Transfer pricing documentation, related-party disclosure, foreign contractor tax and intercompany loan advisory for foreign-invested companies in Vietnam, updated for Decree 255/2026/ND-CP.
Part of Viettonkin's Accounting and Tax services
As of 31 December 2025, Vietnam had 45,416 valid foreign direct investment projects with total registered capital of about USD 529.6 billion, according to the Foreign Investment Agency. Most of those projects sit inside international groups, and the payments between each Vietnamese company and the rest of its group are governed by their own set of tax rules.
A management fee to a regional headquarters, a royalty to the company that owns the brand, interest on a loan from group treasury, a recharge from a shared services centre: each is a cross-border payment, and each is also a related-party transaction. Vietnamese rules require the price to reflect what independent parties would agree in comparable circumstances, require the relationships and transactions to be disclosed every year, and apply foreign contractor tax to the payment itself.
The framework was replaced on 1 July 2026. Decree 255/2026/ND-CP on tax administration for related-party transactions took effect on that date and applies from the 2026 corporate income tax period, replacing Decree 132/2020/ND-CP and its 2025 amendment, Decree 20/2025/ND-CP. It kept the familiar structure of the regime, including the cap on deductible interest, while changing the documentation exemption, the country-by-country reporting threshold and the order in which data sources are used for benchmarking.
Because the same payment carries both transfer pricing and withholding consequences, and both end up in the corporate income tax return, the positions have to agree with one another. This service addresses them together for the operating company, as a standing engagement that follows the transactions through the year rather than a report produced once and filed away.
The service covers the recurring flows between an operating company in Vietnam and its related parties abroad. Each type raises its own pricing, withholding and evidence questions.
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| Transaction | Typical example | Questions it raises |
|---|---|---|
| Management fees | Charges from a parent or regional headquarters for oversight, finance, human resources or other group services. | Was a service received that the Vietnamese company needed, is the charge at arm's length, and what foreign contractor tax applies? |
| Royalties and licences | Payments for trademarks, patents, software or know-how owned by a related party abroad. | Does the Vietnamese company benefit from the intangible, is the rate supportable, and is treaty relief available? |
| Technical and shared services | IT support, engineering assistance and shared services centre recharges. | Does the charge duplicate a local function, and how are the cost base and markup evidenced? |
| Intercompany loans | Financing from a parent or a group treasury company. | Is the interest rate at arm's length, does the loan need registering with the State Bank of Vietnam, and how much interest is deductible? |
| Goods in the supply chain | Components bought from, or products sold to, related companies. | Which method and which comparables support the margin earned in Vietnam? |
| Cost sharing | Allocation of research, marketing or other group costs to the Vietnamese company. | Is the allocation key reasonable, and is the expected benefit documented? |
| Digital services from abroad | Cloud, platform and software subscriptions paid to foreign suppliers. | Is tax withheld by the purchaser, by a platform under Decree 252/2026/ND-CP, or declared by the supplier itself? |
The new decree is a consolidation rather than a new philosophy, but several of its changes alter who must document what. These are the ones that matter for a foreign-invested operating company.
Decree 255/2026/ND-CP was issued on 30 June 2026, took effect on 1 July 2026 and applies from the 2026 corporate income tax period. It replaced Decree 132/2020/ND-CP and Decree 20/2025/ND-CP and aligns the related-party rules with the Law on Tax Administration 108/2025/QH15.
In the exemption for companies that earn set operating margins, the revenue ceiling rose from VND 200 billion to VND 500 billion and the previous requirement to perform only simple functions was removed. The margin conditions themselves, 5 percent for distribution, 10 percent for manufacturing and 15 percent for toll manufacturing, were not changed.
A Vietnamese ultimate parent entity prepares a country-by-country report where consolidated group revenue in the preceding fiscal year was EUR 750 million or more. A Vietnamese subsidiary of a foreign group files locally only in specific cases, such as where no exchange agreement is in place or the foreign parent has failed to file.
Benchmarking draws first on publicly available information, then on commercial databases and then on the tax authority's own databases. Existing benchmarking studies should be checked against that order before they are relied on for the 2026 period.
A tax examination focused on related-party transactions can run for up to 40 days, extendable once by a further 40 days, and up to two years where information has to be exchanged with foreign tax authorities.
The limit on deductible interest for companies with related-party transactions remains at 30 percent of EBITDA, with disallowed interest eligible to be carried forward for up to five years. Companies already carrying forward disallowed interest should review how the transitional provisions apply to their balances.
Documentation is where a transfer pricing position is either defended or lost. The aim is a file that explains the pricing in the company's own terms and agrees with every return that relies on it.
Each year the company discloses its related-party relationships and transactions in Appendix I with its corporate income tax finalisation. Decree 255 added an incorrect declaration in Appendix I to the grounds on which the tax authority may reassess, so the disclosure deserves the same care as the return itself.
The local file sets out the Vietnamese company's functions, assets and risks, characterises each type of related-party transaction, explains the method chosen and presents the benchmarking behind the arm's length result. It is prepared for each year and kept ready to be provided when the tax authority asks for it.
The master file describes the group: its business, value chain, intangibles, financing and financial position. It is normally prepared by the group, and the Vietnamese company needs a version it can provide on request that is consistent with its own local file.
Documentation that contradicts the corporate income tax return, or the foreign contractor tax treatment of the same payment, is a weakness in any examination. We prepare documentation for companies whose accounts and returns we also know, and check the three against each other before anything is filed.
Groups that want certainty on a recurring transaction can apply for an advance pricing agreement under Circular 95/2026/TT-BTC, in force from 1 July 2026. An agreement can cover up to three years of effect and be renewed, and it suits stable, material transactions where the cost of the process is justified.
Vietnamese transfer pricing methodology follows the OECD approach. The method is chosen for each transaction on the facts, and the choice is explained in the local file.
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| Method | How it works | Where it is typically considered |
|---|---|---|
| Comparable uncontrolled price | Compares the price charged between related parties with the price in a comparable transaction between independent parties. | Commodities, standard goods and loans, where reliable comparable prices exist. |
| Resale price | Starts from the price at which a product is resold to an independent customer and deducts an arm's length gross margin. | Distributors that buy from related parties and resell without significant change. |
| Cost plus | Starts from the costs of supplying goods or services and adds an arm's length markup. | Contract manufacturers and routine service providers. |
| Comparable profits (net margin) | Compares the net margin the Vietnamese company earns with the margins of comparable independent companies. | Routine distributors, manufacturers and service providers where transaction level comparables are not available. |
| Profit split | Divides the combined profit from a transaction between the parties according to their contributions. | Highly integrated operations where both sides make unique and valuable contributions. |
Transfer pricing and withholding are separate obligations that land on the same payment. Treating them together is the only reliable way to keep them consistent.
Transfer pricing asks whether the amount of a related-party payment is right. Foreign contractor tax asks what must be withheld from it. Both apply to the same management fee, royalty or interest payment, and the description used for one should not contradict the other: a payment described as a technical service in the contract, as a royalty in the local file and as a management fee in the ledger invites a challenge on all three.
From 1 July 2026 the declaration rules sit in Circular 89/2026/TT-BTC, which replaced the earlier foreign contractor tax circular, and obligations arise payment by payment. Where a double taxation agreement reduces the tax on interest, royalties or service income, the treaty relief application is submitted with the first declaration dossier together with a consular legalised certificate of residence, so the treaty position is best settled when the contract is signed rather than when the first invoice is paid.
We review the schedule of payments to foreign group companies, confirm the treatment and rate for each category, prepare the declarations and keep the evidence that ties each payment to its contract, its transfer pricing analysis and its entry in the books. Where the same company's accounts and returns are with us, that evidence is assembled as the payment is made rather than at year end.
Group financing is subject to exchange control, transfer pricing and interest deductibility rules at the same time. Each has to be satisfied for the loan to work as intended.
Foreign loans with a term of more than one year must be registered with the State Bank of Vietnam, and so must a short term loan that runs beyond one year unless it is fully repaid within 30 working days of the first anniversary of its disbursement. The rules sit in Circular 12/2022/TT-NHNN as amended by Circular 80/2025/TT-NHNN, in force from 25 January 2026.
The rate and terms must be consistent with what an independent lender would offer a borrower with the same profile. A rate set by group policy without reference to the borrower's own position is difficult to support in an examination.
Net interest expense of a company with related-party transactions is deductible only up to 30 percent of EBITDA, with the excess carried forward for up to five years. A company that is funded largely by debt should model the cap before choosing between loan and equity funding.
Drawdowns, interest and principal on a registered foreign loan pass through a designated account at a licensed bank. Under the amended rules a foreign currency loan account can also be used to collect foreign currency for repaying amounts the borrower owes to a party that secured the loan, in or outside Vietnam.
Cross-border transaction advisory is a standing service for an operating company. It connects to, but is distinct from, deal work and the group's global minimum tax process.
This service covers the recurring related-party flows of a company that is already operating: documentation, disclosure, withholding and financing. The tax and legal structuring of an acquisition, disposal or merger is handled as a separate transaction engagement at the moment the deal arises.
For groups within the global minimum tax, the profit allocated to Vietnam through transfer pricing affects the effective tax rate and therefore any supplementary tax. We coordinate the transfer pricing position with the group's global minimum tax analysis so the two are built on the same figures.
At the start of an engagement we review the intercompany agreements, prior documentation and disclosures against Decree 255, so that the first filing for the 2026 period starts from a known position rather than from last year's file carried forward.
Since 2009, Viettonkin has supported 2,000+ businesses, including Fortune 500 and VNR500 companies. In the engagements below, related-party, finance integration and cross-border structuring work formed part of a wider mandate.
Two recently merged ASEAN entities were behind on their integration milestones. Viettonkin led the integration programme, covering organisation design, finance integration, transfer pricing alignment and customer retention monitoring.
Read the case study
Before signing, Viettonkin ran a focused pre-closing review of a Vietnam-side acquisition target. The work covered hidden tax exposures, employment liabilities, intellectual property ownership chains and undisclosed related-party contracts.
Read the case study
A Hong Kong company set up a logistics branch in Vietnam while working with a local business partner. Viettonkin provided nominee shareholder support and carried out the investment and business registration procedures and the bank account opening.
Read the case studyPractical answers on the 2026 related-party rules, documentation and intercompany financing.
Decree 255/2026/ND-CP, which took effect on 1 July 2026 and applies from the 2026 corporate income tax period. It replaced Decree 132/2020/ND-CP and Decree 20/2025/ND-CP, and sits alongside the Law on Tax Administration 108/2025/QH15.
Usually, if the company has related-party transactions. Decree 255 raised the revenue ceiling in the exemption for companies earning set operating margins to VND 500 billion, with the margin conditions of 5 percent for distribution, 10 percent for manufacturing and 15 percent for toll manufacturing unchanged. The exemption is tested each year on the company's own figures.
Not necessarily. For a company with related-party transactions, net interest expense is deductible only up to 30 percent of EBITDA, with the excess carried forward for up to five years, and the rate itself must be at arm's length.
If its term is more than one year, yes: foreign loans of more than one year must be registered with the State Bank of Vietnam under Circular 12/2022/TT-NHNN as amended by Circular 80/2025/TT-NHNN. A short term loan that runs beyond one year must also be registered unless it is fully repaid within 30 working days of the first anniversary of its disbursement.
Generally not. A Vietnamese ultimate parent entity files where consolidated group revenue in the preceding fiscal year was EUR 750 million or more. A subsidiary of a foreign group files locally only in specific cases, for example where there is no exchange agreement with the parent's jurisdiction or the foreign parent has not filed.
Regulatory points checked on 17 September 2026; market statistics checked on 11 September 2026. Requirements depend on the entity, its activities and the period concerned.
Tell us which payments flow between your Vietnamese company and the rest of the group, how they are priced and what documentation exists today. We will map the disclosure, documentation, withholding and registration requirements they create under the 2026 rules.
