Companies with related-party transactions in Vietnam must not only file annual declarations but also prepare and retain transfer pricing documentation — a significant compliance cost. What makes up the cost of preparing transfer pricing documentation? The current framework is Decree 255/2026/ND-CP (effective 1 July 2026), which replaced Decree 132/2020 and Decree 20/2025 in their entirety.
1. The new legal framework: Decree 255/2026, Article 18
Under Article 18 of Decree 255/2026/ND-CP:
- Annual declaration: companies declare related-party relationships and related-party transactions under Appendix I, filed together with the annual corporate income tax (CIT) finalisation return;
- Three-tier documentation: prepare and retain transfer pricing documentation before the annual CIT finalisation filing deadline, including the Local File under Appendix II;
- CbCR: threshold of EUR 750 million;
- Interest deduction cap: deductible interest expense capped at 30% of EBITDA.
2. Who is exempt: the new VND 500 billion threshold
Point c, clause 2, Article 20 of Decree 255/2026 exempts companies that cumulatively meet the conditions, including revenue below VND 500 billion, no intangible assets, and minimum profitability of 5%/10%/15% depending on function.
Key note: the VND 500 billion threshold is the NEW threshold under Decree 255/2026 — not the old VND 200 billion threshold under the expired regime (Decree 132/2020 is no longer in force). Companies with revenue between VND 200 and 500 billion that previously had to prepare documentation may now be exempt — but must still satisfy all remaining conditions in point c, clause 2, Article 20.
Exemption from documentation does not mean exemption from declaration: the annual declaration duty under Article 18 continues to apply.
3. Cost components of TP documentation
Typically, the cost of preparing transfer pricing documentation has three groups:
(a) Consulting fees. In many cases the largest item: benchmarking analysis of comparable uncontrolled transactions, selection and application of the appropriate pricing method, and drafting the Local File under Appendix II. Consulting fees are agreed based on transaction scale, the number of related parties and the complexity of the engagement — there is no published standard price.
(b) Data collection costs. Internal data on related-party transactions, market data and benchmarking databases.
(c) Internal costs. Staff time (accounting, tax, legal), document management systems, and annual updates.
4. How much do TP consulting services cost?
There is no reliable public fee schedule. Consulting fees for transfer pricing documentation are negotiated contract by contract, depending on transaction scale, the number of related parties, the complexity of the benchmarking analysis and the scope (Local File only or full three-tier package). Companies should obtain quotes from several providers and compare the defined scope of work.
Frequently asked questions
What is the current exemption threshold for TP documentation?
Under point c, clause 2, Article 20 of Decree 255/2026: revenue below VND 500 billion (plus the intangible-asset and 5%/10%/15% minimum-profit conditions). The old VND 200 billion threshold is no longer in force.
If exempt from documentation, must a company still declare related-party transactions?
Yes. Exemption from documentation does not exempt the company from declaration. The annual declaration duty under Article 18 (Appendix I, filed with the CIT finalisation return) continues to apply.
By when must TP documentation be completed?
Before the annual CIT finalisation filing deadline (Article 18, Decree 255/2026).
What is the maximum deductible interest expense for related-party borrowing?
Capped at 30% of EBITDA under Decree 255/2026.
Sources
- Decree 255/2026/ND-CP (effective 1 July 2026, replacing Decree 132/2020 and Decree 20/2025 in full): Article 18 (annual declaration under Appendix I; three-tier documentation prepared and retained, Local File under Appendix II); point c, clause 2, Article 20 (documentation exemption: revenue below VND 500 billion + no intangibles + minimum profit 5%/10%/15% by function); CbCR threshold EUR 750 million; interest deduction cap 30% of EBITDA.
This article is for reference only and does not constitute legal advice. The content was drafted by AI and will be reviewed for quality by the AI Legal Council of FLAT Law Firm before approval for publication; it is not the legal opinion of a licensed human lawyer. Laws and regulations may change; please verify the current legal texts before applying them.
Does your business have related-party transactions and need TP documentation? Contact FLAT Law Firm for compliance advice.
