A group restructuring changes almost every assumption behind an existing transfer pricing file: the Vietnamese company may shift from a full manufacturer to a limited-risk processor, inventory and market risk may move to the parent, and new flows of service fees, royalties and intra-group interest may appear or disappear. If the company keeps using documentation built for the old structure, the tax authority has solid ground to argue that the prices no longer reflect the economic reality after the restructuring.
Why restructuring undermines the old transfer pricing file
The core of Vietnam’s related-party regime is the arm’s length principle: prices, margins and terms between related parties must match those between independent parties in comparable circumstances. A restructuring breaks exactly that comparability, because the functional analysis of functions, assets and risks (FAR) underpinning every pricing method has changed. A company that once bought its own materials, held inventory and bore selling risk supports a very different expected margin from one that merely processes orders placed by its parent.
The legal framework itself also changed in the same period. Decree 132/2020/ND-CP expired on 1 July 2026 and was replaced by Decree 255/2026/ND-CP, which applies from the 2026 corporate income tax period, while the 2019 Law on Tax Administration 38/2019/QH14 was replaced by Law 108/2025/QH15. Transactions of earlier periods are still tested under the former framework during the transition, but files prepared for 2026 onward must be built on the new instruments even if the group structure stays unchanged.
A practical review sequence after restructuring
Step one is to redraw the transaction map: list every related-party flow arising after the restructuring took effect, including goods, management services, royalties, interest, guarantees and group cost allocations. Step two is to rewrite the FAR analysis for each flow, describing who actually decides, who owns the intangibles and who bears the risk. Step three is to revisit the pricing method and the arm’s length range; in many cases the comparable set must be rebuilt because margins earned under the old model are no longer usable.
The step most often missed is pricing the restructuring event itself: transferring functions, moving intangibles, terminating a distribution contract or shuffling shares inside the group can each be a related-party transaction that needs its own arm’s length valuation. If a business line leaves Vietnam without a valuation of what was transferred, exposure sits not only in the recurring annual flows but also in the value of the assets that departed.
What happens in a tax audit
Auditors usually start by comparing the Vietnamese company’s profit before and after the restructuring. A sharp profit fall while revenue keeps growing prompts a demand to explain the economic substance of the change. If the company cannot show that risk genuinely left Vietnam, the tax authority may reassess taxable income under Law 108/2025/QH15, together with late-payment interest and penalties for under-declaration.
The second exposure is documentary: the local file, master file and country-by-country report obligations continue after a restructuring, and files must be produced within the statutory window once requested. A file copied from the prior year with only the financial figures swapped is routinely treated as failing to describe the transactions actually carried out in the tax period.
Frequently Asked Questions
What should be reviewed?
Start from a fresh map of related-party flows arising after the restructuring’s effective date: relist every stream of goods, services, royalties, interest and internal cost allocations, then rewrite the functions-assets-risks analysis for each stream. The decisive task is pinning down what genuinely changed inside Vietnam, because that finding determines whether the existing file can be patched or must be rebuilt for the tax period.
Which files are needed?
Three familiar layers are required: a local file describing the Vietnamese company’s related-party dealings, a master file describing the group’s structure and pricing policy, and a country-by-country report where the group meets the filing threshold. After a restructuring all three layers need updated function and risk descriptions, plus the re-signed intra-group contracts and a valuation of the restructuring event itself where functions or assets were transferred.
How should prices be set?
Post-restructuring prices must be reset with a method that fits the new business model, for example moving from a resale price approach to a net margin method when the Vietnamese entity becomes a low-risk processor. The arm’s length range also needs a fresh comparable set, because defending the new model with margins earned under the old model undermines the file from the first explanation round.
What are the risks?
The largest risk is a reassessment of taxable income where the authority concludes that profit fell without any real transfer of risk, followed by late-payment interest and under-declaration penalties. The second risk is repricing of the restructuring transaction itself, such as intangibles moved out of Vietnam being treated as transferred below arm’s length value. Both risks fall sharply when the group documents a valuation at the time of restructuring instead of waiting for an audit.
Bottom line for the group’s tax team
Reviewing related-party transactions after a restructuring is not a cosmetic refresh of the old file; it means rebuilding the whole pricing argument on the new functions and risks, and migrating documentation to the Decree 255/2026/ND-CP framework for periods from 2026. The work should be finished inside the same tax period as the restructuring, before the tax authority asks the questions first.