Vietnam Consolidates Transfer Pricing Rules under Decree 255/2026

On June 30, 2026, the Vietnamese government issued Decree No. 255/2026/ND-CP, replacing and consolidating Vietnam’s transfer pricing framework for related-party transactions.

Effective July 1, 2026, and applicable from the 2026 corporate income tax (CIT) period, Decree No. 255/2026/ND-CP (“Decree 255”) aligns Vietnam’s transfer pricing rules with the Law on Tax Administration No. 108/2025/QH15 and international OECD standards. It was subsequently introduced by the Tax Department through Official Dispatch No. 4697/CT-CS dated July 9, 2026.

The entry into effect of Decree 255 also officially repealed Decree No. 132/2020/ND-CP and Decree No. 20/2025/ND-CP guiding Vietnam’s transfer pricing and related-party regulations, consolidating Vietnam’s transfer pricing rules under a unified directive and simplifying compliance requirements for businesses.

Key changes under Decree 255

Expanded definition of related parties

Find Business Support

Have a question about tax liability in Vietnam? Contact our Tax Team

To ensure that the determination of affiliated relationships is comprehensive, accurately reflects the substance of transactions, and enhances tax administration, Decree 255 revises several core definitions and expands the circumstances under which parties are considered related.

Key updates include:

• Clarified definitions of Ultimate Parent Entity (UPE) and Tax Treaty to align with Global Minimum Tax (GMT) and OECD concepts;
• A related-party relationship is established where:
  • the transfer or acquisition of at least 25 percent of the owner’s contributed capital (equity interest) during the tax period; or
  • loans or borrowings from individuals exercising control over the enterprise (or their related persons) amounting to at least 10 percent of the owner’s contributed capital.
• Certain 100 percent state-owned organizations acting solely as debt purchasers, debt handlers, creditors, or guarantors, without direct or indirect control over the enterprise, are excluded from the related-party definition.

Higher thresholds for transfer pricing documentation exemptions

One of the most business-friendly changes is the relaxation of documentation requirements.

Compared with previous regulations, Decree 255:

• raises the revenue threshold for exemption from transfer pricing documentation from VND 200 billion to VND 500 billion; and
• removes the requirement that taxpayers perform only “simple business functions.”

Standardized transfer pricing databases

To improve consistency during audits, Decree 255 establishes a formal hierarchy for comparable data used in transfer pricing analyses.

The order of priority is:

1. Publicly available databases;
2. Commercial databases;
3. Tax authority databases.

The decree also formally introduces a National Database, which will serve as an additional source for benchmarking analyses.

Country-by-country reporting aligned with OECD standards

Article 19 substantially updates Vietnam’s country-by-country reporting (CbCR) requirements to better align with OECD BEPS Action 13.

Major changes include:

• Revised reporting threshold: The filing threshold changes from VND 18 trillion to EUR 750 million in consolidated group revenue.
• Reference period: The threshold is determined using the preceding financial year’s consolidated revenue rather than the current tax year.
• Clarified local filing obligations: Local CbCR filing is required only in specified circumstances where overseas filing or automatic information exchange conditions are not met.
• Submission requirements: Reports must be submitted electronically through the Tax Management Information System in XML format.
• Notification obligations: Taxpayers must submit the CbCR notification only once using Form 01/TB-BCLN, and updates are required only if information changes, within 90 days of the change.
• Filing deadline: CbCR must be submitted within 12 months after the end of the Ultimate Parent Company’s financial year.

Importantly, the decree also clarifies that CbCR information may not be used as the sole basis for transfer pricing adjustments, limiting its use to risk assessment and international information exchange.

Shift toward a taxpayer support model

Decree 255 signals a broader change in Vietnam’s transfer pricing administration.

Decree 255 also strengthens Vietnam’s transfer pricing administration by reinforcing its risk-based approach while introducing enhanced taxpayer compliance support measures.

Find Business Support

Local expertise and compliance tailored to your business needs

Key measures include:

• Publication of industry profit margin benchmarks by sector, region, or taxpayer group;
• Support for voluntary compliance programs;
• Compliance assistance to reduce transfer pricing risks; and
• Stronger commitments to taxpayer data confidentiality.

Transitional provisions

To ensure continuity, Decree 255 preserves existing benefits for taxpayers applying the interest expense carry-forward provisions under Decree 20.

Eligible taxpayers may continue utilizing remaining deductible interest expenses under the previous rules until their carry-forward period expires.

What businesses should do

Companies with related-party transactions should review their transfer pricing policies ahead of the 2026 CIT filing season. Priority actions include:

• Reassessing whether existing ownership or financing arrangements create related-party relationships under the new rules;
• Determining whether the higher documentation exemption threshold applies;
• Reviewing CbCR obligations based on the new EUR 750 million threshold;
• Updating internal reporting systems to accommodate XML filing requirements; and
• Monitoring forthcoming guidance on industry benchmark profit margins published by tax authorities.

Looking ahead

Decree 255 represents one of Vietnam’s most significant transfer pricing reforms since Decree 132. By aligning domestic rules more closely with OECD standards while simplifying compliance requirements, the new framework aims to improve tax transparency, reduce administrative burdens, and encourage greater voluntary compliance.

For multinational enterprises operating in Vietnam, understanding these changes early will be essential to managing transfer pricing risks under the new regime.

As the international attention on Vietnam is increasing following its inclusion on the European Union’s list of non-cooperative jurisdictions for tax purposes, taxpayers should expect the Vietnamese tax authorities to continue enhancing transfer pricing enforcement.

The updates are projected to place a greater emphasis on transparency, economic substance, and the quality of transfer pricing documentation supporting cross-border related-party transactions.

See also: EU Adds Vietnam to its List of Non-Cooperative Jurisdictions: Tax and Compliance Implications

Managing tax in Vietnam is critical for FDI companies to stay compliant with local regulations, GST requirements, and global standards such as IFRS, navigate complex filings, and apply correct tax treatments. A well-structured tax process helps to avoid penalties and stay 100% compliant.

Luy Doan

Assistant Manager, Tax

Talk to an expert at vietnam@dezshira.com

Or request a consultation at +84 28 3930 2828

• Previous Article Complying with Vietnam’s New Capital Transfer Taxation Rules
• Next Article