AI Summary: Vietnam’s Decree 255/2026/ND-CP, effective from 1 July 2026 and applicable from the 2026 corporate income tax period, replaces Decree 132/2020/ND-CP. For CEOs, CFOs and Group CFOs, the practical issue is not only transfer pricing documentation, but whether new related-party relationships may arise during the tax year through capital, financing, guarantee or management-control transactions.

Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI), corporate governance, and regulatory compliance in Vietnam.

Executive Note for CEOs and CFOs

Vietnam’s transfer pricing regime has entered a new compliance cycle.

Decree 255/2026/ND-CP is not a minor technical amendment. It replaces the previous framework under Decree 132/2020/ND-CP in full and applies from the 2026 corporate income tax period. For foreign-invested companies and multinational groups operating in Vietnam, this means transfer pricing should now be reviewed as a 2026 readiness issue, not only as a year-end tax filing exercise.

The most important management point is this: a company’s related-party position may change during the tax year. Related-party status is no longer only a static ownership question determined at incorporation or group structuring stage. Certain transactions involving capital transfer, borrowing, lending, guarantees, management control, or individuals connected with management may create related-party exposure that CFOs must identify before the annual CIT finalisation.

Why This Matters for Group CFOs

For multinational groups, Vietnam transfer pricing risk usually appears in five places:

1. Intra-group service fees
2. Shareholder or related-party financing
3. Guarantees and financial support arrangements
4. Capital transfers or ownership changes during the year
5. Local documentation that does not match group-level policy

Under Decree 255/2026/ND-CP, the practical risk is that a Vietnam subsidiary may prepare its 2026 tax file using old assumptions, while the new decree requires a broader review of related-party relationships and transactions arising during the year. This is especially relevant where the Vietnam entity has group loans, offshore support charges, management service fees, restructuring transactions, guarantee arrangements, or capital changes involving foreign shareholders.

What Has Changed

The new decree confirms and updates the framework for identifying related-party relationships and managing transfer pricing compliance. Key points:

• Decree 255/2026/ND-CP is effective from 1 July 2026 and applies from the 2026 CIT period.
• It replaces Decree 132/2020/ND-CP (which had itself been amended once, by Decree 20/2025/ND-CP) in full — not a partial revision.
• Related-party relationships continue to include ownership-based thresholds already in place under the prior regime, such as direct or indirect ownership of at least 25% of charter capital, and a largest-shareholder test at 10% of shares.
• The framework introduces a genuinely new, transaction-triggered related-party category: a capital transfer of at least 25% of owner’s equity, or a loan/borrowing of at least 10% of owner’s equity with an individual who manages or controls the company (or that individual’s family members), arising within the tax period, can itself create related-party status — independent of any prior ownership link.
• Guarantee/loan-based related-party tests and management-control tests continue from the prior framework, with new carve-outs clarifying when ordinary lending by a credit institution (under Law No. 32/2024/QH15, as amended by Law No. 96/2025/QH15) does not count as a related-party relationship.
• Article 21 introduces a consultation step: the tax authority must consult with the taxpayer before proceeding to inspect the transfer pricing documentation file — a procedural safeguard alongside the compliance burden.
• Transfer pricing documentation continues to include related-party declaration forms, Local File, Master File and, where applicable, Country-by-Country Reporting.
• The 30% EBITDA-style cap on deductible interest expenses remains unchanged and continues to be an important control point for companies with related-party transactions.
• Not independently re-confirmed this pass: whether the small-taxpayer documentation exemption thresholds under the prior Decree 132/2020 (revenue below VND 50 billion and related-party transaction value below VND 30 billion, among other conditions) carry over unchanged under the new decree’s own exemption article. Companies should confirm this directly before relying on an exemption.

The Real Issue: Readiness Before Review

The real question for CEOs and CFOs is not: “Do we have a transfer pricing file?”

The better question is: “Does our 2026 transfer pricing file reflect all related-party relationships and transactions that actually arose during the year?”

This requires a practical review of:

• shareholder and capital movements;
• loan, guarantee and financial support arrangements;
• service charges and management fees;
• relationships involving directors, controllers or related individuals;
• Vietnam Local File consistency with the group Master File;
• CbCR responsibility at group level;
• interest expense deductibility;
• exemption assumptions under the new decree.

Recommended CFO Action Plan

Before the 2026 CIT finalisation cycle, foreign-invested companies should:

1. Prepare a 2026 related-party relationship map.
2. Review all transactions arising from 1 July 2026 onward.
3. Identify capital transfers, shareholder loans, guarantees and management-control links.
4. Recheck whether Local File and Master File assumptions remain accurate.
5. Confirm CbCR responsibility with the overseas parent company.
6. Review interest expense deductibility under the 30% cap.
7. Validate any exemption position before relying on it.
8. Prepare supporting documents before any tax authority consultation or review under Article 21.

ECOVIS Advisory Angle

ECOVIS Vietnam Law recommends a Vietnam Transfer Pricing Readiness Review 2026 for FDI companies with related-party transactions, intra-group financing, management service charges, guarantees, capital restructuring, or group-level reporting obligations.

The review covers:

• related-party mapping;
• transaction-trigger scan;
• loan and guarantee review;
• Local File and Master File gap check;
• CbCR responsibility confirmation;
• exemption review;
• preparation for tax authority consultation or inspection.

Author Attribution

Attorney Vu Manh Quynh is the Managing Partner of ECOVIS Vietnam Law, advising international investors on Foreign Direct Investment (FDI), corporate governance, and regulatory compliance in Vietnam.

Disclaimer

This material is for general informational purposes only and does not constitute legal, tax or professional advice. Investors should seek specific advice based on their business sector, ownership structure and investment location in Vietnam.