Vietnam transfer pricing Decree 255: Crucial updates for related-party transactions
Vietnam has issued Decree 255/2026/ND-CP on tax administration for related-party transactions. The decree is effective from 1 July 2026 and applies from the 2026 corporate income tax period, replacing Decree 132/2020/ND-CP. The Ecovis consultants explain the general information.
For multinational groups, CEOs, CFOs and group CFOs, the key issue is not only whether transfer pricing documentation exists. The more practical question is whether the Vietnam entity’s related-party relationships and transactions have been properly re-mapped under the new framework.
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What businesses should know
Decree 255/2026/ND-CP keeps several familiar transfer pricing principles, including ownership-based related-party thresholds and the 30% EBITDA-style cap on deductible interest expenses. However, it also reinforces the need to identify related-party relationships arising from transactions during the tax year.
This is particularly relevant for Vietnam subsidiaries with:
- intra-group loans or financial support
- guarantees or security arrangements
- capital transfers or shareholder changes
- management service fees or shared group costs
- transactions involving directors, controllers or related individuals
- country-by-country reporting exposure at group level
For foreign-invested enterprises, related-party analysis should no longer be treated as a static review of ownership structure. It should be updated when relevant transactions occur during the year.
We assist companies with, for example, compliance with transfer pricing regulations, the recording of transactions, or the review of loans and guarantees.
Vu Manh Quynh, Attorney-at-Law, Managing Partner, ECOVIS Vietnam Law, Ho Chi Minh City, Vietnam
Recommended actions for 2026
Companies operating in Vietnam should consider the following steps before finalising the 2026 corporate income tax:
- Update the related-party relationship map for the Vietnam entity
- Review loans, guarantees, capital transfers and management-control arrangements
- Verify that the documentation in the local file and master file continues to reflect the group’s actual business model.
- Confirm country-by-country reporting responsibilities with the ultimate parent company.
- Reassess interest expense deductibility under the 30% cap
- Validate any exemption position before relying on it
- Prepare supporting documents in advance of any tax authority consultation or review
Transfer pricing compliance in Vietnam should not be approached as a year-end documentation exercise only. For foreign-invested companies, the key is to ensure that the legal structure, financing arrangements and actual transactions during the year are properly reflected in the transfer pricing file.
