<\/span><\/h3>\nThe 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.<\/span><\/p>\n<\/span>When was Decree No. 255\/2026\/N\u0110-CP issued and when did it officially take effect?<\/b><\/span><\/h3>\nThe 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.<\/span><\/p>\nBusinesses that engage in related-party transactions must comply with the provisions of the Decree to file reports, determine prices, and fulfill other related obligations.<\/span><\/p>\n<\/span>Does Decree No. 255\/2026\/N\u0110-CP completely replace all previous regulations on related-party transactions?<\/b><\/span><\/h3>\nDecree No. 255\/2026\/N\u0110-CP essentially retains the provisions of Decree No. 132\/2020\/N\u0110-CP and Decree No. 20\/2025\/N\u0110-CP.<\/span><\/p>\nIn 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.<\/span><\/p>\n<\/span>Which businesses need to be aware of Decree No. 255\/2026\/N\u0110-CP?<\/b><\/span><\/h3>\nBusinesses 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:\u00a0<\/span><\/p>\n\n- Enterprises with ownership, capital contribution, management, or control relationships;<\/span><\/li>\n
- Transactions with parent companies, subsidiaries, and other entities within the same group;<\/span><\/li>\n
- Transactions involving borrowing, lending, borrowing from, lending to, providing guarantees, or other transactions with related parties.<\/span><\/li>\n
- 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.<\/span><\/li>\n<\/ul>\n
<\/span>What are the new developments regarding tax administration principles for related-party transactions?<\/b><\/span><\/h3>\nThe Decree amends and supplementing the principles governing the tax authorities\u2019 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.<\/span><\/p>\n<\/span>Which terms does the decree add or clarify?<\/b><\/span><\/h3>\nThe Decree supplements and refines the following terms:<\/span><\/p>\n\n- Ultimate parent company;<\/span><\/li>\n
- Tax treaty;<\/span><\/li>\n
- Related-party transactions;<\/span><\/li>\n
- Country Profile;<\/span><\/li>\n
- Global Profile;<\/span><\/li>\n
- The situation involves a lack of systematic information exchange.<\/span><\/li>\n<\/ul>\n
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.<\/span><\/p>\n<\/span>Identify the relationship<\/b><\/span><\/h2>\n<\/span>What new provisions does the decree add regarding lending and borrowing transactions?<\/b><\/span><\/h3>\nThe 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\u2019 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.\u00a0<\/span><\/p>\n<\/span>Why were borrowing and lending transactions added to the criteria for determining related-party relationships?<\/b><\/span><\/h3>\nPreviously, the new regulations focused on borrowing and lending transactions but did not clearly address borrowing and lending transactions.<\/span><\/p>\nThis 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.<\/span><\/p>\n<\/span>Do interest-free borrowing and lending transactions need to be considered when determining affiliated relationships?<\/b><\/span><\/h3>\nYes, 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.<\/span><\/p>\n<\/span>How are the transaction thresholds for borrowing, lending, and other similar transactions determined for the purpose of assessing related-party relationships?<\/b><\/span><\/h3>\nA 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:<\/span><\/p>\n\n- Management;<\/span><\/li>\n
- Control;<\/span><\/li>\n
- Capital contribution;<\/span><\/li>\n
- Invest in the debtor company or the guaranteed company.\u00a0<\/span><\/li>\n<\/ul>\n
<\/span>What conditions must a business meet to qualify for the exemption from determining an affiliated relationship with a debt collection agency?<\/b><\/span><\/h3>\n