Declaring related party transactions on the HTKK according to Decree 132/2020/ND-CP: Regulations and Exemptions

Declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP is not only a mandatory procedure but also a "shield" to help businesses minimize the risk of collection and penalties. However, not all cases of related-party transactions must be declared; businesses can be exempted if they meet the conditions of the provisions of Decree 132/2020/ND-CP. This article will help businesses understand the regulations, as well as which cases must declare related-party transactions on the HTKK according to Decree 132/2020/ND-CP and which cases are exempted from declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP.

Board: Summary of cases of declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP and exemption from preparing the dossier

What is the declaration of related party transactions on the HTKK according to Decree 132/2020/ND-CP?

Declaration affiliate transactions on HTKK according to Decree 132/2020/ND-CP is the act of enterprises declaring transactions arising with related parties directly on the Tax Declaration Support Software (HTKK), along with the corporate income tax finalization declaration. During this process, enterprises log in to HTKK, select the corporate income tax finalization declaration form 03/TNDN, select the "There are related party transactions" item and fill in all information in the appendix as required. This form of declaring related party transactions on HTKK according to Decree 132/2020/ND-CP helps data to be sent directly to tax authorities quickly, accurately and in compliance with legal regulations. Declaring related party transactions on HTKK according to Decree 132/2020/ND-CP helps synchronize data and minimize errors compared to manual filling.

According to the provisions of Decree 132/2020/ND-CP, all enterprises that have related-party transactions during the tax period are obliged to declare related-party transactions on the tax declaration system according to Decree 132/2020/ND-CP, specifically: 

• Identify, summarize and declare in Form 01, 02, 03 on HTKK.
• Submit with corporate income tax return.
• In case of exemption (according to conditions on revenue, interest, or domestic transactions with the same tax rate), it is still necessary to mark the exemption information on the tax declaration to ensure transparency.

How to fill out the Appendix to declare related party transactions on the HTKK according to Decree 132/2020/ND-CP

To complete the Appendix to declare related-party transactions on the HTKK according to Decree 132/2020/ND-CP, enterprises need to fully prepare information and enter data on the software.

In the process of declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP, the first important preparation step is that the enterprise must make a complete list of related parties according to the criteria in Article 5 of Decree 132/2020/ND-CP. This list must clearly state the name of the enterprise, tax code (MST), country or territory where the related party registers to operate to ensure transparency and compliance with regulations.

When declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP, enterprises need to fully summarize the value of each transaction arising in the tax period. These transactions include: 

• Buying and selling goods, providing services, borrowing or lending capital
• Transfer or license the use of tangible and intangible assets (such as copyrights, patents, trademarks). 

At the same time, enterprises must determine the transaction pricing method according to the principle of independent transactions prescribed in Article 7 of Decree 132/2020/ND-CP. Some common methods include: Comparing independent transaction prices (CUP), resale price (RPM), cost plus profit (CPM), comparing net profit (TNMM) or profit allocation (PSM).

Procedure for filling out the Appendix to declare related-party transactions on the HTKK according to Decree 132/2020/ND-CP

To help businesses visualize the implementation steps, below is a table of procedures for declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP. This table summarizes each step in detail, from opening the HTKK software, choosing the appropriate appendix template, entering related-party transaction data to exporting and submitting via the General Department of Taxation's electronic information portal.

Board: Procedure for declaring related party transactions on the HTKK according to Decree 132/2020/ND-CP

Thus, complying with the correct procedures for declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP not only helps businesses fulfill their tax obligations on time but also minimizes the risk of errors and avoids penalties during inspections and audits. Businesses need to maintain consistency between declared data, financial reports and related-party transaction records to ensure transparency and credibility in tax administration.

Appendix I related party transactions on the stock exchange according to Decree 132/2020/ND-CP

Section I: Information of related parties 

In the appendix declaring related-party transactions, enterprises need to provide full information identifying related parties, based on the criteria for determining related-party relationships specified in Article 5 of Decree 132/2020/ND-CP.

In this section, taxpayers must declare related-party transactions on the HTKK according to Decree 132/2020/ND-CP detailing the name of each related party, along with the tax code (MST), the country or territory where the operation is registered, and basic contact information (if any). At the same time, it is necessary to identify and express the form of related-party relationship according to the prescribed symbol system (A, B, C, D, Đ, E, G, H, I, K), in which each symbol reflects a specific type of relationship such as: capital ownership, control rights, loan guarantees or economic dependence.

Fully and accurately declaring related party transactions in Section I is important, helping tax authorities clearly identify the network of related parties of the enterprise. This is the basis for comparing and checking the reasonableness of transaction prices, while ensuring that enterprises comply with the principle of transparency as well as the provisions of Decree 132/2020/ND-CP. When making declarations, taxpayers need to pay special attention to the following points:

• In case the affiliate in Vietnam is an organization, the declaration information must be recorded according to the business registration certificate. If it is an individual, use the information on the passport or citizen identification card to declare.
• In cases where the related party is an organization or individual outside the territory of Vietnam, the declared information must be based on documents identifying the related relationship, such as transaction agreements, contracts or business registration certificates.
• If you are an organization or individual operating in Vietnam, you need to fill in the full Tax Code (MST).
• In case the related party is an organization or individual outside the territory of Vietnam, it is necessary to fully declare the tax code and taxpayer identification code; if not available (must clearly state the reason).

Section II: Cases exempted from declaration and exemption from preparing transfer pricing documents

Cases where enterprises are exempted from the obligation to declare related-party transactions or from preparing documents to determine the price of related-party transactions are specifically regulated as follows:

Case 1: Exemption from declaring related transactions on the HTKK in Section III and Section IV

Taxpayers are exempted from declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP in Sections III and IV of Appendix I on related-party transactions, and are also exempted from preparing documents to determine the price of related-party transactions if during the tax period, there are only transactions with related parties that are CIT payers in Vietnam, on the condition that both parties apply the same CIT rate and neither party enjoys tax incentives.

Case 2: Exemption from preparing transfer pricing documents

Taxpayers are exempted from preparing transfer pricing documents in the following cases:

• There are related party transactions but the total revenue in the tax period is less than VND 50 billion/year and the total value of all related party transactions arising in the period is less than VND 30 billion/year. 
• Signed an advance pricing agreement (APA) according to Circular 201/2013/TT-BTC;
• Enterprises carry out business activities with basic functions (production according to orders, therefore, do not bear inventory risks). In addition, they do not have to bear any costs arising during the operation process. In addition, they must have annual revenue of less than 200 billion VND (not including revenue from exploitation and use of intangible assets such as royalties), as well as EBIT regulations of each industry: Distribution industry from 5% or more; Manufacturing industry from 10% or more; Processing industry from 15% or more

Section III: Information on determining transfer pricing

In the process of declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP, Section III of the appendix is used for enterprises to present the method of determining prices for transactions arising with related parties, ensuring compliance with the principle of independent transactions according to Articles 6 and 7 of Decree 132/2020/ND-CP.

In this section, taxpayers must clearly state the method of determining the price applied for each type of transaction, such as the comparable uncontrolled price method (CUP), resale price method (RPM), cost plus profit method (CPM), net profit comparison method (TNMM) or profit allocation method (PSM). At the same time, enterprises must provide information on the data sources used for reconciliation, including financial statements, commercial databases, industry information or data from similar independent transactions.

In addition, Section III is also where enterprises record the results of price comparison or profit margin between related-party transactions and independent transactions, and explain the reasons for any differences (if any). In cases where they are exempted from filing according to Article 19 of Decree 132/2020/ND-CP, taxpayers must still tick the corresponding box for the tax authority to record.

Full, transparent and accurate declaration in Section III not only helps tax authorities assess the reasonableness of transfer pricing but also serves as a basis to protect enterprises from the risk of being taxed or administratively sanctioned.

Section IV: Business results after determining transfer pricing

In the declaration of related party transactions on the HTKK according to Decree 132/2020/ND-CP, this is the part that shows the profit picture of the enterprise after applying the valuation method according to the principle of independent transactions (declared in Section III) and making the necessary transfer pricing adjustments. The data in this section is considered the "final result", used to compare with the corporate income tax finalization declaration, so it is necessary to ensure consistency with the financial statements and the entire working records of the enterprise.

When preparing Section IV, the enterprise needs to start from the original accounting data of the period, including: net revenue, cost of goods sold, selling and administrative expenses, financial expenses, income and other expenses. From there, the enterprise proceeds to separate between related transactions and independent transactions to determine the scope that needs to be adjusted.

Based on the selected method (CUP, RPM, CPM, TNMM, PSM) and the independent comparison range, the enterprise calculates the price adjustment or profit margin for each transaction group. The adjustment may include: increasing affiliate revenue, reducing cost of goods sold or internal service costs, adjusting royalties, or internal interest expenses... to bring the results to a price and profit margin consistent with the principle of independent transactions.

After making adjustments, the enterprise re-establishes the profit and loss report for the tax period, clearly showing the following post-adjustment indicators: revenue, cost of goods sold, gross profit, deductible selling and administrative expenses, financial expenses (note the limit on loan interest deduction according to current regulations), other income, EBIT, EBITDA and taxable income after transfer pricing adjustment.

Cases of declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP and exemption from preparing a dossier

To help businesses easily distinguish between cases that must declare and cases that are exempted from declaring related-party transactions, below is a summary table based on the provisions of Decree 132/2020/ND-CP. The table clearly shows:

• Information on related relationships and related transactions (Form No. 01)
• Transfer pricing determination dossier (including: National dossier, Global dossier, Country-by-Country profit report)
• Items I, II, III, IV respectively in the declaration
• Specific situations: Domestic enterprise – foreign enterprise, same tax rate or tax incentives, small revenue, signed APA or meeting minimum EBIT threshold.

The table below will help businesses quickly identify whether they are eligible for declaration exemption in each case:

Board: Summary of cases of declaring related-party transactions on the HTKK according to Decree 132/2020/ND-CP and exemption from preparing the dossier

Như vậy, bảng trên đã tổng hợp đầy đủ các trường hợp kê khai giao dịch liên kết trên HTKK theo Nghị định 132/2020/NĐ-CP và miễn trừ lập Hồ sơ trong thực tế. Việc thực hiện kê khai giao dịch liên kết trên HTKK theo Nghị định 132/2020/NĐ-CP không chỉ giúp doanh nghiệp đáp ứng yêu cầu pháp lý, mà còn tạo cơ sở minh bạch trong quản lý thuế. Đồng thời, việc hiểu rõ các trường hợp được miễn trừ sẽ giúp tối ưu nguồn lực, hạn chế rủi ro và nâng cao hiệu quả tuân thủ. 

Time to submit the Annex to related party transactions according to Decree 132/2020/ND-CP

Pursuant to the provisions of Clause 3, Article 18 Decree 132/2020/ND-CP regulations on taxpayers with related party transactions within the scope of regulation at Decree 132/2020/ND-CP is responsible for declaring information on related relationships and related transactions according to the Appendix issued under Decree 132/2020/ND-CP and submitting it with the Corporate Income Tax Finalization Declaration.

An important point that businesses need to note is that the Transfer Pricing Declaration must be submitted together with the annual Corporate Income Tax Finalization Declaration. Thus, if the business applies the calendar year, the deadline for submission is March 31 of the following year. Late submission may result in the business being penalized according to regulations, so it is necessary to have a plan to avoid late submission. 

Conclude

Tóm lại, việc nắm chắc quy định về kê khai giao dịch liên kết trên HTKK theo Nghị định 132/2020/NĐ-CP giúp doanh nghiệp vừa tuân thủ pháp luật, vừa tránh được những rủi ro về thuế trong quá trình thanh tra, kiểm tra. Để đảm bảo số liệu kê khai chính xác và tận dụng đúng các trường hợp miễn trừ, doanh nghiệp nên có quy trình kiểm soát chặt chẽ và tham khảo ý kiến từ chuyên gia. Nếu bạn đang tìm giải pháp tối ưu trong kê khai và quản lý giao dịch liên kết, hãy để MAN – Master Accountant Network đồng hành cùng bạn trong việc xây dựng hồ sơ chuẩn chỉnh và minh bạch.

Contact information MAN – Master Accountant Network

• Address: 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City.
• Mobile/ Zalo: +84 (0) 903 428 622 (Ms. Ngan)
• E-mail: nguyenthikimngan@man.net.vn

Editorial Board: MAN – Master Accountant Network