New Government’s Decree prescribing tax administration for enterprises having related-party transactions in Vietnam

09:56, 07/11/2020

Recently, the Government of Vietnam has issued the Decree No. 132/2020/NĐ-CP prescribing tax administration for enterprises having related-party transactions.

According to the Decree No. 132/2020/NĐ-CP of Vietnam’s Government, related parties are parties having relationships where: A party is directly or indirectly involved in the management, control of, contribution of capital to, or investment in, the other party; Parties are directly or indirectly affected by the management, control of, contribution of capital, or investment, from the other party.

Related parties shall be subject to the following specific provisions:

- An enterprise participates directly or indirectly in at least 25% of the other enterprise’s equity;

- Each of the two enterprises has at least 25% of its equity held, whether directly or indirectly, by a third party;

- An enterprise is the shareholder having the greatest ownership interest in the other enterprise, or participates directly or indirectly in at least 10% of total share capital of the other enterprise;

- An enterprise guarantees or offers another enterprise a loan under any form (even including third-party loans guaranteed by financing sources of related parties and financial transactions of same or similar nature) to the extent that the loan amount equals at least 25% of equity of the borrowing enterprise and makes up for more than 50% of total medium and long term debts of the borrowing enterprise;

- …

View more details at the Decree No. 132/2020/NĐ-CP of Vietnam’s Government, effective from December 20, 2020.

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