Three obligation tiers by threshold: declaration is always due with related-party transactions, documentation follows thresholds
Transfer pricing thresholds are not a single number but the boundary between three obligation tiers. Tier one: whenever a related-party transaction arises, the enterprise must declare related-party transaction information in Appendix I issued with the related-party decree framework, filed with the corporate income tax finalization return — this duty has no size exemption. Tier two: preparing the transfer pricing documentation file (the local file, and the master file and country-by-country report depending on the enterprise’s position in the group) — this duty is exempted or reduced by the revenue and transaction-value thresholds in Article 16 of Decree 132/2020/ND-CP for the 2025 tax period. Tier three: for the 2026 tax period, Decree 255/2026/ND-CP carries this threshold framework forward; enterprises check the corresponding exemption provisions of Decree 255 when documenting the 2026 period instead of citing Decree 132, which no longer governs that period. This article goes deep on the threshold system only; all documentation exemption cases are systematized in EXP-2086.
The most common misunderstanding is reading ‘below threshold’ as ‘nothing to do’: below the documentation threshold, the enterprise must still complete Appendix I in full and must still be able to evidence arm’s length pricing when the tax authority asks.
The concrete 2025 threshold marks and how to read them for 2026
Under Clause 2, Article 16 of Decree 132/2020/ND-CP for the 2025 period, the taxpayer still declares Appendix I but is exempt from preparing the transfer pricing documentation file in three threshold-linked cases: (a) total revenue of the period under VND 50 billion and total value of all related-party transactions in the period under VND 30 billion; (b) an advance pricing agreement (APA) has been signed and annual reports duly filed for the transactions within the APA’s scope; (c) a simple-function enterprise with revenue under VND 200 billion meeting the net profit margin before interest and corporate income tax on net revenue for its sector: distribution at 5% or more, manufacturing at 10% or more, processing at 15% or more. In addition, Clause 1 of Article 16 exempts even Sections III and IV of Appendix I and the documentation file where related-party transactions arise only with related parties that are Vietnamese CIT taxpayers at the same tax rate with neither side enjoying CIT incentives — but the exemption basis must still be declared in Sections I and II of the Appendix.
For the 2026 period, Decree 255/2026/ND-CP basically carries these threshold marks forward; FDI enterprises should re-confirm each mark in the text of Decree 255 at the time of the 2026 finalization, especially the thresholds tied to the ultimate parent’s country-by-country reporting.
Frequently asked questions
At what revenue level must transfer pricing documentation be prepared?
There is no revenue threshold for starting to declare: any related-party transaction triggers Appendix I. Thresholds only govern documentation: for 2025, revenue under VND 50 billion together with total related-party transactions under VND 30 billion exempts the documentation file under Point a, Clause 2, Article 16 of Decree 132/2020/ND-CP.
Above what related-party transaction value is documentation mandatory?
Under the 2025 frame, total related-party transactions in the period under VND 30 billion (together with revenue under VND 50 billion) fall within the documentation exemption; exceeding either mark obliges the enterprise to prepare the full file. For 2026, check the corresponding thresholds in Decree 255/2026/ND-CP.
Below the threshold, is any declaration still required?
Appendix I must still be declared with the CIT finalization return, including the basis for the documentation exemption; ‘exempt from documentation’ does not mean exempt from declaration or from evidencing arm’s length prices when the tax authority requires it.