With the recent enhancement of the Vietnam transfer pricing (TP) regulations, full compliance with TP obligations is critical for taxpayers to mitigate potential related risks in the context of increasing tax audits and TP related adjustments by the Vietnam tax authorities.
As the fiscal year end is approaching, it is important for taxpayers having related party transactions to carefully review their pricing mechanism and proactively plan for the annual compliance obligations, including TP Documentation, TP Disclosure Appendices (TP Appendices) and Country by Country Reporting (CbCR).
It is time to consider the TP compliance requirements and timeline to proactively and efficiently manage your TP compliance obligations. Article 18 of Decree 132/2020/ND-CP on Tax Administration for Enterprises having Related Party Transactions (Decree 132) clearly states that TP Documentation must be compiled before the time of filing Corporate income tax (CIT) finalization returns each year, and must be timely provided to the tax authorities upon request; while TP Appendices are required to be prepared and submitted together with CIT finalization returns each year.
All of these rules and regulations are complex. TP issues can put your company at risk. Taking a proactive approach to address your TP risks and obligations is beneficial for your business as well as other stakeholders and potential investors.
If one or more of the following situations applies to your company, it is likely to be subject to TP requirements:
Per our practical observations, the areas focused by Vietnam tax authorities are as follows:
