Vietnam Transfer Pricing Developments: What Multinational Businesses Need to Know in 2026

Vietnam's transfer pricing regime is primarily governed by Decree 132/2020/ND-CP and Decree 20/2025/ND-CP, which amended several provisions of Decree 132. Effective from 27 March 2025, Decree 20 applies from the 2024 Corporate Income Tax (CIT) period onwards.

Businesses engaging in related-party transactions are required to disclose related-party relationships and transactions as part of their annual Corporate Income Tax finalisation process.

Taxpayers are also generally required to prepare and maintain a comprehensive transfer pricing documentation package, including:

• Transfer pricing disclosure forms
• Local File documentation
• Master File documentation
• Country-by-Country Report (where applicable)

Transfer pricing documentation should be prepared before the annual CIT filing deadline and maintained for inspection purposes. Upon request from the tax authorities, taxpayers are generally required to provide the documentation within 30 working days.

Failure to comply with these requirements may increase transfer pricing risk and lead to additional scrutiny during tax audits.

Recent guidance indicates that Vietnamese tax authorities are expected to intensify their review of loss-making foreign-invested enterprises (FDIs), particularly businesses reporting consecutive losses while continuing to expand operations or increase capital.

Increased Review of Loss-Making Enterprises

Businesses that continue to report losses over multiple years may face increased scrutiny, particularly where financial performance appears inconsistent with ongoing expansion activities.

Tax authorities may seek additional explanations and supporting documentation to understand the commercial circumstances driving such results.

Scrutiny of Related-Party Transactions

Key review areas include:

• Management and technical service fees
• Royalties and franchise fees
• Related-party financing arrangements
• Intercompany purchase and sale transactions

Tax authorities are also expected to review the commercial rationale of significant expenses, the accuracy of revenue recognition, VAT treatment and the deductibility of operating costs.

Challenges to Intra-Group Charges

Management fees, royalties, technical service fees and other intra-group payments continue to be significant areas of audit focus.

Businesses should be prepared to demonstrate that these arrangements provide tangible economic benefits to the Vietnamese entity and are supported by appropriate documentation.

Tightened Review of Financing Arrangements

Related-party loans and interest expenses are expected to remain under close review, particularly in light of the revised related-party relationship criteria under Decree 20/2025/ND-CP and the application of the 30% EBITDA interest limitation rule.

Tax authorities are increasingly expected to apply the substance-over-form principle when assessing related-party arrangements.

This means that contractual documentation alone may not be sufficient. Businesses should ensure that contractual terms align with the actual functions performed, assets employed and risks assumed by the Vietnamese entity.

Vietnamese tax authorities have the authority to adjust transfer prices, profit margins and taxable income where taxpayers fail to comply with transfer pricing regulations.

Businesses may face a higher risk of transfer pricing challenges, tax reassessments and penalties where they:

• Fail to disclose related-party transactions accurately
• Provide incomplete information relating to related-party transactions
• Fail to provide valid transfer pricing documentation within statutory timelines
• Rely on inaccurate, misleading or unsupported benchmarking analyses
• Maintain insufficient documentation supporting transaction pricing

Where tax authorities determine that transfer prices do not comply with the arm's-length principle, adjustments may be made based on the median value of the arm's-length range, generally determined within the 35th to 75th percentile range.

Such adjustments may result in additional tax liabilities, penalties and late payment interest.

For multinational businesses, maintaining accurate transfer pricing documentation and ensuring consistency across tax filings, financial statements and supporting records can help reduce audit exposure and strengthen compliance readiness.

Vietnam has activated the automatic exchange of Country-by-Country Reports under the Country-by-Country Multilateral Competent Authority Agreement (CbC MCAA) framework.

Vietnam currently maintains effective exchange relationships with 37 jurisdictions, including Singapore, Malaysia, Thailand, Australia, Japan, South Korea, the United Kingdom and several European markets.

For Vietnamese entities whose Ultimate Parent Entity is located in one of these jurisdictions, Country-by-Country Reports will generally be exchanged directly through the Automatic Exchange of Information (AEOI) framework.

This may reduce local filing burdens for eligible taxpayers while increasing transparency and consistency of information available to tax authorities.

Businesses whose Ultimate Parent Entity is located in a jurisdiction that does not have an activated exchange relationship with Vietnam may still be subject to local Country-by-Country Reporting requirements.

Vietnam is also considering further reforms through a draft decree providing guidance under the new Law on Tax Administration.

Key proposed changes include:

Alignment of Country-by-Country Reporting with OECD Standards

• Replacing the existing VND18 trillion threshold with a threshold equivalent to EUR750 million in consolidated group revenue
• Determining the threshold based on the preceding fiscal year's consolidated revenue
• Requiring Country-by-Country Reports to be submitted in encrypted XML format through designated electronic filing platforms

Expanded Use of Tax Administration Data

The draft decree would allow tax authorities to utilise a broader range of tax administration databases, in addition to commercial databases, when assessing the arm's-length nature of related-party transactions.

Enhanced Transparency of Taxpayer Rights and Obligations

The proposed changes are intended to provide greater clarity regarding taxpayer rights, obligations and transfer pricing compliance requirements.

Although the draft does not fundamentally alter Vietnam's transfer pricing methodology, it reinforces the government's commitment to:

• Aligning transfer pricing regulations with OECD standards
• Strengthening data-driven risk assessments
• Accelerating the digitalisation of compliance and reporting
• Reducing compliance burdens for certain Vietnamese-parented groups

As Vietnam continues to strengthen its transfer pricing framework, businesses should move beyond documentation compliance and take a more proactive approach to transfer pricing risk management.

Key actions to consider include:

Reassess Transfer Pricing Policies and Benchmarking Studies

Transfer pricing policies should be reviewed periodically to ensure they remain aligned with the arm's-length principle and accurately reflect current business operations.

Businesses should assess whether existing benchmarking studies remain supportable in light of recent financial performance, changing market conditions and evolving tax authority expectations.

Review Intra-Group Charges and Supporting Evidence

Management fees, technical service fees, royalties and other intra-group charges continue to be key areas of tax authority focus.

Businesses should ensure they can clearly demonstrate:

• The nature of services provided
• The commercial rationale for the arrangement
• The economic benefits received by the Vietnamese entity
• The basis used to determine pricing

Supporting documentation should be maintained contemporaneously and be readily available in the event of a tax audit.

Evaluate Related-Party Financing Arrangements

Groups with intercompany loans should review financing structures, interest rates and supporting documentation to ensure compliance with transfer pricing requirements and interest deductibility rules.

Particular attention should be paid to the revised related-party relationship criteria and the application of Vietnam's EBITDA-based interest limitation rules.

Assess the Sustainability of Loss Positions

Businesses that have reported recurring losses, particularly while continuing to expand operations or increase capital investment, should prepare robust commercial explanations supported by financial and operational data.

This may include documenting market conditions, business expansion strategies, start-up investment phases or other factors that have affected profitability.

Conduct a Transfer Pricing Health Check

Organisations should assess whether transfer pricing positions are applied consistently across:

• Corporate income tax filings
• Transfer pricing disclosure forms
• Financial statements
• Intercompany agreements
• Transfer pricing documentation

Inconsistencies across these documents are often identified during tax audits and may increase transfer pricing risk.

Review Country-by-Country Reporting Obligations

Multinational groups should confirm whether the Ultimate Parent Entity is located in a jurisdiction with an activated Country-by-Country Reporting exchange relationship with Vietnam.

Where local filing obligations may still apply, businesses should ensure reporting processes and responsibilities are clearly defined across the group.

Prepare for Increased Data-Driven Tax Reviews

As Vietnam continues to expand the use of electronic reporting and tax administration databases, businesses should ensure transfer pricing data is accurate, consistent and readily accessible.

A proactive review of documentation quality and data integrity can help strengthen audit readiness and reduce the risk of future disputes.

Managing transfer pricing compliance requires close coordination across tax, finance and compliance functions.

Vistra supports multinational businesses through transfer pricing, tax compliance and regulatory advisory services across Asia-Pacific.

Our specialists can assist with:

• Transfer pricing documentation and compliance reviews
• Related-party transaction assessments
• Country-by-Country Reporting support
• Tax risk assessments and audit readiness reviews
• Corporate income tax compliance
• Ongoing regulatory monitoring and advisory support

By combining local expertise with regional capabilities, we help businesses navigate evolving transfer pricing requirements, manage tax risk and maintain compliance with confidence.