State-owned debt trading and processing organizations (100%) are increasingly appearing in debt restructuring transactions, but not all chief accountants understand when selling or processing debt through this group of organizations will implicate the enterprise as having an affiliated relationship. Decree 255/2026/ND-CP. A minor misidentification of a detail in Article 5 can lead businesses to create unnecessary additional documentation for determining transfer pricing, or conversely, omit declaration obligations. This article systematically reviews the legal basis, application conditions, and common mistakes related to the organization of buying, selling, and handling state-owned debt.
Why is the question of organizing the purchase and handling of state-owned debt (100%) becoming a hot topic again?
Since Decree 255/2026/ND-CP replaced the old legal framework on tax management for enterprises with related-party transactions, the method of identifying related parties in Article 5 has been written in much more detail, including a specific point for The organization for buying and selling debt is owned by the State with 100% capital. This is not a coincidence: the buying and selling of bad debts and the handling of outstanding debts through organizations owned by the State with 100% charter capital is a popular financial restructuring channel for many businesses, especially those with credit loans facing difficulties.
The question is very practical: When a company's debt is transferred, bought, or guaranteed by a state-owned debt trading and resolution organization, does the relationship between the two parties automatically become an affiliated relationship?
If such transactions exist, businesses must declare them, prepare documentation to determine the cost, and be subject to the interest expense limitation threshold. Otherwise, businesses are exempt from all these obligations for that specific relationship. The difference between these two conclusions can amount to billions of dong in compliance costs and tax risks, so correctly understanding the regulations on the purchase and handling of state-owned debt is an indispensable step before closing the tax period.
The legal basis for determining whether an organization buying and selling and handling state-owned debt (100%) has capital must be an affiliated party.
All content related to the organization of buying, selling, and handling state-owned debt is located at Point d, Clause 2, Article 5 of Decree 255/2026/ND-CP, This section outlines the regulations concerning affiliated parties. To properly understand the exceptions for this group of organizations, one needs to read the general principles.
General principle at point d, clause 2, Article 5: Thresholds 25% and 50%
Clause d, paragraph 2, Article 5 stipulates that an enterprise guaranteeing or lending capital to another enterprise in any form (including loans from third parties secured by the financial resources of the affiliated party and financial transactions of a similar nature) will constitute an affiliated relationship, provided that the total outstanding debt of the borrowing enterprise to the lending or guaranteeing enterprise is at least equal to 25% of the owner's equity of the borrowing enterprise and accounts for over 50% of the total outstanding debt of all medium and long-term debts of the borrowing enterprise.
Important Note: Only when the loan or guarantee simultaneously meets both conditions regarding the equity ratio and the proportion of medium- and long-term debt, is the relationship between the lender or guarantor and the borrowing enterprise considered an affiliated relationship.
Three groups of exceptions
Immediately following the general principles, the Decree sets out three groups of exclusions, applicable to three different groups of lenders or guarantors:
- Point d.1: The guarantor or lender is a credit institution as defined by Law No. 32/2024/QH15 on Credit Institutions (amended by Law No. 96/2025/QH15), and does not directly or indirectly participate in the management, control, capital contribution, or investment in the borrowing enterprise or the guaranteed enterprise.
- Point d.2: The guarantor or lender is a credit institution under the same law mentioned above, and the borrowing or guaranteed enterprise is not under the same management, control, capital contribution, or investment of another third party.
- Point d.3: The creditor or guarantor is a state-owned organization with charter capital that functions in buying, selling, and handling debt, and does not directly or indirectly participate in the management, control, capital contribution, or investment in the debtor or the guaranteed enterprise.
The regulations specifically apply to state-owned debt trading and resolution organizations (100% capital), completely separate from the group of credit institutions.
This separation is clearly justified because the nature of the operations of state-owned debt trading and resolution organizations is to acquire and purchase pre-existing debts. The relationship between these organizations and debtor enterprises is inherently formed from debt resolution operations, not from a typical credit granting decision, so lawmakers need an exclusion condition that is appropriate to this specific characteristic.
Three conditions must be met for an organization involved in the purchase and handling of state-owned debt not to be considered an affiliated party.
The regulation can be broken down into three conditions that must be met simultaneously so that the relationship between the organization buying and handling state-owned debt and the debtor or guaranteed enterprise is not identified as an affiliated relationship:
- Ownership requirements: The creditor or guarantor must be an organization with state-owned capital of less than 100%. Organizations with less than 100% of state capital, even if they have the function of buying and selling debt, are not subject to the provisions of point d.3.
- Functional requirements: The organization must have the function of buying, selling, and processing debt. This is a condition linked to its core business activities permitted by law, and not just a single, random debt purchase transaction from another organization.
- Conditions regarding the level of intervention: State-owned debt trading and resolution organizations do not directly or indirectly participate in the management, control, capital contribution, or investment in the debtor enterprise or the guaranteed enterprise according to other related party criteria specified in points a and c of Clause 2, Article 5 (owning capital of 25% or more of TP3T; being the largest shareholder and holding 10% or more of TP3T shares).
Only when all three conditions above are met, will the creditor-debtor relationship or guarantee relationship arising from the buying and selling or handling of debt be excluded from the category of related-party relationships under point d. If any condition is missing, for example, if the debt buying and selling and handling organization is state-owned and simultaneously holds more than 25% of the debtor's capital contribution, the related-party relationship will still be established under point a or point c, independent of any exceptions.
Distinguish between the exceptions for state-owned debt trading and resolution organizations and the exceptions for credit institutions.
One common misconception is that all three points are about "not participating in management, control, capital contribution, or investment." However, there are two fundamental differences:
- Regarding the subject: Points d.1 and d.2 apply to credit institution operating according to Law on Credit Institutions No. 32/2024/QH15; and point d.3 applies specifically to State-owned organization with charter capital of 100% has the function of buying, selling, and handling debt., This group of entities is not necessarily a credit institution; it could be an asset management company or a specialized debt trading company.
- Regarding the scope of the criteria for comparison: Point d.1 excludes according to points a, c, d, e, g, h, k, l, m of Clause 2, Article 5 (broad scope); d.2 excludes according to points b, e, i (cases where both are under the management of a third party); and d.3 excludes only according to points a and c, That is, it is only necessary to prove that the state-owned debt trading and resolution organization does not hold capital contributions or controlling shares according to these two criteria; the scope of comparison is narrower and more specific than in d.1.
This difference in the scope of the comparison criteria has important practical implications: When businesses prepare supporting documents, they cannot mechanically apply the criteria of d.1 to case d.3, because the two provisions refer to different points of clause 2 of Article 5. This is also why many businesses should refer to the systematic article on The relationship under Decree 255 To fully compare all points a to m of Clause 2, Article 5 before drawing a conclusion.
A practical example of applying regulations on the organization of buying, selling, and handling state-owned debt.
Assume: Company B is a manufacturing enterprise with medium-term debt at a commercial bank. Due to financial difficulties, this debt is sold by the bank to a state-owned debt trading company with 100% of charter capital, whose function is to buy, sell, and handle bad debts according to legal regulations. After the debt trading transaction, Company B's outstanding debt with this state-owned debt trading and handling organization accounts for 60% of the company's total medium and long-term debt, corresponding to 30% of owner's equity, thus reaching both thresholds of 25% and 50% mentioned in point d.
If we only consider the general principle, Company B would be considered to have an affiliated relationship with this state-owned debt trading and resolution organization. However, because that organization simultaneously satisfies the three conditions mentioned – owning state capital, having the function of buying and selling and resolving debt, and not participating in the management, control, capital contribution, or investment in Company B as per points a and c – the relationship arises solely from the acquired debt. Are not This is identified as a related party relationship under point d. Company B is not required to declare related party transactions for this debt specifically, unless the company incurs other related party relationships under the remaining points of Clause 2, Article 5.
Conversely, if the state-owned debt trading and processing organization simultaneously appoints a representative to the Board of Directors or contributes additional share capital to Company B exceeding 25%, the third condition is no longer satisfied, and the affiliation under point a will be established independently of the debt trading activities.
Documentation proving that the debt trading and processing organization 100% is state-owned and not an affiliated party.
To invoke the exception at point d.3, businesses need to prepare the following documents for explanation during tax audits and inspections:
- Documents, debt purchase and sale contracts Confirm that the debtor is a state-owned organization with 100% charter capital, accompanied by a business registration certificate or establishment decision showing the percentage of state ownership.
- Documents proving the function of buying, selling, and handling debt. of that organization according to its operating license or company charter.
- List of shareholders, capital contributors, members of the Board of Directors or Board of Members of the debtor enterprise at the time the transaction occurred, to prove that the state-owned debt trading and processing organization does not hold capital contributions of 25% or more and is not the largest shareholder holding 10% or more shares.
- Statement of outstanding debt This shows the ratio between debt and equity, and with the total outstanding medium and long-term debt, as a basis for comparing the threshold of 25%/50% at point d.
- Written review conclusions Regarding whether or not the business has an affiliation with a state-owned debt trading and processing organization, this information should be included in the corporate income tax return for the relevant period.
For businesses with complex ownership structures or multiple debts handled through various organizations, self-auditing can easily overlook indirect factors. This is where businesses should consider using professional auditing services. related party transaction advisory services To be subject to independent review before any official conclusions are reached.
Conclude
The regulations on the organization of the purchase and handling of state-owned debt at point d.3, clause 2, Article 5 of Decree 255/2026/ND-CP are a conditional exception, not an automatic exemption. Three conditions need to be noted:
- Owned by the state in 100%.;
- It has the function of buying, selling, and managing debt.;
- And they do not participate in management, control, capital contribution, or investment.
All three conditions must be met simultaneously for the relationship arising from the buying, selling, and guaranteeing of debt not to be considered an affiliated relationship.
Businesses with debts processed through state-owned debt trading and resolution organizations should proactively review and retain supporting documents from the moment the transaction occurs, instead of waiting until tax inspectors ask questions.
If businesses are still unsure about determining the related-party relationship in their specific case, MAN – Master Accountant Network's team of related-party transaction experts is ready to assist in reviewing and completing the documentation before the tax settlement period.
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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.
Frequently Asked Questions Regarding the Case of Organizations Buying and Handling State-Owned Debt 100% Capital
What is the purpose of the State-owned debt trading and resolution organization 100% according to Decree 255/2026/ND-CP?
This is a state-owned organization with 100% charter capital, whose function is to buy, sell, and process debt. As stated in point d.3, clause 2, Article 5 of Decree 255/2026/ND-CP, it is one of three groups of entities excluded from the category of affiliated parties when lending or guaranteeing, if they meet the necessary conditions.
What conditions must be met for an organization involved in the purchase and handling of state-owned debt not to be considered an affiliated party?
Three conditions must be met simultaneously: owning 100% of state-owned charter capital; having the function of buying, selling, and handling debt; and not directly or indirectly participating in the management, control, capital contribution, or investment in the debtor enterprise or the guaranteed enterprise as specified in points a and c of Clause 2, Article 5.
Are the exceptions for state-owned debt trading and resolution organizations the same as those for credit institutions?
Not entirely. The exceptions in points d.1 and d.2 apply to credit institutions under the Law on Credit Institutions No. 32/2024/QH15 with a broader scope of criteria for comparison (many points of Clause 2, Article 5); while the exception in point d.3 is specifically for state-owned debt trading and processing organizations, only comparing with points a and c.
If the debt reaches 25% of contributed capital and 50% of total medium and long-term debt, is the business always required to declare related-party transactions?
No. If the creditor or guarantor is a state-owned debt trading and processing organization and meets all three conditions in point d.3, the relationship arising from that loan or guarantee alone is not considered a related party relationship, even if it meets both the 25% and 50% thresholds.
What documents do businesses need to keep to prove they have no affiliation with state-owned debt trading and resolution organizations?
Businesses need to retain the debt purchase and sale contract, documents proving the percentage of state ownership and the organization's function in buying, selling, and handling debt, a list of shareholders or contributing members at the time of the transaction, a statement of outstanding debt against the 25% or 50% threshold, and a written review conclusion.
What if an organization that buys and handles state-owned debt then invests capital in the debtor company?
In that case, the third condition at point d.3 is no longer satisfied, and the affiliation can be established independently according to point a or point c of Clause 2, Article 5, depending on the proportion of capital contribution or shares held.