What is the detailed guidance on declaring the Appendix for related-party transactions in Vietnam according to Decree 20 of 2025?

What is the detailed guidance on declaring the Appendix for related-party transactions in Vietnam according to Decree 20 of 2025?

Based on Appendix I of Decree 20/2025/ND-CP, the taxpayer is advised to fill out Appendix I Information on Associated Relationships and related-party transactions as follows:

GUIDANCE ON COMPLETING CERTAIN INDICATORS

A. Tax Calculation Period: Fill in the information corresponding to the tax period of the Corporate Income Tax finalization declaration. The tax period is defined according to the Corporate Income Tax Law.

B. General Information of the Taxpayer: From indicators [01] to [10], record the information corresponding to what is stated in the Corporate Income Tax finalization declaration.

C. Section I. Information on Associated Parties:

- Column (2): Fully record the name of each associated party:

+ If the associated party in Vietnam is an organization, record as per the information on the business registration certificate; for individuals, record as per the information on the ID card, citizen identity card, passport.

+ If the associated party is an organization or individual outside Vietnam, record as per the information on documents determining the associated relationship such as the business registration certificate, contract, or transaction agreement with the associated party.

- Column (3): Record the country or territory where the associated party is a resident.

- Column (4): Record the tax identification number of the associated parties:

+ If the associated party is an organization or individual in Vietnam, record the full tax identification number.

+ If the associated party is an organization or individual outside Vietnam, record the full tax identification number or taxpayer identification code, and if not available, specify the reason.

- Column (5): Based on the regulations in clause 2, Article 5 of Decree 132/2020/ND-CP and Article 1 of Decree 20/2025/ND-CP, taxpayers with related-party transactions declare the form of associated relationship corresponding to each associated party by marking “x” in the appropriate box. If the associated party belongs to more than one form of associated relationship, the taxpayer marks “x” in all appropriate boxes.

D. Section II. Cases Exempt from Declaration, Exempt from Dossier Preparation for Determining Transfer Pricing:

If the taxpayer is exempt from declaring, exempt from preparing the transfer pricing files as regulated in Article 19 of Decree 132/2020/ND-CP, indicate an “x” in the corresponding exemption box in Column (3).

If the taxpayer is exempt from declaration and preparation of the transfer pricing files according to clause 1, Article 19 of Decree 132/2020/ND-CP, they should mark an “x” only in the appropriate box in Column (3) and do not need to complete Sections III and IV of Appendix I attached to Decree 20/2025/ND-CP.

If the taxpayer is exempt from preparing the transfer pricing files according to point a or c, clause 2, Article 19 of Decree 132/2020/ND-CP, they should complete Sections III and IV according to the corresponding guidance in sections D.1 and E.

If the taxpayer is exempt from preparing the transfer pricing files according to point b, clause 2, Article 19 of Decree 132/2020/ND-CP, they should complete it according to the corresponding guidance in sections D.2 and E.

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**>>>**Download the detailed guidance file on completing Appendix I of Decree 20 Here

**>>>**Download Appendix I and the detailed guidance file on completing Appendix I of Decree 20 Here

What is the detailed guidance on declaring the Appendix for related-party transactions in Vietnam according to Decree 20 of 2025? (Image from the Internet)

What are the principles for applying related-party transactions in Vietnam?

Based on Article 3 of Decree 132/2020/ND-CP, the principles for applying related-party transactions are regulated as follows:

- Taxpayers with related-party transactions must exclude factors that reduce tax liabilities due to controlling associated relationships to declare and determine tax obligations for related-party transactions equivalent to independent transactions under the same conditions.

- Tax authorities manage, inspect, and audit the transfer pricing of taxpayers according to the independent transaction principle and the essence of transactions and activities that determine the corresponding tax obligations to the value generated from the essence of transactions and activities of the taxpayer, and do not recognize related-party transactions not following the independent transaction principle that reduces the tax liabilities of enterprises to the state budget. Price adjustments to such related-party transactions are made to determine the correct tax obligations as per Decree 132/2020/ND-CP.

When are taxpayers exempt from declaration and preparing the transfer pricing files in Vietnam?

Based on Article 19 of Decree 132/2020/ND-CP, cases in which taxpayers are exempt from declaration and preparation of the transfer pricing files include:

(1) Taxpayers are exempt from declaring the determination of transfer pricing at sections III and IV of Appendix I issued with Decree 132/2020/ND-CP, and exempt from preparing the transfer pricing files as regulated by Decree 132/2020/ND-CP in cases where only transactions with associated parties who are corporate income taxpayers in Vietnam occur, applying the same corporate income tax rate as the taxpayer and none enjoying corporate income tax incentives during the tax period. However, the exemption basis must be declared in sections I and II of Appendix I issued with Decree 132/2020/ND-CP.

(2) Taxpayers are responsible for declaring the determination of transfer pricing according to Appendix I issued with Decree 132/2020/ND-CP but are exempt from preparing the transfer pricing files in the following cases:

- Taxpayers have related-party transactions, but the total revenue for the tax calculation period is less than 50 billion VND, and the total value of all related-party transactions is less than 30 billion VND.

- Taxpayers have signed an Advance Pricing Agreement and submit the annual report as per the legal regulations on Advance Pricing Agreements. Transactions outside the scope of the Advance Pricing Agreement require taxpayers to declare transfer pricing in accordance with Article 18 of Decree 132/2020/ND-CP.

- Taxpayers conducting business with simple functions, without revenue or expenses from intangible asset exploitation, have a revenue of less than 200 billion VND, applying a net profit margin rate before interest expenses and corporate income tax (excluding financial transaction revenue and expense differences) on net revenue, including the following fields:

+ Distribution: From 5% or more;

+ Production: From 10% or more;

+ Processing: From 15% or more.

In cases where taxpayers separately track and account for revenue and expenses for each field, apply the net profit margin rate before interest expenses and corporate income tax on net revenue corresponding to each field.

In cases where taxpayers separately track and account for revenue but not expenses for each field, allocate expenses by revenue ratio of each field to apply the net profit margin rate before interest expenses and corporate income tax on net revenue corresponding to each field.

In cases where taxpayers do not separately track and account for both revenue and expenses for each field to determine the net profit margin rate before interest expenses and corporate income tax corresponding to each field, apply the highest net profit margin rate before interest expenses and corporate income tax on net revenue of the field with the highest rate.

In cases where taxpayers do not apply the net profit margin rate as regulated in this point, they must prepare the transfer pricing files.

(3) Taxpayers who are exempt from declaration and preparing the transfer pricing files under clauses 1 and 2, Article 19 of Decree 132/2020/ND-CP, the determination of the total deductible interest expense when determining the taxable income of enterprises with related-party transactions is conducted according to clause 3, Article 16 of Decree 132/2020/ND-CP.