Navigate Decree 132/2020/ND-CP with precision. Ensure your 30% EBITDA interest cap compliance and secure your Three-Tier documentation for Vietnamese Tax Authorities.
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Transfer pricing in Vietnam is one of the most strictly audited tax areas, governed by **Decree 132/2020/ND-CP**. The General Department of Taxation (GDT) focuses heavily on anti-tax avoidance, with a specific emphasis on companies reporting persistent losses while expanding operations.
Compliance is mandatory for all taxpayers with related-party transactions. Key risks include the rejection of benchmarking studies by tax officers and the stringent limitation of net interest expense deductions to 30% of EBITDA.
Total deductible net interest expense is capped at 30% of EBITDA. Excess interest can be carried forward for up to 5 consecutive years.
Submission of Forms 01, 02, 03, and 04 is required annually alongside the Corporate Income Tax (CIT) return.
Three-tier documentation must be prepared before the CIT return filing date and submitted within 30 days upon request.
The primary threshold for mandatory TP Documentation.
Taxpayers are exempt from preparing the Local File and Master File if:
• Annual revenue < VND 50 Billion AND
• Related party transactions < VND 30 Billion.
However, the Form 01 Disclosure is still required for all related party dealings.
Exemptions for low-risk business profiles.
Entities with revenue < VND 1,000 Billion and EBIT/Revenue margins of:
• Distribution: > 5%
• Manufacturing: > 10%
• Processing: > 15%
may be exempt from benchmarking requirements, provided they do not have intangible property transactions.
Threshold for groups over VND 18,000 Billion.
Vietnamese ultimate parent companies with global consolidated revenue ≥ VND 18,000 Billion must file.
For foreign-parented MNEs, Vietnamese subsidiaries must provide the CbCR if the tax authority cannot obtain it via automatic exchange of information (AEOI).
Preparation of mandatory Forms 01 through 04 for CIT filing.
Strategic advisory on interest deduction optimization under Decree 132.
Managing GDT inspections and defending benchmarking methodologies.
Utilizing local and regional databases to satisfy Vietnamese tax officer scrutiny.
The GDT's "substance over form" approach requires robust defense. Ensure your Vietnam TP documentation is audit-ready.
Contact Ho Chi Minh TeamFor further information on transfer pricing please contact:
Leader - TP Policy
Principal North America Practice