Amendments and supplements to Decree 132 on tax administration for enterprises engaging in related-party transactions in Vietnam

Amendments and supplements to Decree 132 on tax administration for enterprises engaging in related-party transactions in Vietnam

Decree 20/2025/ND-CP has amended and supplemented certain provisions of Decree 132/2020/ND-CP effective from March 27, 2025, as follows:

(1) Amendment and supplementation of regulations on related parties (points d, k, and m, clause 2, Article 5 of Decree 132/2020/ND-CP)

(2) Amendment and supplementation of regulations on the responsibilities of the State Bank (clause 2, Article 21 of Decree 132/2020/ND-CP)

(3) Replacement of Appendix I - Information on Related Parties and Transactions issued with Decree 132/2020/ND-CP dated November 5, 2020, from the Government of Vietnam on tax management for enterprises with related-party transactions with Appendix I issued with Decree 20/2025/ND-CP.

Additionally, regarding transitional regulations, Decree 20/2025/ND-CP states as follows:

In cases where, during the corporate income tax period for the years 2020, 2021, 2022, and 2023, a borrowing enterprise only has a related-party relationship with an economic organization operating under the Law on Credit Institutions, as stated in point d, clause 2, Article 5 of Decree 132/2020/ND-CP, and the borrowing enterprise with the lender or guarantor falls under the scenario specified in points d.1 and d.2, clause 2, Article 5 of Decree 132/2020/ND-CP, which is amended and supplemented in Article 1 of Decree 20/2025/ND-CP, has related-party transactions subject to the scope of regulation as stated in clause 2, Article 1 of Decree 20/2025/ND-CP and has non-deductible interest expenses as regulated in point a, clause 3, Article 16 of Decree 132/2020/ND-CP, from the tax period of 2024 onward, they shall proceed as follows:

- In case the enterprise does not have a related-party relationship and does not incur related-party transactions in accordance with Decree 132/2020/ND-CP and Decree 20/2025/ND-CP, the non-deductible interest expenses that have not been carried over to subsequent tax periods by the end of the tax period of 2023 shall be evenly distributed to subsequent tax periods for the remaining period as regulated by the interest expense carry-over period at point b, clause 3, Article 16 of Decree 132/2020/ND-CP.

- In case the enterprise has a related-party relationship and related-party transactions in accordance with Decree 132/2020/ND-CP and Decree 20/2025/ND-CP, the non-deductible interest expenses that have not been carried over to subsequent tax periods shall proceed in accordance with point b, clause 3, Article 16 of Decree 132/2020/ND-CP.

More details can be found in Decree 20/2025/ND-CP, effective from March 27, 2025, and applicable from the corporate income tax period of 2024.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE