After more than 5 years of implementing Decree 132/2020/ND-CP on tax administration for enterprises with related-party transactions (Decree 132), the Ministry of Finance is submitting to the Government a new draft decree to replace the entire current decree[1]. On the surface, this can be seen as a technical move to synchronize with the Law on Tax Administration 2025 and the Law on Corporate Income Tax 2025. However, when delving into the content of the draft, it can be seen that the changes this time reflect a larger trend: Vietnam is gradually shifting from the traditional related-party transaction control model to a data-based tax risk management model, and at the same time taking a deeper approach to standards to prevent base erosion and profit shifting ( BEPS) of the OECD.
It is worth noting that the new draft not only emphasizes the goal of combating transfer pricing but also focuses on tax risk management.
From anti-transfer pricing to tax risk management
When Decree 132 was promulgated in 2020, the central goal was to combat transfer pricing and protect state budget revenues. In that context, the tax authorities focus on requiring businesses to prove that related-party transactions are carried out according to the principle of independent transactions.
After more than 5 years of implementation, the Ministry of Finance assesses that Decree 132 has created a relatively complete legal framework for the examination and inspection of related-party transactions. In the period of 2020-2025, the tax authority has inspected and examined nearly 5,100 enterprises with related-party transactions; arrears, refunds and sanctions of over VND 12,000 billion; at the same time, it was adjusted to increase taxable income by more than VND 51,000 billion. These numbers show that affiliate transaction management tools have played a significant role in combating tax loss. However, the Ministry of Finance also acknowledged that many current regulations have revealed certain limitations when the business environment, corporate governance model and international tax administration trends are changing rapidly.
It is worth noting that the new draft not only emphasizes the goal of combating transfer pricing but also focuses on tax risk management. This is in line with the orientation of modern tax administration reform, in which tax authorities not only detect violations after they occur but also actively use data to identify risks early.
Establishing the principle of data use priority for the first time
One of the most notable changes of the draft is the reconstruction of regulations on databases for the management of related-party transactions.
The current Decree 132 mainly stipulates data sources that taxpayers or tax authorities can use when determining the price of related-party transactions. However, there is no clear mechanism for prioritization between different data sources.
The new draft establishes the principle of prioritizing the use of data in a specific order for the first time. Accordingly, public databases of enterprises, data from the stock market, data from state agencies and national databases will be prioritized before switching to commercial databases. On the contrary, tax authorities will prioritize data exploitation in the tax administration system and public data sources before using commercial data.
This change reflects a new management philosophy. Instead of relying mainly on international trade databases, which are costly and often controversial in terms of similarity, the tax authorities want to exploit more strongly the digital data that is being formed from the national digital transformation.
From a business perspective, this also means that public data on financial statements, annual reports, securities disclosures or national databases will be used more and more in the tax risk assessment process.
Expanding the scope of comparative analysis
A technical change that has major practical implications is the expansion of the scope of comparative analysis.
According to current regulations, the selection of independent comparables is usually carried out within the scope of similar industries or markets. However, in many cases, the number of suitable comparable enterprises in Vietnam is quite limited, especially for high-tech industries, digital economy or new business models.
The new draft allows to expand the scope of the search for comparables by geographic area or a wider scope of activity if it is not possible to find a suitable object within the usual range.
This change will theoretically help improve the quality of comparative analysis, reduce the mechanical application of inappropriate data. However, at the same time, it can also give rise to more debates between businesses and tax authorities about the selection of comparable objects.
Because, the more the scope of the search, the greater the difference in economic conditions, legal environment, market size and industry characteristics. This requires businesses to invest more in building a dossier to determine the price of related-party transactions.
Narrowing the subjects exempted from making dossiers
If I had to point out the regulation that is likely to affect the most businesses, it may be the adjustment of the conditions for exemption from making a dossier of determination of the price of related-party transactions.
According to the current Decree 132, some enterprises are exempt from making dossiers if they have a revenue of less than VND 200 billion and reach the minimum profit margin by industry.
However, the new draft proposes to raise the revenue threshold from VND 200 billion to VND 500 billion but at the same time adds a new condition: enterprises must have simple functions and not generate revenue from main activities exceeding a certain percentage for areas with high transfer pricing risks.
The Ministry of Finance explained that raising the revenue threshold helps reduce compliance costs for businesses, while the additional conditions are to avoid cases where enterprises are of significant size but are still exempt from filing records just because they meet the revenue criteria. This suggests that the regulator is shifting from a scale-based approach to a risk-based approach.
Supplementing the association relationship through borrowing and lending transactions
Another notable new point is the addition of the association relationship arising from the borrowing or lending of assets.
Previously, regulation mainly focused on loans. However, in fact, many businesses use the form of lending assets, machinery, equipment or other assets instead of loan transactions to achieve the same economic efficiency.
The new draft approaches on the principle that substance is more important than form. If the transaction borrows or lends assets of an economic nature equivalent to financing or financial support, the transaction may be considered in determining the nexus.
This is a step in line with the international trend, where tax authorities are increasingly focusing on the actual economic nature of transactions rather than just looking at the legal name.
This suggests that the regulator is shifting from a scale-based approach to a risk-based approach.
Tightening but at the same time standardizing inter-country profit reports
For multinational corporations, the most concerned content is the changes related to the Country-by-Country Report (CbCR).
The new draft has many amendments in the direction of being more in line with the OECD's BEPS Action 13 Minimum Standard.
Firstly, instead of stipulating the current threshold of revenue in Vietnamese dong, the draft switched to using the threshold of 750 million Euros according to OECD standards.
Secondly, the CbCR report will be submitted in a standardized XML format.
Thirdly, the draft supplements cases in which taxpayers in Vietnam are not required to submit CbCR reports when there is an automatic exchange mechanism between Vietnamese tax authorities and foreign tax authorities.
Fourthly, the draft supplements the obligation to notify the subjects of CbCR reports to help tax authorities accurately identify the subjects responsible for performing the reporting obligation.
Overall, these changes are not aimed at increasing the compliance burden but are mainly aimed at standardizing processes and increasing the efficiency of international information exchange.
Tax authorities shift their role from "inspection" to "compliance support"
Perhaps the biggest thinking change in the draft lies in the regulations on the responsibilities of tax authorities.
For the first time, the draft includes regulations requiring tax authorities to develop a program to support taxpayers, disclose risk information, guide businesses to improve compliance and support in determining the price of related-party transactions.
This is a sign that the tax authorities are shifting from the "inspection – sanctioning" model to the "risk management – compliance support" model.
This trend is similar to many modern tax authorities around the world, where helping businesses comply properly from the start is considered much more effective than handling violations after they have arisen.
What do businesses need to prepare?
Although the draft is still in the process of being finalized, enterprises with related-party transactions should not wait until the decree officially takes effect to start preparation.
First of all, enterprises need to review the entire ownership structure and internal transactions to assess whether new cases of association relationships arise according to the draft regulations.
Next, businesses need to improve the quality of accounting, financial and internal management data. In the context of tax authorities increasingly using data analysis tools and digital databases, data consistency will become an important factor in tax risk assessment.
For multinational corporations, the review of CbCR obligations, international information exchange mechanisms and dossier preparation processes according to OECD standards also need to be carried out soon.
Finally, businesses need to change their mindset about managing related-party transactions. This is no longer just a matter of preparing documents for tax inspection but has become part of the risk management and compliance strategy of businesses.
Conclusion
The new draft Decree on tax administration for related-party transactions does not create a breakthrough reform like the introduction of the global minimum tax, but it does show a significant change in Vietnam's approach to tax administration. The new regulations on databases, risk analysis, expansion of the scope of comparison, adjustment of the exemption mechanism for dossier preparation and standardization of CbCR reporting all reflect the trend of modern tax administration based on international data and practices.
In the context of increasingly complex cross-border transactions, these changes can help Vietnam strengthen its ability to resist tax loss, while creating a foundation for deeper integration into the global tax administration system. However, it also means that businesses must invest more in compliance capacity, data governance, and tax risk management if they want to adapt to the new phase of associated transaction management.
