Below is a collection of 50 frequently asked questions regarding Decree No. 255/2026/ND-CP on tax administration for related-party transactions that businesses need to be aware of:
General Provisions
What does Decree No. 255/2026/NĐ-CP stipulate?
The Decree stipulates the main provisions regarding tax administration principles; the identification of related-party relationships; tax filing; transfer pricing, comparable data, transfer pricing documentation, and the country-by-country report; as well as the responsibilities of tax authorities, taxpayers, and other relevant agencies.
When was Decree No. 255/2026/NĐ-CP issued and when did it officially take effect?
The Decree was issued by the Government on June 30, 2026, officially took effect on July 1, 2026, and applies starting with the 2026 corporate income tax filing period.
Businesses that engage in related-party transactions must comply with the provisions of the Decree to file reports, determine prices, and fulfill other related obligations.
Does Decree No. 255/2026/NĐ-CP completely replace all previous regulations on related-party transactions?
Decree No. 255/2026/NĐ-CP essentially retains the provisions of Decree No. 132/2020/NĐ-CP and Decree No. 20/2025/NĐ-CP.
In addition, the Decree has amended and supplemented certain provisions to ensure consistency with the Tax Administration Law No. 108/2025/QH15, alignment with international principles and practices regarding the administration of transfer pricing, while also being consistent with practical conditions and the legal framework of Vietnam.
Which businesses need to be aware of Decree No. 255/2026/NĐ-CP?
Businesses should pay attention to the Decree if they have related-party relationships and engage in related-party transactions as defined by the regulations. Common examples include:
- Enterprises with ownership, capital contribution, management, or control relationships;
- Transactions with parent companies, subsidiaries, and other entities within the same group;
- Transactions involving borrowing, lending, borrowing from, lending to, providing guarantees, or other transactions with related parties.
- Businesses that are members of a multinational corporation also need to review their obligations related to the Global Reporting Initiative and the Country-by-Country Report.
What are the new developments regarding tax administration principles for related-party transactions?
The Decree amends and supplementing the principles governing the tax authorities’ administration and audit of transfer pricing in accordance with the guidelines referencing the principles applicable to tax administration under Clause 4 of Article 6 and the principles of tax audit under Clause 1 of Article 22 of the Tax Administration Law No. 108/2025/QH15. The amendments aim to ensure that the regulations on the administration and audit of transfer pricing are consistent with the Tax Administration Law.
Which terms does the decree add or clarify?
The Decree supplements and refines the following terms:
- Ultimate parent company;
- Tax treaty;
- Related-party transactions;
- Country Profile;
- Global Profile;
- The situation involves a lack of systematic information exchange.
The refinement of terminology is intended to ensure consistency with the regulations on supplementary corporate income tax, the Tax Administration Law, and other relevant legal documents.
Identify the relationship
What new provisions does the decree add regarding lending and borrowing transactions?
The Decree adds borrowing and lending transactions to the criteria for determining related-party relationships, similar to loan transactions. Accordingly, a business that engages in borrowing, lending, or lending and borrowing transactions involving at least 10% of the owners’ contributed capital at the time the transaction occurs during the tax period with an individual who manages or controls the business, or with an individual with whom the business has a relationship as defined by regulations, must assess whether a related-party relationship exists.
Why were borrowing and lending transactions added to the criteria for determining related-party relationships?
Previously, the new regulations focused on borrowing and lending transactions but did not clearly address borrowing and lending transactions.
This amendment is intended to fully reflect the nature of financial transactions, address practical difficulties, and ensure that the determination of related-party relationships does not depend solely on the name of the transaction.
Do interest-free borrowing and lending transactions need to be considered when determining affiliated relationships?
Yes, the Decree does not specify that the determination of a related-party relationship in this case depends on whether the transaction is for profit. A business must first determine the existence of a related-party relationship, which then gives rise to related-party transactions, and based on that, determine the tax obligations for such transactions in a manner equivalent to those for independent transactions under the same conditions.
How are the transaction thresholds for borrowing, lending, and other similar transactions determined for the purpose of assessing related-party relationships?
A creditor or guarantor that is a state-owned entity with 100% in authorized capital, whose function is to buy, sell, and resolve debts, shall not be deemed an affiliated party unless it directly or indirectly:
- Management;
- Control;
- Capital contribution;
- Invest in the debtor company or the guaranteed company.
What conditions must a business meet to qualify for the exemption from determining an affiliated relationship with a debt collection agency?
Enterprises must fully meet the conditions specified in Point d.3, Paragraph 2, Article 5 of the Decree, including:
- The creditor or guarantor is an organization in which the State owns 100% of the authorized capital;
- An organization whose functions include buying, selling, and managing debt;
- The organization does not, either directly or indirectly, manage, control, contribute capital to, or invest in the debtor enterprise or the guaranteed enterprise.
Databases Used in Determining Transfer Pricing
Which database sources does the decree add?
The Decree adds the National Database to the data sources used in the reporting, determination, and management of transfer pricing. This addition aims to expand the pool of reliable data sources for taxpayers and competent authorities to use in analyzing and comparing related-party transactions.
How does the decree specify the order of priority for using databases?
The databases are prioritized in the following order:
- First, the database is publicly available;
- Second, commercial databases;
- Third, the tax authority's database.
The use of data must ensure compliance with the principles governing the analysis and comparison of related-party transactions as prescribed.
Why does the Decree specify the order of priority for using databases?
The rules regarding order of priority are intended to:
- Ensure openness and transparency;
- Increase consistency in the selection of data sources;
- Minimize differences between taxpayers and tax authorities;
- Facilitate the analysis and comparison of related-party transactions.
Can taxpayers use commercial databases from the very beginning?
Taxpayers must follow the order of priority specified in the Decree. Accordingly, publicly available databases take precedence; next come commercial databases; and lastly, the tax authority’s database.
Selecting a database appropriate to the nature of each transfer pricing method and applying the principle of database selection priority appropriately.
When is the tax agency's database used?
The tax authority’s database is the data source used after publicly available databases and commercial databases, in the order of priority specified in the Decree.
Such use must comply with the provisions of the Tax Administration Law and ensure adherence to the principles of analyzing and comparing related-party transactions.
Taxpayers’ Rights and Obligations
Under which regulations are taxpayers’ rights regarding the reporting and determination of transfer pricing exercised?
Taxpayers’ rights regarding the reporting and determination of transfer pricing are governed by Article 37, Paragraph 1, of the Tax Administration Law No. 108/2025/QH15 and the relevant provisions of Decree No. 255/2026/NĐ-CP.
Under which regulations are taxpayers required to report and determine the prices of related-party transactions?
Taxpayers’ obligations are fulfilled in accordance with Article 37, Paragraph 2, of the Tax Administration Law No. 108/2025/QH15 and the provisions of the Decree.
Taxpayers are responsible for reporting and determining the prices of related-party transactions; preparing, maintaining, and providing documentation; and ensuring the accuracy, truthfulness, and completeness of the information.
Can a business hire a business organization that handles tax procedures to prepare a report determining the price of related-party transactions?
Yes. The Decree stipulates that taxpayers may use a business entity to handle tax procedures for preparing the documentation to determine the price of related-party transactions in accordance with the regulations.
When a company hires an organization to prepare a transfer pricing documentation file, is the company still liable?
Yes. Hiring a business entity to handle tax procedures or a consulting firm does not alter the taxpayer’s obligations and responsibilities. The business remains responsible for the information, documents, reported data, and the transfer pricing documentation.
Country-by-Country Reporting (CbCR)
How does the amended decree change the criteria for determining the revenue threshold for preparing the transfer pricing report?
The global consolidated revenue threshold is determined based on revenue for the fiscal year immediately preceding the reporting year.
Previously, the revenue threshold was based on global consolidated revenue for the tax period.
What is the revenue threshold for filing a cross-border profit report under the Decree?
The revenue threshold for filing a cross-border profit report is set at the equivalent of 750 million euros.
This regulation replaces the previous threshold of 18,000 tỷ đồng or more.
Why is the revenue threshold set at the equivalent of 750 million euros?
The regulation setting the equivalent amount at 750 million euros is intended to:
- In accordance with the OECD guidelines in BEPS Action 13;
- Minimize the impact of exchange rate fluctuations;
- Ensure consistency with international practices regarding cross-border profit reporting.
How is the exchange rate used to calculate the global consolidated revenue threshold determined?
The conversion rate is determined based on the central exchange rate or the average cross-rate for December of the year, as announced by the State Bank of Vietnam.
If a cross-border profit report has already been filed abroad, is a business in Vietnam automatically exempt from filing it?
No. Businesses in Vietnam are only exempt from filing the report if they meet specific conditions set forth in the Decree, such as when the report has been automatically exchanged with the Vietnamese tax authorities or has been filed on their behalf by an organization that fully meets the required conditions.
If the report has already been automatically exchanged with Vietnam, does the business in Vietnam still need to resubmit it?
You do not need to resubmit the report if it has been automatically exchanged with the Vietnamese tax authorities in accordance with the Agreement between the Competent Authorities and meets the prescribed conditions.
What is an organization that files a country-by-country report on behalf of another entity?
The reporting entity is a member of a multinational enterprise designated by the ultimate parent company to prepare and file the Transfer Pricing Report on behalf of the enterprise.
The designation and submission of the Report must meet the conditions specified in the Decree.
Under what circumstances is a business in Vietnam exempt from filing a report because another organization is filing it on its behalf?
Businesses in Vietnam are not required to file the Report if a designated representative has been properly appointed, has fully fulfilled its obligations, and meets the conditions for information exchange as prescribed. If these conditions are not met, businesses in Vietnam must file the Report in accordance with the provisions of the Decree.
How does the Decree specify additional cases where reporting requirements are waived due to differences between countries?
The Decree adds cases where a report need not be filed in Vietnam when discrepancies arise regarding:
- Revenue threshold;
- Conversion rate;
- Principles for determining revenue between countries and territories, provided the conditions set forth in the regulations are met.
Under what circumstances is the ultimate parent company not required to file a report in its country of residence, but the business in Vietnam is required to file one?
When the ultimate parent company is not required to prepare and file the report in the country where it is resident, a taxpayer in Vietnam may be required to file the report in accordance with the provisions of the Decree.
Under what circumstances does the failure to systematically exchange information give rise to a reporting obligation in Vietnam?
The obligation to file a report in Vietnam arises only when:
- There is a lack of systematic information sharing;
- And the taxpayer has been notified of this situation.
How do data protection requirements relate to reporting obligations in Vietnam?
A taxpayer is required to file a report in Vietnam only when Vietnam meets the requirements regarding:
- Data Security;
- Consistency;
- Use the information for its intended purpose.
Information regarding compliance with these conditions is publicly available on the Tax Authority’s website.
In what format are cross-border profit reports filed?
The report is prepared in an encrypted XML format and submitted via the Tax Management Information System.
When is the deadline for filing the Country-by-Country Report?
The deadline for submitting the report is no later than 12 months from the end of the fiscal year of the ultimate parent company for the reporting year.
A business must base its reporting on the fiscal year of the ultimate parent company, not on the fiscal year of the business in Vietnam, if the two fiscal years differ.
Which form should be used for the Notice Regarding Entities Required to File a Country-by-Country Report?
The notice was issued in accordance with Form No. 01/TB-BCLN, issued pursuant to Decree No. 255/2026/NĐ-CP.
Notice: How Many Times Must Report Filers Submit the Report?
The notification must be filed once when the obligation related to the Country-by-Country Report first arises, effective from the date the Decree takes effect. If the information changes, the taxpayer must file an updated notification.
When is the deadline for submitting the initial notification and the updated notification?
The deadline for submitting the initial notification is no later than the end of the fiscal year of the ultimate parent company for the reporting year. In the event of any changes to the information, including the termination of the obligation to file the report, an updated notification must be submitted no later than 90 days from the date the change occurred.
Exemption from preparing Transfer Pricing Documentation.
What are the new developments regarding exemptions from preparing a report to determine the price of related-party transactions?
The decree amends the conditions for exemption from filing documentation as follows:
- Raise the revenue threshold for taxpayers to less than 500 billion dong;
- Remove the criterion “business with simple functions”;
- Continue to apply the remaining conditions as prescribed.
The amendment aims to expand the group of low-risk taxpayers who are exempt from filing tax returns and to reduce compliance costs.
Does being exempt from preparing a report to determine the price of related-party transactions mean being exempt from reporting related-party transactions?
No. An exemption from the requirement to prepare a report determining the price of related-party transactions does not mean an exemption from:
- Identify the relationships;
- Reporting related-party transactions;
- Apply the arm's-length principle;
- I am responsible for the information provided.
Taxpayers must independently determine and are responsible for ensuring that they fully meet the conditions for exemption from filing a tax return.
Responsibilities of the Tax Authority and Compliance Assistance
Can tax authorities use the Country-by-Country Report to adjust transfer pricing?
No. The Decree stipulates that tax authorities shall not use the Transfer Pricing Report to adjust or determine the prices of related-party transactions.
The report is used for risk management, information exchange, and tax administration purposes in accordance with regulations and international commitments.
What does the decree stipulate regarding the voluntary compliance support program?
The tax authority shall develop and implement a program to support taxpayers in voluntary compliance for businesses engaged in related-party transactions, based on the following:
- Risk management;
- The responsiveness of the Tax Department’s database system;
- Legal Provisions on Tax Administration.
Can the tax authority publish industry profit margins to assist taxpayers?
Yes. The tax authority uses taxpayers’ reported data to publish industry profit margins by sector, geographic area, or taxpayer group to assist with tax filing and the determination of transfer pricing in accordance with the arm’s-length principle.
Is the information that businesses provide when participating in the compliance assistance program kept confidential?
Yes. The tax authority is responsible for maintaining the confidentiality of the information and data provided by taxpayers when they participate in the voluntary compliance assistance program, in accordance with the law.
What are the responsibilities of ministries, agencies, and local authorities in tax administration related to related-party transactions?
Ministries, ministerial-level agencies, and People’s Committees of provinces and cities are responsible for:
- Coordinate outreach efforts on tax administration for businesses engaged in related-party transactions;
- Provide information in accordance with specialized management functions;
- Connect, share data;
- Coordinate with tax authorities in the management of businesses engaged in related-party transactions.
Transitional provisions
How are interest expenses carried forward under Decree No. 20/2025/NĐ-CP treated?
Businesses eligible to carry forward interest expenses under Article 3 of Decree No. 20/2025/NĐ-CP may continue to carry them forward for the remaining period as prescribed. This provision is intended to ensure the continuity of the policy and protect the rights of taxpayers.
What should businesses keep in mind when continuing to capitalize interest expenses?
Businesses need:
- Determine the correct amount of interest expense to be carried forward;
- Track the remaining transition time;
- Ensure consistency of data between tax returns, accounting records, and financial statements;
- Carry out the transition in accordance with the prescribed conditions and deadlines.
Actions Businesses Need to Take Proactively
What steps must businesses take to comply with Decree No. 255/2026/NĐ-CP?
Businesses need to take the initiative:
- Review all links;
- Review transactions involving borrowing, lending, and loans;
- Fully and accurately report all related-party transactions that occur;
- Determine the obligation to prepare a report determining the price of related-party transactions;
- Review of cross-border profit reporting obligations;
- Comply with the notice and file the Country-by-Country Report on time;
- Stay informed about public announcements and guidelines from the tax authority.
What information do companies that are part of a multinational corporation need to share with their parent company?
Businesses need to exchange and collect at least the following information:
- Ultimate parent company;
- The country or territory where the ultimate parent company is domiciled;
- The fiscal year of the ultimate parent company;
- Global consolidated revenue;
- Obligation to File Reports Abroad;
- The organization submits the report on behalf of;
- Automatic exchange mechanism with Vietnam;
- Changes affecting the content of a submitted notification must be reported to the tax authority no later than 90 days from the date the change occurred.
What is the most important message for businesses engaged in related-party transactions?
Businesses must proactively and accurately identify related-party relationships, fully disclose information regarding such relationships and related-party transactions; prepare and maintain documentation for determining the prices of related-party transactions in accordance with regulations; review obligations related to the Country-by-Country Report; and ensure that comparative analyses of transfer pricing comply with the substance-over-form principle, as transactions determine tax obligations. Proactive compliance helps businesses minimize tax risks, increase transparency, and ensure stable production and business operations.
Important Note: This set of questions and answers is used for the purposes of public awareness and dissemination of the law. In cases where the general information provided differs from the provisions in legal documents, the provisions in the following shall apply:
- Law on Tax Administration No. 108/2025/QH15;
- Decree No. 255/2026/ND-CP;
- Relevant implementing guidelines.
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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.