Annual Transfer Pricing Compliance Checklist (Master File, Local File, CbCR)

If your company transacts with related parties — parent, subsidiaries, sister companies, even a controlling individual — annual transfer pricing documentation is not optional. It is a mandatory obligation under Decree 255/2026/ND-CP, effective 1 July 2026 and applicable from CIT fiscal year 2026. This 15-item checklist walks you through each step: scoping, annual disclosure, preparing the local file and master file, and Country-by-Country Reporting (CbCR) — so that the year's file stands up to a tax audit.

Who should use this checklist and how
Detailed checklist (15 items)
Common mistakes in self-prepared transfer pricing files
After completing the checklist
FAQs
Language versions
References

1. Who should use this checklist and how

This checklist is for CFOs, chief accountants and legal advisers of FDI enterprises and any Vietnam-based company with related-party relationships — to be used every year, starting right after the books are closed and finishing when the year's obligations are fully discharged. Mark items as: ☐ not done, ☑ done, ⚠ needs lawyer review before sign-off. For the full legal framework behind this practical checklist, see our in-depth guide on transfer pricing filing obligations (T-160).

2. Detailed checklist

A. Scoping and transaction mapping

Item 1: Map and update the related-party chart ☐

Action: Draw a complete ownership and control chart: direct and indirect shareholdings, voting rights, management and control relationships (who manages and controls the enterprise), and family relationships where relevant. Update it whenever capital, mergers or legal representatives change.
Why it matters: This is the foundation of every transfer pricing obligation. Article 5 of Decree 255/2026/ND-CP lists in detail the cases constituting a related-party relationship — including borrowing/lending transactions from 10% of the owner's contributed capital with a managing or controlling individual or their relatives (a new addition). Misidentifying a relationship means missing transactions from the start, and the tax authorities may determine the relationship themselves.
How to do it: Review the enterprise registration certificate, member/shareholder registers, group charters, intercompany loan/borrowing agreements and appointment decisions. Test each relationship against Article 5.
Watch out: Do not look only at the direct parent. Transactions with sister companies, and with a managing individual (e.g. a director lending money to the company), can equally be related-party transactions.

Item 2: Build a comprehensive list of the year's related-party transactions ☐

Action: List every transaction during the year with related parties: purchases and sales of goods, services (including management fees from the parent), borrowings/lendings and interest expenses, leases/borrowings of assets, transfers of tangible and intangible assets (copyrights, trademarks, software), cost-sharing arrangements, guarantees, and shared-resource agreements.
Why it matters: Article 4 of Decree 255/2026/ND-CP defines related-party transactions broadly — covering not only sales but also borrowing, lending, asset transfers, intangible exploitation and cost-sharing. Missing one category (commonly: monthly parent management fees, software royalties, a director's temporary advance to the company) makes the entire pricing analysis incomplete in the eyes of the tax authorities.
How to do it: Extract detailed ledgers of related-party accounts from the accounting system, reconcile against contracts, invoices, bank statements and year-end intercompany balance confirmations. For each transaction record: the related party, nature, value and payment terms.
Watch out: "Interest-free" or "uninvoiced" transactions are still related-party transactions if they meet the definition. The tax authorities look at economic substance, not presentation.

Item 3: Check whether a documentation exemption applies ☐

Action: Test the company against the three documentation exemptions in Article 20(2) of Decree 255/2026/ND-CP: (a) annual revenue below VND 50 billion and total related-party transaction value below VND 30 billion; (b) all related parties are Vietnam taxpayers subject to the same CIT rate with none enjoying CIT incentives; (c) no revenue or expenses from exploiting intangibles, revenue below VND 500 billion, and minimum net profit margins by function (distribution ≥ 5%, manufacturing ≥ 10%, tolling ≥ 15% — net profit before interest and CIT over net revenue).
Why it matters: An exemption saves substantial documentation costs. Notably, the revenue threshold in limb (c) was raised from VND 200 billion to VND 500 billion, and the "simple functions" criterion was removed — many small and mid-sized FDI companies that previously failed to qualify may now qualify.
How to do it: Take figures from the audited financial statements (net revenue, net profit) and compute margins exactly per the decree's formula. If functions span multiple sectors without separate accounting, apply the highest sector margin to total revenue.
Watch out: ⚠ Exemption from documentation does NOT mean exemption from disclosure — Appendix I must still be filed with the CIT return. This is the single most common misunderstanding.

B. Annual disclosure

Item 4: File Appendix I with the CIT return on time ☐

Action: Disclose information on related-party relationships and transactions per Appendix I of Decree 255/2026/ND-CP, filed together with the annual CIT return — no later than the last day of the third month following the fiscal year-end.
Why it matters: This disclosure is mandatory for every company with related-party transactions (including exempt companies). Appendix I data feeds the tax authorities' risk-management system for selecting audit targets (Article 21). Late, missing or inaccurate disclosure is the first red flag.
How to do it: Compile from the transaction list in Item 2; figures must tie to the financial statements and accounting books. File electronically with the CIT return.
Watch out: If a transfer pricing adjustment increasing CIT liability is identified after filing, file a supplementary disclosure promptly — do not wait for the tax authorities to find it.

Item 5: Prepare one consistent underlying data set ☐

Action: Collect and lock a single data set for the year: financial statements (audited where mandatory), detailed related-party ledgers, all contracts/invoices/supporting documents for related-party transactions, the group's transfer pricing policy, board minutes on pricing, and the benchmarking data to be used.
Why it matters: Every figure in the local file, master file and Appendix I must come from the same data set. Auditors cross-check these three sources; any unexplained variance undermines the file's credibility.
How to do it: Assign one owner (chief accountant or adviser) to "lock the numbers" after the financial statements are approved; record any subsequent adjustment in writing and update the file consistently.
Watch out: Framework agreements with the parent in a foreign language should have Vietnamese translations ready — tax inspections work from Vietnamese documents.

Item 6: Run the comparability analysis and validate the pricing method ☐

Action: Perform a functional, asset and risk (FAR) analysis for each transaction type, select the appropriate transfer pricing method (comparable uncontrolled price, resale price, cost plus, profit split or transactional net margin), and support it with comparable uncontrolled data.
Why it matters: This is the heart of the file. Article 18(2) requires taxpayers to demonstrate the analysis, comparison and method selection. A wrong method or non-comparable data is the most common reason tax authorities reject a file outright and determine prices themselves.
How to do it: Apply the database priority order in Article 17 of Decree 255/2026/ND-CP: publicly available databases first, then commercial databases, then the tax authorities' database. Document comparable-selection criteria, comparability adjustments and the arm's-length range in full.
Watch out: ⚠ If using a commercial database, keep evidence of the extraction and its date — figures "found somewhere online" have no evidentiary value.

C. Local file

Item 7: Finalize the local file per Appendix II ☐

Action: Prepare the local file following the content list in Appendix II of Decree 255/2026/ND-CP: information on the Vietnamese entity (organizational structure, business activities), detailed description of each related-party transaction, FAR analysis, the selected pricing method and rationale, benchmarking data, financial statements and supporting documents.
Why it matters: The local file is the first document the tax authorities request when auditing a specific Vietnamese entity. A complete file with a tight logic chain — what the transaction is, what functions are performed, what the price is, whom it is compared with — is the main defence against a deemed tax assessment.
How to do it: Start right after the numbers are locked and finish before the annual CIT return filing deadline — Article 18 of Decree 255/2026/ND-CP requires the file to be prepared before that point, kept in full and produced when the tax authorities request. Assign owners per section (accounting for figures, legal for contracts, advisers for benchmarking). The file must be signed, sealed and kept at the company.
Watch out: Do not copy last year's file and merely change the figures. Tax officers read multi-year files; descriptions not updated for the year's actual changes (business model shifts, new or removed transactions) are spotted immediately.

D. Master file

Item 8: Coordinate the master file per Appendix III ☐

Action: Work with the parent/group to obtain the master file per Appendix III of Decree 255/2026/ND-CP: global organizational structure, description of the group's business, group intangibles, intragroup financing, and consolidated financial statements.
Why it matters: The master file gives the Vietnamese tax authorities the global picture: where group profits are allocated, where intangibles sit, how intragroup financing flows. Without it, the Vietnamese entity's file is incomplete under the three-tier documentation Vietnam committed to under BEPS.
How to do it: Contact the parent's tax team early in the fiscal year — many groups prepare the master file on the parent's timetable (often later than the Vietnamese subsidiary's year-end). Agree on language, reporting period and the responsible contact.
Watch out: ⚠ Time zones and different work calendars typically delay master file delivery by 2–3 months. Put this on the agenda from Q1 of the fiscal year, not near the CIT filing deadline.

E. Country-by-Country Report (CbCR)

Item 9: Assess the group's CbCR obligation ☐

Action: Determine whether the group must prepare/file a CbCR: an ultimate parent entity (UPE) in Vietnam with global consolidated revenue of EUR 750 million or more in the fiscal year immediately preceding the reporting year; or a Vietnamese member of a multinational group whose foreign UPE meets the equivalent threshold. Convert using the central rate (or average cross rate) of December of the year preceding the reporting year as published by the State Bank of Vietnam (Article 19(6)).
Why it matters: The CbCR threshold changed fundamentally: from VND 18,000 billion (reporting-year revenue) to EUR 750 million (preceding-year revenue). Companies that were just under the old threshold may now be over it — or vice versa.
How to do it: Take consolidated revenue from the group's consolidated financial statements for the preceding year; convert at the prescribed rate; keep the calculation as evidence. If the group has several Vietnamese entities, identify which files and which are exempt via a surrogate filer.
Watch out: Even where re-filing is exempt (e.g. the parent filed in its residence country and Vietnam receives it through automatic exchange), the notification obligation still applies — "exempt from filing" is not "nothing to do".

Item 10: File the CbCR notification and report in the right form, on time ☐

Action: Submit the CbCR notification on the prescribed form, and file the CbCR itself (where required) as an encrypted XML file through the tax information system — within 12 months from the end of the UPE's fiscal year for the reporting year.
Why it matters: CbCR lets the tax authorities assess the group's global profit allocation risk. Wrong format, wrong channel or late filing counts as non-compliance, and may cause Vietnam to require local filing even where the parent already filed abroad.
How to do it: Coordinate with the parent to obtain CbCR data (revenue, profit, tax paid, capital, headcount per jurisdiction); validate the XML before submission; keep the electronic receipt.
Watch out: CbCR may not be used by the tax authorities to adjust or determine related-party transaction prices (Article 21(1)(c)) — but it is used for risk management and audit selection. CbCR figures must therefore be consistent with the local file and financial statements.

F. Operations, retention and audit readiness

Item 11: Reconcile the file, financial statements and tax return ☐

Action: Run a final reconciliation: total related-party transaction values by type in the local file = Appendix I figures = financial statement figures; profit and revenue used in benchmarking tie to the audited financial statements.
Why it matters: This is the first check tax officers run when opening a file. Three inconsistent sources without explanation is the fastest route to a credibility finding against the file.
How to do it: Prepare a signed reconciliation schedule from the chief accountant, kept with the file. Explain every variance in writing (e.g. post-file audit adjustments).
Watch out: Pay special attention to voluntary year-end transfer pricing adjustments booked after closing — reflect them consistently in all three places.

Item 12: Control financing transactions and the interest cap ☐

Action: Review all related-party interest expenses for the year and apply the cap: total deductible interest expense may not exceed 30% of net operating profit plus net interest expense (after deducting deposit/loan interest income) plus depreciation for the period. Excess interest is carried forward under the transition rules.
Why it matters: The interest cap is independent of whether the interest rate itself is arm's length — even a market-rate parent loan produces non-deductible interest above 30% of EBITDA. Missing this step creates a non-deductible expense at filing.
How to do it: Compute EBITDA per the decree's formula from the financial statements; separate related-party from third-party interest; track interest carried forward from prior years (interest being carried forward under Article 3 of Decree 20/2025/ND-CP continues for the remaining period — Article 23(3) of Decree 255/2026/ND-CP).
Watch out: ⚠ "Temporary interest-free advances" from a managing individual can also create a related-party relationship (Article 5) — check non-interest-bearing items too.

Item 13: Prepare a response protocol for tax authority requests ☐

Action: Establish an internal protocol in advance: who receives the tax authority's written request, internal deadlines for assembling the file (note: produce the file within the time limit prescribed by current regulations when the tax authorities issue a written request), who signs explanatory letters, and how to handle the pre-audit consultation process.
Why it matters: Once the request letter arrives, the clock runs. Companies without a protocol scramble: files scattered across people, slow parent responses, and the deadline passes with an incomplete production — after which the tax authorities may determine prices from their own database.
How to do it: Name one owner for the year's transfer pricing file; keep the complete file in one place (hard and electronic copies); rehearse internally once a year.
Watch out: Produced files must be complete and accurate — the taxpayer is legally responsible for their content. Do not "produce something for the deadline's sake".

Item 14: Review material year-end changes ☐

Action: At each year-end, review changes that could fundamentally alter the transfer pricing analysis: group restructurings, intangible transfers, shifts between distribution/manufacturing/tolling models, changes in internal pricing policy, sharp margin movements, or a new advance pricing agreement (APA).
Why it matters: A transfer pricing file is a snapshot of a specific year. Unreflected material changes (e.g. the company moved from tolling to full manufacturing but the file still describes the old function) invalidate the entire analysis from its first assumption.
How to do it: Hold a year-end review meeting between finance, legal and management; minute the changes and decide whether the pricing method needs updating.
Watch out: If the year's margins fell sharply versus prior years and the arm's-length range, prepare the economic explanation in advance (industry downturn, input cost spikes, force majeure) — do not invent reasons when asked.

Item 15: Retain, secure and control access to the file ☐

Action: Keep the complete annual file (local file, master file, CbCR, Appendix I, reconciliations, benchmarking data, contracts and source documents) securely, in hard and backed-up electronic copies; restrict access because the file contains sensitive pricing, profit and group strategy information.
Why it matters: Transfer pricing files may be requested years after the tax year (within the audit statute of limitations). Losing an old year's file means being unable to defend that year's figures on re-audit. At the same time, this is the group's confidential material — a leak can cause commercial harm.
How to do it: Apply the company's accounting-tax document retention policy (consider the tax audit limitation period when setting retention); encrypt electronic copies; log access.
Watch out: When advisers prepare the file, the engagement letter must require handover of all source files and confidentiality — do not leave the only complete copy "with the adviser".

3. Common mistakes in self-prepared transfer pricing files

Mistake 1 — Confusing documentation exemption with disclosure exemption. Being exempt from preparing the transfer pricing documentation file under Article 20 does not remove Appendix I. The tax authorities still receive your CIT return, and a missing Appendix I is a standalone disclosure breach.

Mistake 2 — Missing transactions that "don't look like transactions". Parent management fees, software royalties, a director's temporary advance, loan guarantees — all can be related-party transactions under Articles 4 and 5 of Decree 255/2026/ND-CP. An incomplete transaction list is the fastest-detected error when reconciled against the financial statements.

Mistake 3 — Three sources, three different numbers. Local file, Appendix I and financial statements that do not tie, with no reconciliation schedule. Always complete the Item 11 reconciliation before closing the file.

Mistake 4 — Benchmarking that ignores the database priority. Article 17 introduces, for the first time, a priority order: publicly available databases → commercial databases → tax authority database. Using a commercial database where suitable public data exists, or failing to keep extraction evidence, weakens the file's defensibility.

Mistake 5 — Forgetting CbCR because "the parent already filed abroad". Re-filing relief is not automatic — it depends on whether Vietnam receives the report through automatic exchange and confidentiality conditions are met; and the notification obligation remains. Review Items 9–10 every year.

4. After completing the checklist

When all 15 items are marked ☑, the year's file is ready: Appendix I filed with the CIT return, local and master files prepared and kept at the company, CbCR obligations (if any) discharged. The next step is an independent review of the complete file — ideally by a lawyer or tax specialist who did not prepare it — before "locking" the year.

You MUST have a lawyer review the file when: the group has CbCR obligations; there were material changes during the year (restructuring, intangible transfers); margins fell outside the arm's-length range; or you have received a production request or pre-audit consultation notice from the tax authorities. FLAT LAW FIRM assists FDI enterprises in reviewing, preparing and defending transfer pricing files before the tax authorities — contact our hotline 0988424851 for advice.

5. FAQs

Does an exemption from preparing transfer pricing documentation also exempt us from disclosing related-party transactions? No. An exemption from preparing the transfer pricing documentation file (Article 20(2) of Decree 255/2026/ND-CP) does not exempt the disclosure obligation: the company must still file information on related-party relationships and transactions (Appendix I) with its annual corporate income tax return.

Must the local file and master file be filed with the CIT return, or only prepared and kept? Only Appendix I must be filed with the annual CIT return. The local file and master file must be prepared, kept at the company, and produced in full to the tax authorities upon request.

If our parent company already filed the CbCR abroad, must the Vietnamese entity file it again? Not automatically. If the ultimate parent entity's CbCR has been automatically exchanged to Vietnam and confidentiality conditions are met, the Vietnamese entity may be exempt from re-filing — but the notification obligation still applies.

We had no related-party transactions this year. Do we need to do anything? No documentation file is required. However, keep evidence showing that no related-party relationship or transaction existed during the year, in case the tax authorities ask.

Can we outsource the preparation of transfer pricing documentation? Yes. A company may engage a tax agent or adviser to prepare the documentation, but the taxpayer remains legally responsible for its completeness and accuracy.

6. Language versions

7. References

Decree 255/2026/ND-CP on tax administration for enterprises with related-party transactions — effective 1 July 2026, applicable from CIT fiscal year 2026.
Law on Tax Administration 2025 (108/2025/QH15).
Official Letter 4697/CT-CS guiding implementation of Decree 255/2026/ND-CP (cited in public analyses of the decree).
Set of 50 Q&A on Decree 255/2026/ND-CP published by a local tax authority.