Vietnam

Corporate - Group taxation

Last reviewed - 26 March 2025

There is no provision for any form of consolidated filing or group loss relief in Vietnam.

Transfer pricing

Decree 132/2020/ND-CP, effective since 2020, outlines new transfer pricing regulations in Vietnam. It defines related parties as entities with at least 25% ownership and extends this definition under Decree 20/2025/NĐ-CP, which was issued on February 10, 2025, and applies from the fiscal year 2024, to include affiliates of credit institutions.

Transfer pricing methodologies align with OECD guidelines, establishing acceptable pricing methods and tightening the acceptable arm's-length range from 25-75% to 35-75%. Taxpayers must identify comparables locally before expanding regionally.

Annual compliance requires declarations of related-party transactions and the methodologies used, with some exemptions for domestic-only transactions. Companies engaged in related-party transactions must maintain detailed transfer pricing documentation, organized into a master file, local file, and country-by-country report, with specific submission timelines.

Taxpayers may be exempt from documentation if their revenue is below certain thresholds or if they have an advance pricing agreement. There has been an increase in audits focused on transfer pricing, including scrutiny of comparables and intra-group service charges.

Additionally, Decree 132 caps the tax-deductibility of interest expenses at 30% of EBITDA, allowing non-deductible interest to be carried forward for five years.

Taxpayers can enter into APAs with tax authorities, although no agreements have yet been finalized with foreign jurisdictions.

Thin capitalisation

There are no thin capitalisation requirements in the tax legislation. However, the level of permitted debt funding will be limited by virtue of licensing requirements. The maximum amount of debt funding is the difference between the licensed investment capital and charter capital.

Decree 132, however, provides that deductible interest on loans shall be subject to the cap of 30% of EBITDA (as above).