On June 30, 2026, the Government issued Decree No. 255/2026/NĐ-CP regulating tax administration for related-party transactions of enterprises with related-party relationships (“Decree 255”). Decree 255 replaces Decree 132/2020/NĐ-CP regulating tax administration for enterprises with related-party transactions (“Decree 132”), issued to guide the implementation of the 2025 Law on Tax Administration and update regulations related to the 2025 Law on Corporate Income Tax. Decree 255 introduces several notable new points that directly impact the declaration, dossier preparation, and compliance obligations of enterprises with related-party transactions, specifically as follows:
1. Expansion of the scope for determining related-party relationships
1.1. Enterprises with borrowing or lending transactions of contributed capital involving executives or related parties are determined to be in a related-party relationship
Decree 132 stipulates that if an enterprise transfers or receives the transfer of at least 25% of contributed capital, or borrows or lends at least 25% of contributed capital involving individuals who manage or control the enterprise or related individuals, the enterprise and such individuals are determined to be in a related-party relationship.
Decree 255 supplements a new case determined to have a related-party relationship, which is when enterprises and the aforementioned subjects engage in capital borrowing and lending transactions with a ratio similar to that in transfer, capital transfer, borrowing, and lending transactions.
Accordingly, determining related-party relationships through asset borrowing and lending transactions between enterprises and related subjects will prevent enterprises from exploiting the form and wording of contracts to avoid the obligation to declare related-party transactions.
1.2. Excluding related-party relationships for guarantors/lenders that are 100% State-owned debt trading, purchasing, and handling entities
To ensure alignment with practical conditions and comply with the principle and substance of related parties, Decree 255 adds an exemption from related-party relationships for cases where an enterprise is financed/guaranteed by an organization whose function is debt trading, purchasing, and handling, which is 100% state-owned and does not directly or indirectly manage, control, contribute capital to, or invest in the enterprise.
Thus, to be exempted from a related-party relationship, the funding/guaranteeing entity must satisfy the following conditions:
- Being a 100% state-owned organization;
- Having the function of debt trading, purchasing, and handling;
- Not directly or indirectly participating in the management, control of contributed capital, or investment in the enterprise.
2. Supplementing compliance obligations regarding the Country-by-Country Report (“CbCR”)
2.1. Changes in the regulations on the minimum global consolidated revenue threshold to determine the CbCR filing obligation for ultimate parent companies in Vietnam
According to Decree 132, an ultimate parent company in Vietnam must submit a CbCR in the related-party transaction pricing dossier if its global consolidated revenue in the tax period is VND 18 trillion or more.
According to Decree 255, an ultimate parent company in Vietnam must prepare a CbCR if its global consolidated revenue in the financial year immediately preceding the reporting year is EUR 750 million or more. The foreign exchange rate to determine the consolidated revenue threshold is based on the central exchange rate or the average cross-exchange rate of December of the year immediately preceding the reporting year, as referenced and announced by the State Bank of Vietnam.
Replacing the revenue threshold in Vietnamese Dong (VND 18 trillion) with the EUR 750 million threshold (approximately VND 22.6 trillion at current exchange rates) helps harmonize with international standards on CbCR, while eliminating the risk of discrepancies caused by exchange rate fluctuations or inflation across years. This also facilitates multinational corporations in uniformly applying the criteria for determining CbCR preparation obligations across multiple countries.
2.2. Supplementing and amending the cases in which taxpayers in Vietnam with a foreign ultimate parent company must submit the CbCR to the tax authority in Vietnam
Decree 132 requires taxpayers in Vietnam with a foreign ultimate parent company to submit the Country-by-Country Report (CbCR) to the Vietnamese tax authority in cases where the country of the ultimate parent company does not have an agreement between competent authorities on the automatic exchange of reports with the Vietnamese tax authority, or where such exchange cannot be implemented, except where a surrogate entity has been designated to submit the CbCR to the local tax authority and this has been duly notified to the Vietnamese tax authority on time.
Decree 255 essentially maintains the spirit of Decree 132 but adds a case where taxpayers in Vietnam must submit the CbCR when the ultimate parent company is not obligated to prepare and submit the CbCR in the country or territory of its residency (except where the group's global consolidated revenue according to the consolidated financial statements of the fiscal year immediately preceding the reporting year is lower than the CbCR submission threshold prescribed by that country or territory due to differences in revenue thresholds, currency conversion, or revenue determination principles among countries or territories). The requirement to submit the CbCR in Vietnam is only implemented when Vietnam satisfies the conditions regarding information security, consistency, and proper use of information in accordance with regulations.
Compared to Decree 132, the cases giving rise to the CbCR submission obligation are more clearly defined, thereby helping enterprises accurately determine their filing obligations while limiting redundant reporting among countries once international information exchange mechanisms are met.
2.3. Addition of the CbCR submission format
Decree 255 reduces the annual recurring CbCR notification obligation, transitioning to a one-time notification mechanism with updates upon changes:
- Under Decree 132: Taxpayers were required to annually notify the name, tax identification number, and tax residence country of the ultimate parent company (or the surrogate entity filing the report) on or before the last day of the group's financial year.
- Under Decree 255:
- Taxpayers only need to submit a one-time Notification on the CbCR Filing Entity upon the first occurrence of CbCR-related obligations (effective from July 1, 2026).
- In the event of any changes to the information (including the cessation of obligations), taxpayers must update the notification within 90 days from the date the change arises.
- Enterprise submitting the CbCR must do so in an encrypted XML format via the Tax Management Information System.
3. Increase in revenue threshold for exemption from Transfer Pricing Documentation
According to Decree 255, taxpayers are responsible for declaring their related-party transaction values, but are exempt from preparing Transfer Pricing Documentation under the following conditions:
- Having no revenue/expenses from the exploitation or use of intangible assets;
- Total revenue is below VND 500 billion;
- Achieving a net profit margin relative to net revenue (before interest and corporate income tax) for the following sectors:
- Distribution: 5% or higher;
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Manufacturing: 10% or higher;
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Processing: 15% or higher.
Compared to Decree 132, Decree 255 expands the scope of taxpayers exempt from preparing Transfer Pricing Documentation by raising the revenue threshold to under VND 500 billion (up from the previous threshold of under VND 200 billion) and removing the requirement of "simple functional profile." This change broadens the range of eligible enterprises, significantly reducing compliance costs and time for medium-sized businesses.
4. Limitations on the tax authority's use of CbCR
Under Decree 132, tax authorities were not permitted to use the CbCR for "tax assessment / price deeming."
Under Decree 255, tax authorities are allowed to use CbCR for risk management and the international exchange of tax information in accordance with agreements signed by Vietnam; however, they cannot use this report as a direct basis for "adjusting" or "re-deeming related-party transaction prices."
Maintaining limitations on the scope of CbCR utilization demonstrates the principle that CbCR is merely a tool for group-level risk assessment, not a direct basis for determining related-party transaction prices or a company's tax liabilities. This contributes to ensuring alignment with OECD guidelines regarding the intended use of CbCR.
Decree 255 does not fundamentally alter the tax management mechanism for related-party transactions; rather, it focuses on refining regulations to make them clearer, more consistent, and closer to international practice, aligning with tax administration requirements in the context of integration. These new developments expand the scope of management over transactions with transfer pricing risks, while simultaneously simplifying procedures and reducing the compliance burden for certain groups of enterprises through adjustments to TP Documentation exemption conditions and improvements to the CbCR submission process. Therefore, enterprises engaging in related-party transactions should proactively review their related-party relationships, reporting obligations, and compliance documentation to ensure adherence to the new requirements starting from the 2026 corporate income tax tax period.
Decree 255 takes effect from July 1, 2026, and applies from the 2026 corporate income tax (CIT) period.
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