Are transactions between a business and a household business owned by the wife considered related-party transactions?

Whether transactions between businesses and household businesses when buying and selling goods constitute related-party transactions is a matter of concern for many businesses, especially in cases where the husband is the business owner and the wife is the household business owner. Accurately determining the nature of the transaction helps businesses understand whether they need to declare and document related-party transactions and fulfill related tax obligations, thereby mitigating risks during tax audits and inspections.

Are transactions between a business and a household business owned by the wife considered related-party transactions?

In practice, transactions between businesses and household businesses are often conducted under the names of family members. In particular, cases where the husband is the business owner and the wife is the household business owner often raise concerns for businesses about whether the transactions between the two parties are considered related-party transactions, and whether they give rise to the obligation to declare and document related-party transactions.

To clarify this issue, let's consider the following specific situation with MAN – Master Accountant Network:

Are there any related-party transactions between the husband of the business owner and the wife of the household business owner involving the buying and selling of goods?

The determination of the current affiliation is based on Clause 2, Article 1 (Scope of application) and Point g, Clause 2, Article 5 (Parties with affiliation) of Decree 132/2020/ND-CP, as amended and supplemented by Decree 20/2025/ND-CP.

According to point g, clause 2, Article 5 of Decree 132/2020/ND-CP:

“"A related-party relationship arises when two businesses are jointly managed or controlled in terms of personnel, finance, and business operations by individuals who are related, including spouses.".

The key point lies in the subject matter; the regulations only apply to the relationship between two businesses. Meanwhile, a household business is not considered a business under current law. Therefore, the case where one party is a business (owned by the husband) and the other is a household business (owned by the wife) does not fall under the categories of related parties.

In other words, current law does not stipulate that business owners and household business owners who are married are considered affiliated parties. Therefore:

• Transactions between the business and the wife's household business are not related-party transactions.
• Taxpayers are not required to declare the Related Party Transaction Appendix when settling corporate income tax for this specific transaction.

This is an important update that reassures many business households about their declaration obligations. However, the principle of market pricing and complete, valid invoices and documents must still be followed, just like any other normal transaction.

Why does the marital relationship not give rise to related-party transactions in this case?

Many people mistakenly believe that as long as two parties are related, especially spouses, any transactions between them are considered related-party transactions. However, this understanding is inaccurate.

Regulations on related-party transactions focus on the control, influence, or management relationship between the parties within the scope of application. The marital relationship between two individuals is not the sole basis for determining a related-party transaction.

Specifically:

• Transactions between businesses and household businesses involve two different business entities.
• The business owner and the household business owner are married but do not fall under the category of affiliated parties as stipulated in current regulations.
• The buying and selling of goods between two parties does not automatically become a related-party transaction simply because they are family members.

Therefore, evaluation should be based on legal regulations rather than solely on the personal relationship between the parties.

Does a business need to declare related-party transactions when purchasing goods from its wife's sole proprietorship?

In the case of transactions between a business and a household business, where the business owned by the husband purchases goods from the household business owned by the wife, the business is not required to declare the related-party transaction appendix in its corporate income tax return if the transaction only arises from a normal goods buying and selling relationship.

However, transactions between businesses and household businesses still require that all relevant documents related to the buying and selling activity be fully completed, such as:

• Contract for the sale of goods;
• Legitimate invoices and documents;
• Goods delivery and receipt records;
• Payment documents as required;
• Documents proving the actual purchase and sale transaction.

Transactions between businesses and household businesses that do not fall within the scope of related-party transactions do not mean that businesses can disregard the requirements regarding the validity of expenses and accounting and tax documents.

Cases identified as related-party transactions in 2026

To understand why the above case is not considered a related-party relationship, it should be compared with the complete list of related-party relationships as stipulated in Clause 2, Article 5 of Decree 132/2020/ND-CP (amended by Decree 20/2025/ND-CP): 

• 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 business is the largest shareholder in terms of capital contribution and directly or indirectly holds at least 10% of the total shares of the other business.
• A business entity may guarantee or lend capital to another business entity in any form, provided that the total outstanding loan balance is at least equal to 25% of the owner's equity of the borrowing business and accounts for more than 50% of the total outstanding medium and long-term debt of the borrowing business.
• One business may appoint a member of the executive board on a 50%, or designate a member with the authority to make decisions regarding the financial/business policies of the other business.
• Two companies may have more than one 50% board member, or both may have a board member with the authority to make financial/business policy decisions, appointed by a third party.
• Two businesses are managed or controlled in terms of personnel, finance, and business operations by individuals with family relationships: spouses; biological parents, adoptive parents, stepfathers, stepmothers, parents-in-law; biological children, adopted children, stepchildren, daughters-in-law, sons-in-law; siblings and their corresponding relationships; paternal and maternal grandparents; grandchildren; aunts, uncles, and nieces/nephews.
• The two businesses are related as head offices and permanent establishments, or both are permanent establishments of a foreign organization or individual.
• Businesses are controlled by an individual through capital contribution or direct involvement in management.
• Other cases where one business is subject to the de facto management, control, and decision-making power over the production and business activities of another business.
• Businesses that have transactions involving the transfer/receipt of capital contributions of at least 25% capital contributions in the tax period; or borrowing or lending of at least 10% capital contributions at the time of the transaction with individuals managing or controlling the business or with individuals belonging to family relationships as stated in item (7).
• Credit institutions with their subsidiaries, controlling companies, or affiliated companies as defined by the Law on Credit Institutions.

Regarding the criteria for family relationships, they are all linked to businesses and do not extend to household businesses. This is why transactions between the business and the wife's household business fall outside the scope of regulation. 

Important notes to avoid confusion regarding compliance obligations.

Transactions between businesses and household businesses only apply to the buying and selling of goods between businesses and household businesses. However, this boundary can easily change if the family business model develops or undergoes restructuring. Several situations require special attention:

• Converting a household business into a company: When both parties are businesses and are under the control of both spouses, a related-party relationship is formed, leading to the obligation to declare related-party transactions. 
• The occurrence of loan or lending relationships, cross-contribution of capital between family members according to the thresholds in items (4) and (11). 
• Unreasonable purchase and sale prices compared to market rates: Even if it's not a related-party transaction, tax authorities can still review the reasonableness of expenses, invoices, and the nature of the transaction.

Even minor errors in identifying related-party relationships or a lack of documentation proving market prices can lead to tax arrears, tax assessments, and penalties during inspections. 

What steps should businesses take to ensure compliance with regulations regarding related-party transactions?

To minimize errors, businesses should proactively:

• Check the list of parties that had transactions during the year;
• Compare this with the cases identified as affiliated parties;
• Maintain complete records and documents proving the transaction;
• Monitor changes in tax policies related to related-party transactions.

For businesses that do not have a team specializing in tax matters, consulting a tax expert is recommended. related party transaction advisory services This can help review related party relationships, assess declaration obligations, and mitigate risks during the tax settlement process.

In cases where a business is subject to the obligation as stipulated by regulations, the Create related party transaction records Providing complete documentation will help businesses demonstrate their pricing methodology and the appropriateness of the transaction when requested by the tax authorities. 

Conclude

Transactions between businesses and household businesses involving the buying and selling of goods are not considered related-party transactions. Determining whether a transaction falls within the scope of related-party transactions requires consideration of criteria such as the relationship between the business and the individual, the ability to control or influence the transaction, and conditions stipulated by current tax laws.

To mitigate operational risks, businesses should proactively review all parties involved in transactions, accurately assess tax obligations, and stay updated on relevant regulations. For complex cases or those involving multiple related-party transactions, consider the following: Contact MAN – Master Accountant Network now To receive expert advice and support to help businesses control risks, ensure compliance, and proactively interact with tax authorities.

References: Law Library

Contact information MAN – Master Accountant Network

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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.

Answering questions about transactions between the husband of a business owner and the wife of a sole proprietor.