Vietnam Transfer Pricing in 2026: Compliance, Documentation, and Audit Readiness

Vietnam’s transfer pricing rules affect foreign-invested and domestic enterprises that transact with related parties. From the 2026 corporate income tax (CIT) period, Decree No. 255/2026/ND-CP governs how these transactions are identified, priced, disclosed, and documented. For business leaders, the priority is to align group policy with the Vietnamese entity’s actual functions, financial results, financing, and evidence before year-end.

Key takeaways

• Decree 255 applies from the 2026 CIT period and replaces Decree 132/2020/ND-CP and Decree 20/2025/ND-CP.
• Related-party status can arise through ownership, control, management, financing, guarantees, family relationships, and other specified arrangements—not only the 25 percent ownership test.
• Related-party disclosures generally accompany the annual CIT finalisation return. A documentation exemption does not necessarily remove the disclosure obligation.
• Net interest expense is generally deductible up to 30 percent of tax EBITDA; eligible disallowed amounts may be carried forward for up to five years.
• Audit readiness depends on consistency between contracts, actual conduct, benchmarking, accounts, tax returns, customs data, and supporting evidence.

ALSO READ: Vietnam Consolidates Transfer Pricing Rules under Decree 255/2026

How do Vietnam’s transfer pricing rules work?

Related-party transactions must follow the arm’s length principle: their price and conditions should be consistent with those agreed by independent parties in comparable circumstances. The analysis considers the functions performed, assets used, risks assumed, contractual terms, economic conditions, and business strategy – not price alone.

If pricing or profit allocation is unsupported, the tax authority may adjust revenue, expenses, margins, taxable income, and CIT. This makes transfer pricing a management issue as well as a tax-filing exercise, particularly where a Vietnamese subsidiary records recurring losses, pays material group charges, or relies on related-party debt.

Which businesses and transactions are in scope?

Foreign ownership alone does not determine whether the rules apply, and transactions need not be cross-border. Businesses should review their related-party map annually because loans, guarantees, restructurings, ownership changes, and management appointments can change their status during the tax period.

Transfer pricing methods and benchmarking

Vietnam recognises the comparable uncontrolled price, resale price, cost plus, transactional net margin, and profit split methods. The method should fit the transaction and available evidence; it should not be selected merely because it produces the lowest tax outcome.

Internal comparables should be considered first, followed by suitable Vietnamese external comparables and, where necessary, appropriately selected regional comparables. If regional data are used, the taxpayer should explain why reliable Vietnamese comparables were unavailable and address material geographic differences. Management should also test whether the selected method reflects the Vietnamese entity’s actual decision-making, people, assets, and risk control.

What must be filed and prepared?

Enterprises with related-party transactions generally file the prescribed disclosure with the annual CIT finalisation return. Where required, the Local File and Master File must be prepared before the annual CIT finalisation filing and retained for submission to the tax authority. Decree 255 allows up to 30 working days to provide the documentation during pre-audit consultation, with one extension of up to 15 working days where justified.

A country-by-country report (CbCR) may apply where the multinational group meets the filing conditions. For a Vietnamese ultimate parent entity, the threshold is consolidated group revenue of at least EUR 750 million in the preceding financial year. The report is generally due within 12 months of the ultimate parent’s year-end. Overseas-parented groups should assess Vietnam’s notification, local-filing, and automatic-exchange rules; CbCRs are submitted electronically in encrypted XML format.

Who may qualify for a documentation exemption?

Decree 255 provides exemptions in specified cases, including:

• Total annual revenue below VND 50 billion and total related-party transactions below VND 30 billion;
• Qualifying domestic transactions where the parties apply the same CIT rate and neither receives a CIT incentive in the period;
• Transactions covered by an effective advance pricing agreement (APA), subject to relevant reporting; and
• Qualifying businesses with revenue below VND 500 billion, no revenue or costs from exploiting or using intangible assets, and minimum operating margins of 5 percent for distribution, 10 percent for manufacturing, or 15 percent for processing.

The precise exemption and declaration requirements differ by category. Businesses should document why an exemption applies; arm’s length pricing and the interest deduction rules can still remain relevant.

Related-party financing: the 30 percent tax-EBITDA cap

For an enterprise with related-party transactions, deductible net interest expense is generally limited to 30 percent of an adjusted earnings amount. This amount is calculated by adding net interest expense and depreciation to net profit from business operations. Net interest expense is determined after deducting qualifying interest income from deposits and loans. Eligible interest expenses exceeding the limit may generally be carried forward for up to five consecutive years, subject to the applicable rules and exclusions.

Foreign-invested enterprises should model the cap before borrowing or refinancing. Transfer pricing, foreign-loan registration, withholding tax, investment-capital limits, and cash flow are connected but separate considerations; satisfying one requirement does not establish compliance with the others.

What raises transfer pricing audit risk?

• Recurring losses despite growth in revenue, capacity, or market presence;
• Margins outside a supportable arm’s length range;
• Large or changing service fees, royalties, or other intra-group charges;
• Services without evidence of delivery or commercial benefit;
• Related-party financing without credit and pricing support;
• Restructurings or transfers involving functions, risks, assets, or intangibles; and
• Differences between agreements, actual conduct, disclosures, accounts, tax returns, and customs filings.

Consequences may include adjusted taxable income, additional CIT, late-payment interest, administrative penalties, and in serious cases – tax-evasion sanctions. Cross-border adjustments may also create double taxation, making treaty relief or a mutual agreement procedure relevant.

How we can help

Our transfer pricing specialists help foreign-invested and domestic businesses identify related-party exposure, prepare disclosures and documentation, conduct benchmarking, review intra-group agreements and financing, and manage tax-examination risk in Vietnam.