The Government of Vietnam has recently issued Decree 20, which came into effect on 27 March 2025, applying from the 2024 tax year onwards. The decree introduces significant changes to transfer pricing regulations, including:
Expanded definition of related parties: The definition now includes subsidiaries, affiliates of credit institutions, and certain branches that share management or control.
Updated borrowing criteria: Related-party loans must meet two conditions: the outstanding balances must be at least 25% of the borrower’s equity and 50% of total medium/long-term liabilities.
Transitional guidelines on non-deductible interest expenses: Companies can either distribute non-deductible expenses over future years or carry them forward, depending on the related-party status.
Increased responsibilities for the State Bank of Vietnam: The bank must provide tax authorities with information on credit institutions, including details about board composition and major shareholders.
Revised transfer pricing (TP) declaration forms: The introduction of Appendix I, which requires the disclosure of related-party transactions in tax filings.
Jack Sheehan, Lan Hua, Vandana Vijayakumar, and Devi Gonzales from our Vietnamese member firm, DFDL, have published a more detailed analysis of these amendments. The changes aim to clarify the definition of related parties, reduce compliance burdens, and align with international best practices. You can read the full analysis here.
Thank you for downloading
For similar content to our Global Guide, subscribe to our mailing list and keep up to date.
