Vietnam: 03 new legislative documents regarding taxes, fees, charges come into force from March 2025

Vietnam: 03 new legislative documents regarding taxes, fees, charges come into force from March 2025

From March 1, 2025, several important policies related to taxes, fees, and charges officially take effect, directly impacting businesses and citizens. Among them, three new legislative documents on taxation will bring significant changes regarding tax rate regulations, administrative procedures, and applicable fees and charges in the upcoming period.

Below are the details of the 03 new legislative documents regarding Taxes, Fees, Charges effective from March 2025:

(1) Decree 20/2025/ND-CP amends Decree 132/2020/ND-CP on tax management for businesses with related transactions

On February 10, 2025, the Government of Vietnam issued Decree 20/2025/ND-CP amending and supplementing several articles of Decree 132/2020/ND-CP regarding tax management for businesses with related transactions.

Issued on: February 10, 2025

Effective from: March 27, 2025, applied from the 2024 corporate income tax period

Contents: Decree 20/2025/ND-CP amends and supplements several provisions in Decree 132/2020/ND-CP concerning tax management for enterprises with related transactions. Specifically:

*Amended and Supplemented Provisions

- Amends, supplements point (d) and point (k) and adds point (m) to item 2 of Article 5 in Decree 132/2020/ND-CP covering parties in related transactions.

- Amends, supplements item 2 of Article 21 in Decree 132/2020/ND-CP regarding the responsibilities of the State Bank in monitoring and providing information related to related transactions.

- Replaces Appendix 1 on information related to affiliates and related transactions with a new Appendix issued along with Decree 20/2025/ND-CP...Download

*Transitional Provisions on Interest Expenses from the Tax Period 2020 - 2023

Businesses with affiliated relations and related transactions as defined by Decree 132/2020/ND-CP and Decree 20/2025/ND-CP... Download handle non-deductible interest expenses as follows:

- When there are no affiliated relations:

Interest expenses not deductible from previous tax periods (up to the end of 2023) will be evenly allocated into subsequent tax periods as regulated at point (b) item 3, Article 16 Decree 132/2020/ND-CP

- When there are affiliated relations and transactions:

Interest expenses not deductible from previous periods will follow the regulations at point (b) item 3, Article 16 Decree 132/2020/ND-CP.

(2) Circular 06/2025/TT-BTC amending Circulars on charges and fees

On January 24, 2025, the Minister of Finance issued Circular 06/2025/TT-BTC amending, supplementing certain articles of the Circulars by the Minister of Finance on charges and fees.

- Issued on: January 24, 2025

- Effective from: March 10, 2025

- Key contents:

+ Amendments to the regulations on organizing the collection of charges and fees in the sectors of tourism, aquaculture, and transportation.

+ Specifically, it clarifies the state authorities with jurisdiction to appraise and issue related permits and certificates as the organization collecting charges and fees according to regulations.

+ Adjustments to the regulations on collection rates, policies on collection, submission, and management of charges and fees in the mentioned sectors to align with current practices and legal regulations.

(3) Circular 01/2025/TT-BCT on tariff quotas for salt and poultry eggs imports for 2025

- Issued on: January 15, 2025

- Effective from: March 2, 2025 to December 31, 2025

- Key contents:

+ Stipulating the import tariff quotas for salt and poultry eggs in 2025.

+ Specifically, the import quota for salt is 92,400 tons; for chicken eggs, duck eggs, goose eggs, and other types of poultry eggs is 72,104 dozen each type.

+ The objective of the Circular is to effectively manage the import of these items, ensuring supply-demand balance and stabilizing the domestic market.

Updating and complying with these new regulations are essential to ensure business activities and transactions related to taxes, fees, and charges are conducted in accordance with the law.

Note on registration fees for electric cars: According to Decree 10/2022/ND-CP, from March 1, 2022, battery-powered electric cars are exempt from the initial registration fee for 3 years (until February 28, 2025). Then, from March 1, 2025, the initial registration fee will be 50% of the fee for gasoline/diesel cars with the same seating capacity. This notable change is effective at the beginning of March 2025. There is discussion on extending this exemption to February 28, 2027 through a draft amendment of Decree 10/2022/ND-CP, but as of now, no official confirmation has been made that the draft has been passed.

Vietnam: 03 new legislative documents regarding taxes, fees, charges come into force from March 2025 (Image from Internet)

What are the principles for applying related transactions in Vietnam?

According to Article 3 of Decree 132/2020/ND-CP, the principles for applying related transactions are defined as follows:

- Taxpayers with related transactions are required to exclude factors that diminish tax obligations due to controlled affiliated relations, and they must declare, identify tax obligations for related transactions comparable to independent transactions under similar conditions.

- Tax authorities administer, inspect, and audit the prices of taxpayers' related transactions based on independent transaction principles, and the essence of activities and transactions determine the corresponding tax obligations with the value created by the nature of the transactions or business activities. They do not recognize related transactions not following independent transaction principles that reduce the enterprise's tax obligations with the state budget and perform price adjustment for such transactions to accurately determine tax obligations outlined in Decree 132/2020/ND-CP.

When are taxpayers exempt from declaring and preparing dossiers for determining related transaction prices in Vietnam?

According to Article 19 of Decree 132/2020/ND-CP, the cases for taxpayers exempt from declaring and preparing Dossiers for determining related transaction prices include:

(1) Taxpayers are exempt from declaring the determination of related transaction prices in section III, section IV Appendix I issued together with Decree 132/2020/ND-CP, exempt from preparing the Dossiers for determining related transaction prices as per Decree 132/2020/ND-CP in cases where only transactions with affiliated parties, who are corporate income tax filers in Vietnam, using the same tax rate as taxpayers and none benefiting from corporate income tax incentives in the tax period, but must declare the exemption basis in section I, section II in Appendix I issued with Decree 132/2020/ND-CP.

(2) Taxpayers are responsible for declaring the determination of related transaction prices per Appendix I issued with Decree 132/2020/ND-CP but are exempt from preparing the Dossiers for determining related transaction prices in the following cases:

- Taxpayers have related transactions with a total revenue below 50 billion VND and total value of all related transactions arising in the tax period below 30 billion VND;

- Taxpayers entered into an Advance Pricing Agreement (APA) and submit an annual report under the regulations on APA. For related transactions not covered by the APA, taxpayers are responsible for declaring the determination of related transaction prices according to the regulations at Article 18 of Decree 132/2020/ND-CP;

- Taxpayers conduct businesses with simple functions, do not generate revenue or expenses from intangible property use, have revenues below 200 billion VND, apply a net profit margin before interest and corporate income tax expenses (excluding financial activities' revenue and expenses) on net turnover. It includes fields such as:

+ Distribution: From 5% or more;

+ Production: From 10% or more;

+ Processing: From 15% or more.

If taxpayers separately track and account for revenues, expenses in each field, they apply a net profit margin before interest and corporate income tax costs on net revenue corresponding to each field.

If taxpayers separately account for revenue but do not track or separately account for incurred expenses in each field, they will allocate expenses proportionally based on revenue of each field to apply the net profit margin before interest and corporate income tax on net revenue corresponding to each field.

If taxpayers do not separately track or account for revenue and expenses of each business activity to determine the net profit margin before interest and corporate income tax corresponding to each area, they apply the net profit margin before interest and corporate income tax on the net revenue of the field with the highest ratio.

If taxpayers do not apply the net profit margin as specified here, they must prepare Dossiers for determining related transaction prices as regulated.

(3) Taxpayers who are exempt from declaring, preparing Dossiers for determining related transaction prices as per items 1, 2 of Article 19 Decree 132/2020/ND-CP, the determination of total deductible interest costs when calculating corporate income tax of enterprises with related transactions is conducted according to the provisions at item 3, Article 16 Decree 132/2020/ND-CP.