Transfer Pricing in Vietnam: Decree 255/2026 and What It Means for Your Related-Party Transactions
The short answer
As of 1 July 2026, Vietnam’s transfer pricing regime is governed by Decree No. 255/2026/ND-CP, which repealed and replaced the previous framework under Decree 132/2020/ND-CP and Decree 20/2025/ND-CP. The new decree applies from the 2026 corporate income tax year and largely retains Vietnam’s existing arm’s-length framework while updating related-party definitions, documentation exemptions, data sources for benchmarking, and Country-by-Country Reporting obligations, in alignment with OECD BEPS standards and Vietnam’s 2025 Law on Tax Administration.
What stayed the same
The arm’s length principle remains the foundation: related-party transactions must be priced as if between independent parties, using OECD-aligned methods selected based on transaction nature and available comparable data.
The 25% ownership/control threshold for defining related parties continues to apply, alongside board-appointment rights, guarantee thresholds, and common-individual-control tests.
The three-tier documentation approach — master file, local file, and Country-by-Country Report for qualifying groups — continues under the new decree.
The 30% EBITDA interest deductibility limitation for related-party financing is unchanged, though transitional carry-forward rules from Decree 20/2025 continue to apply for enterprises already covered by them.
What changed under Decree 255
Expanded data sources permitted for transfer pricing benchmarking analyses.
Revised documentation exemption thresholds, which may reduce compliance burden for some smaller-scale related-party transactions — worth reviewing for FY2026.
Additional circumstances under which tax authorities may make transfer pricing adjustments.
Clarified Country-by-Country Reporting obligations and notification requirements.
Alignment with the 2025 Law on Tax Administration, which governs how transfer pricing audits are conducted going forward.
Why this matters now, even though filings aren’t due until 2027
Because Decree 255 applies from the FY2026 CIT period, the first filings under the new rules for calendar-year taxpayers won’t fall due until roughly Q1 2027. That gap is a genuine planning window, not a reason to wait: transactions happening right now — pricing set with a related parent, management fees charged to a Vietnamese subsidiary, intercompany financing terms — will be judged under the new rules when they are eventually filed and audited. Companies that use 2026 to re-test their related-party positions, refresh benchmarking, and tighten documentation will file from a defensible position. Companies that wait until the filing deadline will be reconstructing a defense for transactions they can no longer restructure.
Where FDI companies get caught out
Treating transfer pricing as an annual filing exercise rather than something to price correctly at the time of the transaction.
Reusing old benchmarking studies without checking whether the comparable set, arm’s-length range, or exemption thresholds have moved under the new decree.
Underestimating scrutiny on services, royalties, and financing. The General Department of Taxation has significantly increased audits of foreign-invested enterprises on exactly these categories in recent years.
Missing the interaction with new DTA guidance. Circular 95/2026/TT-BTC’s substance-based approach to treaty entitlement and Decree 255’s transfer pricing rules increasingly need to be assessed together, not separately.
How W&A Consulting helps
We prepare transfer pricing documentation, benchmarking analyses, and related-party disclosure forms for FDI enterprises in Vietnam, and advise on restructuring intercompany arrangements ahead of the FY2026 transition. Our Managing Partner’s background as a former KPMG Tax and Legal Director gives clients Big Four-caliber transfer pricing rigor at a boutique firm.
Need your related-party transactions reviewed against Decree 255 before FY2026 closes? Contact W&A Consulting.
FAQ
What replaced Decree 132/2020 in Vietnam?
Decree No. 255/2026/ND-CP, effective 1 July 2026, applying from the FY2026 corporate income tax year.
When do the first filings under the new decree fall due?
For calendar-year taxpayers, roughly Q1 2027, as part of the FY2026 CIT finalization.
Does the arm’s length principle still apply?
Yes — Decree 255 retains the core OECD-aligned arm’s-length framework from Decree 132, with updates to documentation, data sources, and reporting.
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