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DECREE 255/2026/NĐ-CP ON TAX ADMINISTRATION FOR RELATED-PARTY TRANSACTIONS OF ENTERPRISES HAVING RELATED-PARTY RELATIONSHIPS

On 30 June 2026, the Government issued Decree No. 255/2026/NĐ-CP (“Decree 255”) on tax administration for enterprises engaging in related-party transactions, replacing Decree 132/2020/NĐ-CP and Decree 20/2025/NĐ-CP. The Decree takes effect from 1 July 2026 and applies from the 2026 CIT period.

The Decree essentially carries forward the current transfer pricing management framework, while adding a number of new provisions on comparable data sources, exemption from preparing transfer pricing documentation, the Country-by-Country Report (CbCR), and the information-exchange mechanism among tax authorities.

Some notable new points include:

1. Additional provisions on determining related-party relationships through borrowing/lending of assets

  • Decree 255 adds a case for determining a related-party relationship through borrowing/lending transactions between an enterprise and an individual having a relationship as prescribed, where the transaction value reaches 10% or more of the owner’s contributed capital at the time the transaction arises during the tax period.
  • Previously, Decree 132/2020/NĐ-CP only provided for related-party relationships through loan (money borrowing/lending) transactions. The addition of provisions on borrowing/lending of assets aims to fully cover all forms of financial transactions and to limit the risk of exploiting transaction forms to circumvent the regulations on related-party transactions.

2. Provisions on the priority order of comparable data sources

  • For the first time, Decree 255 prescribes the priority order for selecting data sources to analyse and determine related-party transaction prices, in the following order:

– Public or official data sources (stock exchanges, commodity exchanges, national databases and other public sources);

– Commercial databases;

– Databases of the tax authority.

  • This provision creates a uniform basis for selecting comparable data and prioritizes independent, transparent and verifiable data sources.

3. Raising the revenue threshold for exemption from preparing transfer pricing documentation to VND 500 billion

  • Decree 255 amends the provisions on exemption from preparing transfer pricing documentation, whereby:

– The revenue threshold for exemption from documentation under the safe-harbour profit ratio mechanism is raised from VND 200 billion to below VND 500 billion in certain cases.

– Qualitative criteria such as “performing simple functions” are removed when considering the conditions for applying the documentation exemption mechanism.

  • These changes help simplify the application conditions, reduce practical difficulties and create greater convenience for enterprises eligible for exemption from preparing transfer pricing documentation.

4. Updates to the provisions on the Country-by-Country Report (CbCR)

  • The consolidated revenue threshold is adjusted from VND 18,000 billion to the equivalent of EUR 750 million, determined based on the immediately preceding fiscal year and converted at the exchange rate announced by the State Bank of Vietnam.
  • Enterprises in Vietnam belonging to a group obliged to file a CbCR must submit the report in XML format within 12 months from the end of the fiscal year of the Ultimate Parent Entity (UPE).
  • The designated enterprise in Vietnam must submit Form No. 01/TB-BCLN to notify the group’s CbCR filing entity no later than the last day of the UPE’s fiscal year. This form is submitted only once and only needs to be updated when there is a change in information (within 90 days from the date the change arises).
  • The Decree also affirms that the CbCR is not a direct basis for adjusting tax obligations or related-party transaction prices.

5. Clarification of the obligation to file the Country-by-Country Report (CbCR) in Vietnam

  • Decree 255 provides in greater detail the cases in which enterprises in Vietnam whose Ultimate Parent Entity (UPE) is located abroad are or are not required to file a CbCR in Vietnam, specifically:

– No CbCR is required to be filed in Vietnam if the UPE or the group’s designated entity has filed the CbCR abroad and meets the conditions for information exchange with Vietnam.

– A CbCR must be filed in Vietnam when the foreign tax authority does not carry out CbCR exchange with Vietnam despite an existing information-exchange agreement (systemic failure).

– No CbCR is required to be filed in Vietnam if the UPE is exempt from filing in its home country due to differences in the revenue threshold, foreign currency conversion or revenue determination method.

– The obligation to file a CbCR in Vietnam only arises when Vietnam meets the international standards on confidentiality, consistency and appropriate use of CbCR data, as notified by the tax authority.

  • Compared with Decree 132/2020/NĐ-CP, the new provisions further clarify the conditions for applying the CbCR filing obligation in Vietnam and require multinational groups to closely monitor the information-exchange mechanism and coordinate with the parent company to ensure compliance.