What are Related-Party Transactions?

Le Hai

17:17, 11/07/2024

Linked transactions are specifically regulated in Decree 20/2017/ND-CP on tax administration for enterprises with linked transactions.

Transactions among related parties are transactions arising between entities with a related party relationship in the course of production and business, including:

- Purchasing, selling, exchanging, leasing, subleasing, borrowing, lending, transferring, and assigning machinery, equipment, goods, and provision of services;- Borrowing, lending, financial services, financial guarantees, and other financial instruments;- Purchasing, selling, exchanging, leasing, subleasing, borrowing, lending, transferring, and assigning tangible assets, intangible assets, and joint resource-utilization agreements such as synergy and cooperative exploitation of human resources;- Cost sharing among related parties.

Additionally, Clause 4 Article 4 of Decree 20 also regulates independent transactions as transactions between parties that do not have a related party relationship.

More details can be found in Decree 20/2017/ND-CP which took effect on May 1, 2017.

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