Transfer Pricing
Country Summary

This document outlines transfer pricing regulations in Vietnam, particularly focusing on Decree 20 and Circular 41, which align with OECD BEPS Action 13. These regulations enforce a three-tiered transfer pricing documentation system. It also provides definitions of related parties, details on legal requirements, and penalties for non-compliance, enhancing transfer pricing administration in Vietnam.


Vietnam has implemented transfer pricing regulations in accordance with BEPS Action 13. These measures require taxpayers to maintain three-tiered transfer pricing documentation. This alignment with the OECD Guidelines and BEPS proposals strengthens Vietnam’s legal foundation for transfer pricing administration and anti-avoidance efforts.

Laws & Regulations

a) References to OECD/EU/Local Rules: Transfer pricing rules in Vietnam have evolved through legal frameworks, including the Foreign Investment Law of 1996 and circulars issued by the Ministry of Finance. Notably, Circular 66/2010/TT-BTC was replaced by Decree 20/2017/ND-CP, which adheres to OECD guidelines and BEPS actions.

b) Definition of Related Party: Circular 66 defines related parties in various scenarios, such as when one party is involved directly or indirectly in another’s management, control, or investment. Decree 20 further elaborates on related parties, providing specific provisions for determining relatedness.

c) Nature of Transfer Pricing Documentation: While Vietnam is not an OECD member, Decree 20 and Circular 41 incorporate BEPS concepts, making them relevant even without formal OECD recognition.

d) Tax Havens & Blacklists: Vietnam has published a list of countries considered tax havens. Several nations are included, indicating strict regulations for transactions with these countries.

e) Advance Pricing Agreement (APA): Vietnam permits APAs, offering taxpayers opportunities for revenue collection and losses reduction. APAs can be bilateral or multilateral and must be approved by various government authorities.

f) Audit Practice: Vietnam follows an Action Plan for Transfer Pricing Management, with a focus on assessing transfer pricing risks. Multinationals with consistent losses expanding operations may face scrutiny.

Transfer Pricing Documentation a) Level of Documentation: Decree 20 introduces a three-tiered transfer pricing documentation system, including a master file, local file, and a country-by-country report.

b) Industry Analysis: An industry analysis identifies value drivers to determine industry-specific profitability levels.

c) Company Analysis: This section includes details on the company’s management structure, business strategies, and involvement in business restructurings or intangible transfers.

d) Functional Analysis: It assesses significant activities, responsibilities, tangible and intangible assets, and risks involved in intercompany transactions, aligning with OECD guidelines.

e) Choice of Transfer Pricing Method: Vietnam allows various transfer pricing methods, with no hierarchy among them. However, CUP is often preferred by tax authorities.

f) Economic Analysis – Benchmark Study: The comparables used must correspond to the same financial year as the transaction. Preceding years’ data can be used when current information is unavailable. Internal databases may be used for compliant taxpayers.

g) Inter-company (IC) Legal Agreement: The importance of the “conduct of parties” is emphasized over formal legal agreements.

h) Financial Statements: Vietnamese businesses must retain records, accounting books, and financial statements for at least ten years.

i) Production Process for TP Relevant Returns, Documents, Forms, and Financials: The chart outlines filing requirements, formats, deadlines, thresholds, and mandatory languages for various documentation.

k) Notification Requirement: Vietnamese taxpayers with overseas ultimate parent entities (UPE) subject to a CbC report must file a notification with Vietnamese tax authorities.

l) Record Keeping: Documentation must exist at the time of the transfer pricing transaction.

m) Penalties and Interest Charges: Non-compliance may result in administrative penalties and interest charges, with penalties ranging from VND 500,000 to VND 5 million.

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