Reporting Related-Party Transactions in 2026: 5 Changes Under Decree 255

Declare related-party transactions (LGs) according to Decree 255/2026/ND-CP It is not merely an administrative obligation. Mastering the essence of GDLK, correctly understanding the scope of the linkage, fully implementing Appendix I, and developing the Pricing Documentation (National File, Global File) are the key to ensuring compliance with the arm’s-length principle (ALP) and demonstrating tax governance capabilities that meet international standards.

In the context of tax authorities increasingly strengthening transfer pricing control, enterprises need to proactively build a long-term transfer pricing management system, from reviewing related relationships, standardizing contracts, optimizing pricing methods, to periodically updating benchmarking according to OECD standards. This is not only compliance, but also a strategy to protect profit margins, stabilize cash flow and enhance reputation in the eyes of investors, banks and global partners.

Legal basis and scope of application

Decree No. 255/2026/NĐ-CP, issued by the Government on June 30, 2026, takes effect on July 1, 2026, and applies to the 2026 corporate income tax filing period.

As of the effective date of this Decree, Decree No. 132/2020/NĐ-CP and Decree No. 20/2025/NĐ-CP are repealed. This Decree is issued pursuant to Law on Tax Administration No. 108/2025/QH15 and Corporate Income Tax Law No. 67/2025/QH15. Therefore, the GDLK filing documents for the 2026 fiscal year-end settlement must be prepared in accordance with the forms and requirements set forth in Decree 255.

Arm's Length Principle (ALP)

The core principle governing all activities related to determining transfer pricing is the Independent Transaction Principle (ALP).

The Uncontrolled Transaction Principle stipulates that the price of a related party transaction must be equivalent to the price of a transaction made between independent (unrelated) parties under equivalent conditions. This principle is the basis for the Tax Authority to assess whether the declaration of related party transactions by an enterprise is reasonable and not aimed at shifting profits to lower tax regions.

New Provisions in the Decree on Related-Party Transactions

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.

Details about the Affiliated Parties 

Paragraph 2 of Article 5 of Decree No. 255/2026/ND-CP lists 12 cases in which parties are deemed to be related parties (items a through m). A business that falls under at least one of these categories and has engaged in transactions with that party during the tax period must report the related-party transactions. For ease of review, the 12 cases are divided into the following four groups.

Group 1: Capital Ownership Relations

To determine whether an enterprise is within the scope of related-party transactions under Decree 132/2020/ND-CP or not, the factors of ownership and management rights are always the key basis. Related relationships are often identified through the level of direct or indirect capital contribution, along with the ability of one entity to control the management, finance or business strategy of the other entity. The table below summarizes the most typical cases, helping enterprises accurately assess whether they have related-party transactions and must fulfill the obligation to declare related-party transactions according to current legal regulations or not. 

New points based on real-life situations: Declaration of related-party loan transactions by the Director (or a member of the Board of Directors)

According to Point l, Clause 2, Article 5 of Decree No. 255/2026/ND-CP, a business is considered an affiliated party when a transaction involving “borrowing, lending, borrowing, or lending out 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 enterprise, or with an individual who falls under one of the relationships specified in subparagraph (g) of this paragraph.” The previous Decree 132/2020 only covered borrowing and lending transactions and did not include borrowing or lending cases.

Therefore, a loan or borrowing of funds from the Director, or from a relative of the Director, that reaches the threshold of 10% of the owners’ equity constitutes a related-party relationship, even if no interest is charged. The enterprise must report this in Appendix I and determine the interest rate in accordance with the arm’s-length principle.

Group 2: Relationships on management control and borrowing

To clarify how businesses determine whether they are subject to declaration of related-party transactions under Decree 132/2020/ND-CP, especially in the group of management control relationships and loan relationships, the content below is presented in a visual format to help businesses grasp the true nature. The summary table will help businesses understand the legal conditions, how to analyze practices and methods of reviewing related-party relationships accurately, thereby being more proactive in managing tax risks and complying with the requirement to declare related-party transactions annually.

This does not apply in the following three cases:

• The lender or guarantor is a credit institution that does not directly or indirectly participate in the management, control, capital contribution, or investment in the borrower or the guaranteed entity, as specified in subparagraphs a, c, d, e, g, h, k, l, and m;
• The lender and the guarantor are credit institutions, and the borrower is not subject to the management, control, capital contribution, or investment of a third party in accordance with subparagraphs b, e, and i;
• Creditors and guarantors are state-owned organizations with 100% authorized capital that are authorized to buy, sell, and resolve debts, and do not engage in management, oversight, capital contributions, or investments as specified in subparagraphs a and c.

Thus, a bank loan is deductible only if these conditions are met. Businesses must retain evidence; they should not make assumptions.

Group 3: Management and Control Relationships

Not all affiliated relationships stem from equity ownership. In fact, many businesses do not hold equity in one another but are still subject to control through the appointment of leadership personnel, family ties among executives, or control by the same individual. Decree No. 255/2026/NĐ-CP identifies this group of relationships in points d, e, g, i, and k of Clause 2, Article 5. Among these, subpoint k is a broad provision that allows tax authorities to determine related-party relationships based on actual management, control, and decision-making, rather than solely on legal form.

This is the group of businesses most likely to be overlooked when reviewing reporting obligations for related-party transactions, particularly in family-owned businesses and groups of companies founded by the same individual investor. The table below summarizes five scenarios in this group for businesses to use as a reference.

Group 4: Specific Relationships

This group includes subparagraph h (Two business establishments that have a head office and permanent establishment relationship, or that are both permanent establishments of a foreign organization or individual) and subparagraph m (A credit institution with a subsidiary, a controlling company, or an affiliate of the credit institution as defined by the Law on Credit Institutions).

Rules on Transaction Thresholds and Exemptions from Declaration of Related-Party Transactions

Article 20 of Decree No. 255/2026/ND-CP classifies exemptions into two levels.

Exemption from filing a price determination report (Sections III and IV of Appendix I) and exemption from preparing a price determination dossier

This applies when the taxpayer conducts transactions only with related parties that are corporate income tax payers in Vietnam, the same tax rate applies, and none of the parties receives corporate income tax incentives during the period. The enterprise must still report the grounds for exemption in Sections I and II of Appendix I. In this case, there are no revenue threshold requirements.

You must still file Appendix I, but you are exempt from preparing the price determination dossier

Although an appendix must still be filed, the requirement to prepare a valuation report is waived in any of the following three cases:

• A taxpayer who engages in related-party transactions but whose total revenue for the tax period is less than 50 billion VND and whose total value of all related-party transactions during the tax period is less than 30 billion VND.
• The taxpayer has signed an APA and filed the annual report in accordance with the APA regulations. Related-party transactions outside the scope of the APA must still be reported for pricing purposes in accordance with Article 18.
• Taxpayers engaged in business activities that do not generate revenue or expenses from the exploitation or use of intangible assets, and whose revenue is less than 500 billion VND, shall apply the net profit margin (excluding interest expenses and corporate income tax) (excluding the difference between revenue and expenses from financial activities) on net revenue,” specifically: distribution at 5% or higher; manufacturing at 10% or higher; and processing at 15% or higher.

Even if exempted from preparing a Profile, the enterprise must still:

• Fully declare information about GDLK in Form 01 (GDLK Appendix attached to Corporate Income Tax Finalization).
• Compliance with the arm's length principle is required (prices must be within market price range).
• Pay special attention to the interest expense limit.

Important Note:

• Fully declare information about GDLK in Form 01 (GDLK Appendix attached to Corporate Income Tax Finalization).
• Exemption from declaring related-party transactions (exemption from preparing a Price Determination File) Are not This means that the business is exempt from applying the arm’s-length principle. Transactions must still be conducted at market prices. If the business does not meet the above exemption criteria, it is required to prepare and maintain a pricing documentation file.

Regulations on declaring related-party transactions

The obligation to declare related-party transactions is fulfilled through the submission of mandatory forms.

Mandatory form for declaring related-party transactions.

Pursuant to Point c, Clause 2, Article 18, taxpayers are required to “report information on related-party relationships and transactions in accordance with Appendix I, Appendix II, and Appendix III attached to this Decree and submit such information together with the corporate income tax return.” The disclosure form is Appendix I on information regarding related-party relationships and transactions, which consists of 4 sections:

Form 01 – Appendix I: Information on Affiliated Parties

Enter the name, country, and tax identification number of each related party. In column (5), mark an “x” next to the corresponding type of related-party relationship (A, B, C, D, Đ, E, G, H, I, K, L, M, as specified in paragraph 2 of Article 5). If a party falls under multiple categories, mark all applicable ones. If a foreign affiliated party does not have a tax identification number, the reason must be clearly stated.

For example: This is where you declare your director's loan or bank loan if there is a joint guarantee.

Form 01 – Appendix II: Cases Exempt from the obligation to declare related-party transactions and Exempt from submitting price determination documents.

In the section on reporting related-party transactions in Appendix II, if the enterprise falls under one of the exemptions from reporting related-party transactions as stated above, it must check the corresponding box; however, it is still required to report such transactions in Appendix I.

Form 01 – Appendix III: Information for Determining the Price of Related-Party Transactions

Businesses exempt under Article 20, paragraph 1, do not need to report Sections III and IV. Businesses exempt from filing records under Article 20, paragraph 2, subparagraphs a or c, must still report Section III, but only fill in columns (3), (7), (12)—that is, the recorded value of sales, purchases, and amounts collected or paid on behalf of others; the remaining columns should be left blank. For subparagraph a, the total value of related-party transactions used to determine eligibility for the exemption is calculated as the sum of columns (3) and (7) in the row “Total value of transactions arising from related-party activities.” Businesses not eligible for the exemption must fully report the recorded value, the value restated based on the arm’s-length price, the difference, and the pricing method for both sales and purchases.

Appendix III is extremely important, reflecting the true nature and value of related party transactions between related parties. Appendix III, the content that businesses need to pay attention to when declaring related party transactions:

• The recognized value of related-party transactions
• Revalued value based on Independent Transaction price
• Pricing method

Note: The three aforementioned related-party transactions must be fully declared on both sides: the value of sales to the related party and the value of purchases from the related party. This helps the Tax Authority gain a comprehensive view of the value chain and profit allocation within the group.

Submission Deadline

Businesses exempt under Article 20, paragraph 1, do not need to report Sections III and IV. Businesses exempt from filing records under Article 20, paragraph 2, subparagraphs a or c, must still report Section III, but only fill in columns (3), (7), (12)—that is, the recorded value of sales, purchases, and amounts collected or paid on behalf of others; the remaining columns should be left blank. For subparagraph a, the total value of related-party transactions used to determine eligibility for the exemption is calculated as the sum of columns (3) and (7) in the row “Total value of transactions arising from related-party activities.” Businesses not eligible for the exemption must fully report the recorded value, the value restated based on the arm’s-length price, the difference, and the pricing method for both sales and purchases.

Allocation of Interest Expense

The most important aspect of the obligation to report related-party transactions is the management of interest expenses in accordance with Article 16 of Decree 255/2026/NĐ-CP. This is a common transfer pricing control mechanism worldwide.

• Rule: The total net interest expense (after deducting interest on deposits or loans) deductible when determining corporate income tax must not exceed 30% of the total net profit from business operations plus net interest expense and depreciation expense for the period (EBITDA).
• Excess: The portion of interest expense exceeding the 30% EBITDA threshold will not be deducted when determining taxable income.

Note the following exceptions:

• Loans to taxpayers that are credit institutions or insurance companies;
• ODA loans and preferential loans from the government that are on-lent to businesses;
• Loans for implementing programs and projects that carry out the government’s social welfare policies.

Taxpayers shall declare the interest expense ratio for the tax period in accordance with Appendix I issued together with this Decree.

Transfer pricing determination dossier 

The preparation of a Market Price Determination Profile is the clearest evidence of an enterprise's compliance with the regulations on declaration of related party transactions.

The purpose of the Valuation Report is to document that the company's related-party transactions have been valued at market price (ALP). This is the most important legal evidence to avoid being subjected to valuation by the Tax Authority.

Attention: Pricing documentation must be prepared prior to the filing of the annual corporate income tax return and retained and presented upon request by the tax authority. When the tax authority requests such documentation during the pre-audit consultation process, the enterprise must provide it within a period not exceeding 30 business days. If there is a valid reason, the deadline may be extended once, for a maximum of 15 business days. The accounting data of the comparable entity must be provided via software in spreadsheet format.

Local File

The Local File is the most detailed document, focusing on the business transactions in Vietnam. It must include the following analysis:

• General information: History, organizational structure, business strategy of enterprises in Vietnam.
• GDLK analysis: Detailed description of each type of GDLK, including value and contract terms.
• Function, Risk, and Asset Analysis (FAR Analysis): FAR analysis is the heart of the valuation dossier. It analyzes the functions (production, R&D, sales, etc.), risks (market, credit, inventory, etc.), and assets (tangible, intangible, IP) that the enterprise performs and holds in the value chain. The purpose is to determine the role of the enterprise in the group as a basis for choosing the appropriate transfer pricing method.

 New Provisions in the Decree on Benchmarking Data

Decree 255 establishes a mandatory order of priority. With regard to data sources, the order of priority is:

• Data on publicly traded companies, commodity exchanges, and services;
• National databases and official public sources;
• Trade data;
• Tax Administration Database.

Regarding comparables, the order is: internal comparables, followed by entities in the same country as the taxpayer, and then entities in countries within the region with comparable conditions.

The minimum number of comparables is 1, 3, or 5, depending on the extent to which material differences can be excluded. The standard range for independent transaction values is from the 35th to the 75th percentile, with the median at the 50th percentile. When the tax authority adjusts or determines the value, the median is used.

See also: Database for managing transfer pricing.

Master File

The Master File provides a comprehensive overview of the operations of a multinational corporation.

• The Global File is a component of the pricing documentation specified in Article 18, paragraph 2, subparagraph d.3. Its content is prepared in accordance with the list set forth in Appendix III of Decree 255.
• Contents: Overview of global organizational structure, supply chain, description of key intangible assets (IP), internal financial policy.

Key Changes in the Decree on Country-by-Country Reporting (CbCR)

A ultimate parent company in Vietnam with global consolidated revenue for the fiscal year immediately preceding the reporting year of 750 million euros or more must prepare and file a CbCR. The exchange rate used for conversion is the central exchange rate or the average cross-rate for December of the preceding year, as published by the State Bank of Vietnam. If the ultimate parent company is located abroad, the Vietnamese enterprise is only required to file a CbCR in the cases specified in Point b, Clause 2, Article 19.

Notice Regarding CbCR Filing Obligations (Form 01/TB-BCLN): This report must now be filed only once when the obligation first arises, no later than the last day of the ultimate parent company’s fiscal year. If there are any changes, the enterprise must submit an updated report within 90 days. The deadline for submitting the CbCR is no later than 12 months from the end of the fiscal year of the ultimate parent company, in an encrypted XML format, via the Tax Management Information System.

Risks, consequences and plans for business

Even though they have complied with the declaration of related party transactions according to Form 01, enterprises may still face risks if the Pricing Determination Profile is not strong enough.

Tax compliance and audit risks

Common errors in declaring related party transactions:

• Errors in filling out Form 01 (Appendices I, II, III)
• Failure to declare (or under-declare) related party transactions involving loans or advances. For example, borrowing money from the Board of Directors without determining the interest rate at Market Price (ALP).
• Missing Valuation Documents: This is the most serious error, leading to tax assessment.

Legal Consequences and Tax Assessments

If the Tax Authority detects that the transaction is not at market price, the enterprise will be subject to corporate income tax (including late payment interest).

Under Paragraph 3 of Article 21 of Decree No. 255/2026/ND-CP, the tax authority has the right to determine prices, profit margins, profit allocation ratios, taxable income, or the amount of corporate income tax due when:

• A taxpayer who fails to file a return, files a return with incomplete information, files a return with incorrect information, or fails to submit Schedule I;
• Failure to provide complete information in the price determination dossier, or failure to submit the dossier, data, and supporting documents within the prescribed time limit;
• Using transaction information that is false, inaccurate, or documents that are illegal, invalid, or whose source is not specified;
• Violations of the provisions on determining the price of related-party transactions under Article 20.

Note: The Cross-Country Profit Report is used solely for risk management and information exchange; it is not used to adjust or determine the prices of related-party transactions.

Action Plan for Businesses

To ensure absolute compliance with the obligation to declare related-party transactions and determine the price of related-party transactions according to Decree 132/2020/ND-CP, enterprises should implement a 4-step action plan:

Review and classify GDLK

• Review all related-party relationships (12 cases under Article 5 of Decree 255).
• Classify all transactions that occurred during the year (sales, services, finance, IP).
• Exemption Decision: Determine whether the business is exempt from declaring related-party transactions (exempt from filing). If so, basic records still need to be retained.

Perform FAR analysis

• Conduct a Function, Risk, and Asset Analysis (FAR Analysis) for each transaction type.
• This is the basis for choosing the appropriate valuation method.

Prepare and complete the dossier.

• Conduct Benchmarking to determine market price ranges.
• Apply the chosen method (usually TNMM) to adjust the profit to the market threshold.
• Complete Local File, Master File (if required) before the deadline for submitting Corporate Income Tax Finalization Declaration.

Declaration and payment 

• Complete Appendix I (Sections I through IV, as applicable);
• If there are any adjustments to increase or decrease profits due to the determination of related-party transaction prices, make the adjustments immediately on the Corporate Income Tax Return;
• Review the requirement to file Notice 01/TB-BCLN and the CbCR if the group reaches the 750 million euro threshold.
• Submit the Related-Party Transaction Disclosure Form along with the Corporate Income Tax Return.

Conclude

The obligation to report related-party transactions under Decree No. 255/2026/ND-CP has set compliance standards higher than ever before, particularly for businesses that are part of multinational corporations or that engage in large-scale borrowing or lending transactions.

To ensure compliance and avoid the risk of being assessed taxes, the transfer pricing documentation is the most important legal document for a business.

Businesses should look for highly specialized units as reference. auditing services and in-depth pricing advice, to perform accurate FAR Analysis and Benchmarking, ensuring all related party transactions strictly comply with the arm's length principle.

Contact MAN – Master Accountant Networkk to receive timely advice and support.

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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.