Publications

Decree No. 255/2026/ND-CP on Tax Administration For Related-party Transactions

July 9, 2026

Key highlights:

1. Refining cases for determining related-party relationships
2. Hierarchy of application of databases
3. Revenue threshold for exemption from preparing Transfer Pricing (TP) Documentation – increased to VND500 billion (approx. USD19 million)
4. Revenue threshold for preparing Country-by-Country Profit Reporting (CbCR) adjusted to EUR750 million; and updates on CbCR filing requirement
5. Introducing a separate framework for TP tax audits to reflect the tax authority’s enhanced focus on TP administration and enforcement

On 30 June 2026, Vietnam Government issued Decree 255/2026/ND-CP (“Decree 255”) on tax administration for related-party transactions, replacing Decree 132/2020/ND-CP (“Decree 132”) and Decree 20/2025/ND-CP (“Decree 20”). The new Decree retains the core transfer pricing framework while introducing targeted refinements in several areas of administration and compliance, which aligns with the new Law on Tax Administration No. 108/2025/QH15, effective on 1 July 2026 and the regulations regarding Global Minimum Tax, including Resolution 107/2023/QH15 and Decree 236/2025/ND-CP.

Decree 255 took effect on 1 July 2026 and applies from the 2026 corporate income tax (CIT) period onwards.

This Tax Alert summarizes the key developments relating to transfer pricing taxation under the above legal instruments, with a primary focus on the new provisions introduced by Decree 255.

A. Key changes

1. Updates on types of related-party relationship

The definition of related parties generally follows the provisions under Decree 132 and Decree 20. However, Decree 255 introduces the following notable changes:

1. For related-party relationships arising from financial transactions, a creditor or guarantor that is a wholly state-owned enterprise will not be considered as related to the borrower or guaranteed entity, provided that such creditor or guarantor does not directly or indirectly participate in the management, control, capital contribution, or investment in those enterprises.
2. The scope of related-party relationships is expanded for lending and borrowing transactions between an enterprise and an individual who directly manages/controls the enterprise; or falls within one of the family relationships specified under the Decree.

These amendments reflect a greater emphasis on the substance-over-form principle, address practical challenges encountered in applying Decree 132 and Decree 20, and further clarify the relationships subject to transfer pricing regulations.

2. Introduction of a hierarchy for databases used in arm’s length analysis

Decree 255 establishes the following hierarchy for data source utilization:

• Publicly available information and data (including securities market disclosures, commodity and service exchange data, official government sources, and national databases);
• Commercial databases;
• Tax administration databases.

Notably, Decree 255 also introduces the National database information and information published by government ministries, agencies, or other official sources as new data source used for TP compliance and administration purposes. However, Decree 255 does not clearly define the scope or contents of the national database.

3. Threshold change in TP documentation exemption regime

Decree 255 refines the framework for TP documentation exemptions, including:

• Increase in revenue threshold for exemption from VND200 billion to below VND500 billion (approx. USD19 million); and
• Removal of the “simple functions” criterion when assessing eligibility under the same regime.
• Beyond the changes above, the provision to maintain a requisite Operating Margin to qualify the threshold (i.e. 5% for distribution, 10% for manufacturing and 15% for toll manufacturing) is remain unchanged.

These changes reduce ambiguity and may simplify the application of exemption rules in practice.

4. Updates to Country-by-Country Reporting (CbCR)

Decree 255 provides further clarification on Vietnam’s CbCR framework.

a) Filing requirement for Multinational Enterprises (MNEs) whose Ultimate Parent Entities (UPEs) in Vietnam:

Threshold change – The consolidated group revenue is aligned to the equivalent of EUR750 million or more is required to prepare and submit a CbCR, replacing the previous VND18,000 billion thresholds.

This change aligns with the provision in the prescribed regulations regarding Global Minimum Tax, which enhance the consistency between the legal frameworks and closer align to the OECD BEPS Pillar II and international practices.

b) Filing obligations for Vietnamese taxpayers with foreign UPEs:

A Vietnamese taxpayer whose UPE is located overseas is not required to submit a CbCR to the Vietnamese tax authorities if:

• The CbCR has already been filed and exchanged automatically under the Multilateral Competent Authority Agreement (MCAA); or
• The UPE is exempt in its home jurisdiction due to differences in thresholds, currency conversion or revenue calculation rules.

Local filing isstill required for Vietnamese taxpayer where:

• There is systemic failure, i.e. the foreign jurisdiction fails to exchange CbCR information with Vietnam despite having an agreement in place; or
• No effective MCAA exists between Vietnam and the jurisdiction of the UPE; or
• The UPE did not prepare and file a CbCR in its jurisdiction of residence.

This provides a clearer framework for assessing local filing obligations, but also increases the need for multinational groups to closely monitor exchange status, overseas filing arrangements and notification obligations.

5. Updates on TP inspection and TP reassessment circumstance

Law on Tax Administration introduces a separate framework for TP tax audits, A notable change is the introduction of a specific audit timeline for TP inspection:

• TP tax audits may last up to 40 days, compared to 20 days for other tax audits.
• Where necessary, the audit period may be extended by up to an additional 40 days.
• In cases requiring information collection from or exchange with foreign tax authorities, the audit period may be extended to a maximum of two years.

The establishment of a dedicated TP audit framework under new Tax Administration Law reflects the tax authority’s enhanced focus on TP administration and enforcement.

In addition, Decree 255 introduces an additional reassessment circumstance during TP inspection: Incorrect declaration of information in Appendix I – Information on Related-Party Relationships and Related-Party Transactions.

This expansion highlights a stronger focus on the accuracy of disclosures relating to related-party relationships and transactions and reflects the tax authority’s increasing emphasis on compliance monitoring.

B. Impact and recommendation from Andersen:

Decree 255 further strengthens Vietnam’s TP tax administration framework, aligning it with the changes introduced under new Law on Tax Administration. In addition, Decree 255 has presented the cooperative efforts of Vietnamese Government in participating in global regulatory regime and tax management, via the recognition of OECD BEPS 13, MCAA, and international practices, particularly in relation to CbCR obligations, data transparency, and information exchange mechanisms.

Taxpayers should therefore closely monitor these disclosures, particularly where they rely on overseas filing and exchange mechanisms, and ensure coordination with group-level tax functions to assess potential fallback filing obligations in Vietnam.

Taxpayers should also carefully review the new regulations and proactively assess their impact on business operations, TP policies, and existing compliance processes. This will help ensure timely implementation of, and necessary adjustments to, current practices so as to achieve compliance with the new requirements.