Vietnam issues new tax rules for related‑party transactions

A new decree in Vietnam sets out how tax authorities will manage related‑party transactions entered into by companies that have a qualifying link. The regulation defines linked parties as those where one enterprise directly or indirectly holds at least 25% of the other's capital, where both are controlled by a common third party, or where a shareholder holds at least 10% of the other’s shares, among other criteria.

The decree specifies the methods for determining arm‑length prices, the costs that can be deducted for tax purposes, and the reporting duties of taxpayers, including filing transfer‑pricing documentation and profit‑allocation reports. It also outlines the responsibilities of tax agencies in reviewing and enforcing these rules. Transactions involving goods or services subject to state‑set pricing are excluded. The aim is to curb transfer‑pricing abuses, protect state revenue and increase corporate transparency.