The voluntary compliance assistance program under Decree 255 is a notable new provision in the tax administration framework for businesses engaged in related-party transactions. Pursuant to Paragraph 10 of Article 21 Decree 255/2026/ND-CP, the tax authority develops and implements a program to support taxpayers in voluntary compliance for businesses engaged in related-party transactions, based on risk management, the capacity of the tax sector’s database system, and legal provisions on tax administration.
This regulation shows that the management of related-party transactions is not limited to audits, inspections, or the handling of non-compliance cases. Decree 255 also establishes a mechanism for tax authorities to assist taxpayers in improving compliance and reducing risks during the process of filing returns and determining transfer prices.
So, under what principles is the voluntary compliance support program under Decree 255 implemented? What are the tax authorities’ responsibilities? How are the database and industry profit margins used? What should businesses keep in mind when participating in the program? The following analysis addresses each of these issues based on Decree 255/2026/NĐ-CP.
Where is the voluntary compliance support program under Decree 255 outlined?
Pursuant to Clause 10 of Article 21 of Decree No. 255/2026/ND-CP, provisions regarding compliance management and support for taxpayers engaged in related-party transactions are included in the scope of responsibilities and authorities of the tax authority in the administration of transfer pricing.
Specifically, Decree 255 stipulates:
The tax authority shall develop and implement a program to support taxpayers in voluntary compliance for businesses engaged in related-party transactions, based on a risk-management approach, in accordance with the capacity of the tax sector’s database system and the provisions of tax administration laws.
This is the direct legal basis for the voluntary compliance support program under Decree 255.
This content can be understood in terms of three main elements:
| Implementation Framework | Content |
| Risk Management | The program was developed and implemented based on risk management principles |
| Tax Database | The implementation must be consistent with the database system's capacity. |
| Tax Administration Laws | Support activities must comply with legal regulations on tax administration |
Thus, Decree 255 does not stipulate that all businesses engaged in related-party transactions are automatically eligible for an exemption or reduction of their reporting and record-keeping obligations. The voluntary compliance support program under Decree 255 is a support mechanism developed and implemented by the tax authorities in accordance with the conditions and principles outlined above.
What does the voluntary compliance support program under Decree 255 include?
Paragraph 10 of Article 21 of Decree 255 stipulates four key provisions regarding compliance management and support for taxpayers engaged in related-party transactions.
Develop a support program based on risk management
First, the tax authority is responsible for developing and implementing a program to support taxpayers in achieving voluntary compliance with regard to businesses engaged in related-party transactions. The program is based on:
- Risk management;
- The responsiveness of the tax sector's database system;
- Legal Provisions on Tax Administration.
Points to note: Decree 255 adopts a risk-based approach. Consequently, the management of businesses engaged in related-party transactions is integrated into the overall tax administration framework, which is based on information, data, and risk levels.
This is also consistent with the general principles set forth in Decree 255, under which tax authorities manage and audit transfer pricing in accordance with the principles applicable to tax administration and tax audit as stipulated in the Law on Tax Administration.
Publishing Industry Profit Margins to Support Taxpayers
Another notable provision of the voluntary compliance support program under Decree 255 is that tax authorities may use taxpayers’ reported data to publish industry profit margins based on:
- By sector;
- Each area;
- Or a group of taxpayers.
The purpose clearly defined by Decree 255 is to support taxpayers reporting and determining the price of related-party transactions in accordance with the arm's-length principle.
This information has practical significance for businesses when evaluating transfer pricing policies. However, it is important to distinguish between the tax authority’s publication of industry profit margins for guidance purposes and a business’s automatic reliance on a published profit margin as the basis for determining transfer pricing in all cases.
Decree 255 still requires that the reporting and determination of related-party transaction prices comply with the arm’s-length principle, the analysis and comparison principle, and the methods for determining related-party transaction prices as prescribed.
How do tax authorities help businesses reduce compliance risks?
Pursuant to Point c of Clause 10 of Article 21 of Decree 255, when a taxpayer participates in the voluntary compliance support program under Decree 255, the tax authority assists the taxpayer in improving compliance and reducing risks related to tax filing and the determination of transfer pricing.
As can be seen, this mechanism focuses on two issues:
First, improve compliance
Businesses engaged in related-party transactions must ensure that the reporting and determination of related-party transaction prices are carried out in accordance with regulations. Decree 255 requires taxpayers to demonstrate that they have conducted an analysis, comparison, and selection of methods for determining the prices of related-party transactions; and to report information on related-party relationships and transactions in accordance with the prescribed schedules.
Second, reduce risks in reporting and pricing
Risks in related-party transactions may arise from various factors, such as the identification of related-party relationships, the identification of related-party transactions, the selection of comparables, the selection of pricing methods, or the use of inappropriate data.
Therefore, businesses need to establish procedures for controlling data and records of related-party transactions from the outset, rather than only addressing them when a request for clarification is received from the tax authorities.
Does the voluntary compliance support program under Decree 255 include data privacy requirements?
Yes. Point d of Paragraph 10 of Article 21 of Decree 255 provides:
The tax authority is responsible for safeguarding the information and data provided by taxpayers when they participate in the voluntary compliance assistance program under Decree 255, in accordance with the law..
This is a key component of the voluntary compliance support program mechanism under Decree 255.
For businesses with related-party transactions, the information used in the analysis may typically relate to:
- Relationships among affiliated parties;
- Transaction value;
- Pricing Policy;
- Functions, assets, and risks;
- Financial Information;
- Comparative data;
- Documents for determining transfer pricing.
Therefore, the regulations on the responsibility to maintain information confidentiality provide a legal basis for businesses to provide information and data within the scope of the program, as prescribed.
What does the database for tax reporting and price determination include?
Pursuant to paragraph 1 of Article 17, the databases used in the reporting and determination of transfer prices for taxpayers include:
- A commercial database as defined by the Law on Tax Administration and other laws governing tax administration;
- Company information and data are publicly disclosed on the stock market;
- Information and data published on domestic and international commodity and service exchanges;
- National Database Information;
- Information publicly disclosed by domestic ministries, agencies, or other official sources.
With regard to tax authorities, paragraph 2 of Article 17 stipulates that the databases used in the administration of transfer pricing include the databases mentioned above and the tax administration databases established under the Law on Tax Administration and other laws on tax administration.
Database priority order
Decree 255 also stipulates the order of priority for using databases:
- Information and data publicly disclosed by businesses on the securities market; information on domestic and international commodity and service exchanges; the National Database; and information publicly disclosed by ministries, agencies, or other official sources.
- Commercial database.
- Tax Administration Database.
The use of data must comply with the principles of analysis and comparison set forth in Article 6 of Decree 255.
This is a point businesses should keep in mind when preparing a comparative analysis for a related-party transaction. It’s not enough to simply have the data; businesses must also consider data sources, validity, and principles of analysis and comparison.
What steps should businesses with related-party transactions take to improve compliance?
The voluntary compliance support program under Decree 255 does not replace businesses’ compliance obligations. Pursuant to Article 18 of Decree 255, taxpayers are required to report and determine the prices of related-party transactions in a manner that does not reduce their corporate income tax liability in Vietnam; demonstrate the analysis, comparison, and selection of the method used to determine the prices of related-party transactions; report information in accordance with the schedules; and prepare, maintain, and provide the related-party transaction pricing documentation as prescribed.
Therefore, businesses should review at least the following job categories:
| Content to be reviewed | Compliance Objectives |
| Relationship | Determine whether the business falls within the scope of application |
| Affiliate transactions | Identify all transactions that have occurred |
| Filing Appendix I | Ensure that the information provided is complete and accurate |
| Comparative Analysis | There is a basis for determining the transaction in accordance with the arm's-length principle |
| Pricing method | Choose the option that best suits the nature of the transaction |
| Comparative Data | Identify data sources and assess their suitability |
| Transfer pricing determination dossier | Prepare, maintain, and provide in accordance with regulations |
| Consistency | Ensure that the figures in the financial statements, tax returns, and pricing documentation are consistent and verifiable |
For businesses that do not yet have a dedicated department for related-party transactions, conducting an early review can help identify any non-compliance issues before the tax filing deadline or when the tax authority requests information.
Businesses can refer to this. related party transaction advisory services to assess the scope of application, pricing methods, and compliance risks under Decree 255.
Why should businesses pay attention to the voluntary compliance support program under Decree 255?
Decree 255 implements a mechanism for managing related-party transactions that relies heavily on data, comparative analysis, and risk management. As a result, the standardization of related-party transaction information plays a more important role in compliance efforts.
Businesses should take the initiative:
- Review of Related-Party Relationships: Identify related parties in accordance with Article 5 of Decree 255.
- Transaction Review: Fully identify transactions involving the purchase and sale of goods, the provision of services, borrowing, lending, financial transactions, the transfer of assets, and other transactions falling within the scope of the regulations.
- Data Review: Identify the data sources used for analysis and comparison.
- Pricing Policy Assessment: Review transaction prices and profit margins based on the arm’s-length principle.
- Record Standardization: Ensure that information, documents, and data can be accounted for when necessary.
- Data Reconciliation: Verify consistency between related-party transaction records, financial statements, accounting ledgers, and tax return records.
If a business is required to prepare documentation, it may refer to Transfer pricing documentation services to support data review, comparative analysis, and the preparation of reports in accordance with current regulations.
Conclude
The voluntary compliance support program under Decree 255 is stipulated in Clause 10 of Article 21 of Decree 255/2026/ND-CP, according to which tax authorities shall develop and implement a program to support taxpayers in voluntary compliance for businesses engaged in related-party transactions, based on risk management, the capacity of the tax sector’s database system, and tax administration laws.
This mechanism involves the tax authority assisting in improving compliance and reducing risks in tax filing and the determination of transfer pricing; using reported data to publish industry profit margins by sector, geographic area, or taxpayer group; while ensuring the confidentiality of information and data provided by taxpayers when participating in the program, in accordance with the law.
In addition to the support mechanisms, businesses must still fully comply with their obligations to report, analyze, determine prices, and prepare documentation for related-party transactions in accordance with regulations, except in cases eligible for exemption under Article 20 of Decree 255.
Decree No. 255/2026/NĐ-CP was issued on June 30, 2026, and took effect on July 1, 2026. Businesses engaged in related-party transactions should update themselves on the new regulations, review their related-party relationships, resulting transactions, comparative data, and compliance records to proactively manage tax risks.
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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.