Amendments to tax management regulations for enterprises with related party transactions in Vietnam

Amendments to tax management regulations for enterprises with related party transactions in Vietnam​ (Image from internet)

The Government of Vietnam promulgated Decree 20/2025/ND-CP on February 10, 2025, amending Decree 132/2020/ND-CP which regulates tax management for enterprises with related party transactions.

Amendments to tax management regulations for enterprises with related party transactions in Vietnam

* Amendments and Supplements to Regulations on Related Parties:

Decree 20/2025/ND-CP amended and supplemented point d, point k, and added point m to Clause 2, Article 5 of Decree 132/2020/ND-CP regarding related parties as follows:

- Amending and supplementing point d as follows:

An enterprise guarantees or lends to another enterprise in any form (including third-party loans guaranteed by the related party's financial resources and similar financial transactions) provided that the total foreign debt of the borrowing enterprise with the lending or guaranteeing enterprise is at least 25% of the owner's contributed capital of the borrowing enterprise and accounts for more than 50% of total medium and long-term debts of the borrowing enterprise.

The above regulation does not apply to the following cases:

- The guarantor or lender is an economic organization operating under the provisions of the Law on Credit Institutions that does not participate, directly or indirectly, in managing, controlling, contributing capital, or investing in the borrowing enterprise or the guaranteed enterprise as stipulated in points a, c, d, e, g, h, k, l, and m of Clause 2, Article 5 of Decree 132/2020/ND-CP (amended in Decree 20/2025/ND-CP).

- The guarantor or lender is an economic organization operating under the provisions of the Law on Credit Institutions, and the borrowing enterprise or guaranteed enterprise is not subject, directly or indirectly, to joint management, control, capital contribution, or investment by another party as stipulated in points b, e, and i of Clause 2, Article 5 of Decree 132/2020/ND-CP (amended in Decree 20/2025/ND-CP).

- Amending and supplementing point k as follows:

Other cases where an enterprise (including an independent accounting branch that declares and pays corporate income tax) is under the actual management, control, and decision-making with respect to the business activities of another enterprise;

- Adding point m as follows:

A credit institution with a Subsidiary or a Controlling or Associated Company of the credit institution according to the Law on Credit Institutions and its amendments, supplements, or replacements (if any);

* Amendments and Supplements to the Responsibilities of the State Bank with Enterprises having Related Party Transactions:

Decree 20/2025/ND-CP amended and supplemented Clause 2, Article 21 of Decree 132/2020/ND-CP regarding the responsibilities of the State Bank with enterprises having related party transactions as follows:

Collaborate in providing information and data on foreign loans and repayments for specific enterprises with related party transactions based on the list requested by the tax authority, including data on loan amounts, interest rates, interest and principal repayments, actual capital withdrawal, and repayments (principal, interest) and other related information (if any).

Collaborate in providing information reported according to the law on related persons of the members of the Board of Directors, Members' Council, Supervisory Board, General Director (Director), Deputy General Director (Deputy Director), and equivalent positions according to the charter of the credit institution; related persons of shareholders owning 1% or more of the charter capital of the credit institution; Associated Companies of the credit institution based on the information management data system of the State Bank when requested by the tax authority.

* Replacement of Appendix I - Information on Related Parties and Related Party Transactions

Decree 20/2025/ND-CP has replaced Appendix I - Information on Related Parties and Related Party Transactions issued with Decree 132/2020/ND-CP with Appendix I issued with Decree 20/2025/ND-CP.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE