compared to the cost of hiring a related-party transaction advisor from the outset.
Loss of the right to self-defense and placement on the high-risk list
The lack of expert support Related party transaction compliance consulting This will make the business’s record-keeping system “vulnerable” and lack credibility during audits. Once the tax authority imposes an assessed value, the business will immediately be placed on the list of “high-tax-risk entities.” As a result, the frequency of audits for all types of taxes will increase in the future, causing business operations to remain in a state of constant uncertainty and pressure. Proactively engaging a transfer pricing consultant is a sound investment to protect the business and ensure sustainable growth.
The Significant Benefits of Hiring a Related-Party Transaction Advisor
The decision to hire a related-party transaction consultant provides strategic value that the internal accounting department would find difficult to achieve on its own:
Optimizing Tax Obligations Within the Legal Framework
Hiring a related-party transaction consultant is not only for documentation purposes but also helps businesses review their operational structure. For example, according to Clause 3 of Article 16 of Decree 255/2026/ND-CP, the total deductible interest expense—after deducting interest on deposits and interest on loans incurred during the period by the taxpayer—is deductible when determining taxable income for corporate income tax purposes, provided it does not exceed 30% of the total net profit from business operations during the period plus interest expense after deducting interest on deposits and interest on loans incurred during the period, plus the taxpayer’s depreciation expenses incurred during the period.
Taxpayers shall report the interest expense ratio for the period in accordance with Appendix I issued pursuant to the Decree (point d, paragraph 3, Article 16).
Important Note: Taxpayers who are exempt from filing a tax return and from preparing a transfer pricing documentation file must still determine the total deductible interest expense in accordance with Article 16, Paragraph 3. When hiring a transfer pricing consultant, the consulting firm will help you optimize your capital structure to avoid the unintended disallowance of this expense.
Ensuring absolute compliance.
Related-party transaction documentation is very complex and consists of three levels. When hiring a related-party transaction advisor, the expert ensures consistency in:
- Country File (Local File): Detailed analysis of transactions in Vietnam.
- Global Group Master File: Information on the group-wide transfer pricing strategy.
- Country-by-Country Reporting (CbCR): Applies when the ultimate parent company has consolidated global revenue of 750 million euros or more in the fiscal year immediately preceding the reporting year (Article 19, Annex IV). The exchange rate is determined based on the central exchange rate or the average cross-rate for December of the year immediately preceding the reporting year, as published by the State Bank of Vietnam. The deadline for submission is no later than 12 months from the end of the ultimate parent company’s fiscal year.
Documentation establishing the price of related-party transactions must be prepared prior to the filing of the annual corporate income tax return and must be retained and presented upon request by the tax authorities.
Access to Accurate Benchmarking Data
Paragraph 3 of Article 17 of Decree No. 255/2026/ND-CP stipulates that databases shall be used in the following order of priority:
- Information and data from businesses disclosed publicly on the stock market; information and data disclosed on domestic and international commodity and service exchanges; information from the National Database; and information publicly disclosed by domestic ministries, agencies, or other official sources.
- Commercial database.
- Tax Administration Database.
The comparison group is also selected in order of priority:
- The taxpayer’s internal comparables;
- A person who is a resident of the same country or territory as the taxpayer;
- Finally, the target group consists of countries in the region with similar industrial conditions and levels of economic development.
The minimum number is 1, 3, or 5 items, depending on the degree of variation and the ability to eliminate material differences.
Assistance with explaining matters to the tax authorities
In particular, when a business engages MAN—Master Accountant Network—to provide transfer pricing advisory services, a team of experts will represent the business and assist in explaining the pricing methodologies, ensuring that the process is conducted in accordance with regulations.
Cost of Hiring a Related-Party Transaction Consultant in Ho Chi Minh City
The fee for hiring a related-party transaction advisor depends on the size of the business and the complexity of the transaction:
| Category | Job Details | Estimated fee (VND) |
| Review and Report | Classify all transactions and identify which ones involve related parties. Prepare the tax return. | 25,000,000 – 45,000,000 |
| Local File | FAR Analysis, Benchmarking, and Proposal Explanation. | 55,000,000 – 110,000,000 |
| Master File | Bilingual report, reconciling data between the parent company overseas and its subsidiary in Vietnam. | 45,000,000 – 75,000,000 |
| Support for tax inspectors | Work directly with the inspection team. | Agreement |
Note: The price list above is provided for general market reference only. Please contact MAN – Master Accountant Network for consultation, support, and a detailed quote!
Procedures for Hiring a Related-Party Transaction Consultant at MAN – Master Accountant Network
When a company decides to hire a related-party transaction consultant at MAN, the standard process typically involves the following steps:
- Risk Assessment (Gap Analysis): MAN reviews historical data and identifies high-risk “red zones”.
- Identifying Related Parties: Carefully review each transaction that could constitute a related-party transaction. Identify and clarify related parties in accordance with Decree No. 255/2026/ND-CP.
- Functional, Asset, and Risk Analysis (FAR Analysis): Understanding the roles, responsibilities, and risks involved. Simultaneously examining the economic nature of the business's transactions and operations.
- Selecting a pricing method: Choose the method that is most appropriate for the industry in which the business operates. In addition, provide a logical rationale for why this method was chosen.
- Benchmarking: To confirm that prices in related-party transactions are reasonable, objective, and consistent with the arm’s-length principle, MAN implements an in-depth data analysis process. Through this process, the company identifies a safe profit margin or standard profit margin based on market benchmarking data, with key steps including identifying comparable independent companies and utilizing data sources in accordance with the order of priority set forth in Article 17 of the Decree.
- Reporting and Completing the Documentation: Report information on related-party relationships and transactions in accordance with Appendix I and submit it along with the Corporate Income Tax Return.
- Support in explaining and clarifying: We accompany businesses that have hired a related-party transaction consultant throughout all their meetings with the tax authorities.
Conclude
By 2026, transparency in related-party transactions will be mandatory. Proactively engaging a related-party transaction advisor now is the smartest investment you can make to protect your business’s achievements. Don’t let small mistakes lead to massive back taxes.
Contact MAN – Master Accountant Network For free support and advice!
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- E-mail: man@man.net.vn
- Google Business Profile: View MAN – Master Accountant Network's Google Business Profile
- LinkedIn Founder: View expert Le Hoang Tuyen's LinkedIn profile.
Responsible for production and professional content review by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network. He is a CPA Vietnam auditor with over 30 years of in-depth experience in accounting, auditing, taxation, and corporate legal consulting.
Frequently Asked Questions About Hiring a Related-Party Transaction Advisor
Below is a summary of the practical issues that businesses often encounter when fulfilling their tax obligations and deciding to hire a transfer pricing consultant:
Can interest expenses that exceed 30% EBITDA be carried forward to the next year?
Yes. According to Point b, Clause 3, Article 16 of Decree No. 255/2026/ND-CP: “The portion of interest expenses that is not deductible under the provisions of subparagraph a of this paragraph shall be carried forward to the next tax period when determining the total deductible interest expenses, provided that the total deductible interest expenses incurred in the next tax period are lower than the amount specified in subparagraph a of this paragraph. The carryover period for interest expenses shall be continuous and shall not exceed 5 years, starting from the year following the year in which the non-deductible interest expenses were incurred. Specifically, businesses currently subject to the transitional provisions under Article 3 of Decree No. 20/2025/ND-CP may continue to carry forward the costs for the remaining period (paragraph 3 of Article 23).”.
Why do tax authorities typically reject intra-group service transactions?
According to Point a, Clause 2, Article 16 of Decree No. 255/2026/ND-CP, service costs between related parties are deductible only if they meet all of the following conditions. First, the service must have commercial, financial, or economic value and directly support the taxpayer’s business operations. Second, the service must be provided under conditions similar to those under which independent parties would pay for such services. Third, service fees must be paid based on the arm’s-length principle, and the calculation or allocation method must be applied consistently throughout the group. In addition, the taxpayer must provide contracts, supporting documents, invoices, and information regarding the calculation method, allocation factors, and the group’s pricing policy.
If a subsidiary in Vietnam operates at a loss but the parent company continues to collect royalty fees, what are the risks?
Paragraph 1 of Article 16 of Decree No. 255/2026/ND-CP stipulates that expenses related to related-party transactions that do not reflect the nature of an arm’s-length transaction or do not contribute to generating revenue, or income from the taxpayer’s production and business activities shall not be included in deductible expenses. Point a of Paragraph 2 of Article 10 also requires that the analysis of intangible assets not be based solely on legal ownership but must take into account the entire scope of risk management activities and financial capacity related to the development, enhancement, maintenance, protection, and exploitation of intangible assets.
Which source is the safest for benchmarking?
According to Paragraph 3 of Article 17 of Decree No. 255/2026/ND-CP, publicly available data from the securities market, commodity and service exchanges, the National Database, and other official sources takes precedence. Next are commercial databases, followed by tax administration databases. Additionally, pursuant to Point b of Paragraph 10 of Article 21, tax authorities rely on taxpayers’ reported data to publish industry profit margins by sector, geographic area, or taxpayer group, with the aim of assisting taxpayers in filing their returns. Data collected online from unknown sources is typically rejected, as Paragraph 3 of Article 18 requires that data used as the basis for analysis must clearly state its source.
Can the pricing method be changed from year to year?
It is possible, but a very convincing explanation is required. Article 12 of Decree 255/2026/NĐ-CP requires that the method for determining the price of related-party transactions be applied consistently throughout the entire production and business cycle and phase, in accordance with the nature of the transaction and the taxpayer’s functions. Therefore, any change must be linked to a substantive change, such as a shift in the business model from manufacturing to distribution.