Vietnam: New transfer pricing regulations

Vietnam: New transfer pricing regulations were released on 5 November 2020 and apply for financial year 2020 and going-forward.

Transfer pricing benchmarking

There have been some interesting changes directly related to transfer pricing benchmarking:

  • Commercial databases are now explicitly referred to as a valid source of comparables for both taxpayers and tax authorities.
  • “Secret comparables” which may be available to the tax authorities should have limited use, except when assessing an adjustment where a taxpayer has not met the transfer pricing compliance requirements.
  • The arm’s length range is amended to span the 35th to the 75th percentile.

Transfer pricing documentation

Companies will now be exempt from having to comply with the three-tiered transfer pricing documentation requirement (i.e., country-by-country reporting (where relevant), master file and local file) where:

  • They have only domestic related party transactions; and
  • Their related parties have the same tax rate; and
  • None of the parties enjoy tax incentives.

Some changes have also been introduced with respect to country-by-country reporting – contact us if this is relevant to your organisation to discuss further.

By |2020-11-09T20:03:37+00:00November 9th, 2020|Benchmarking, Documentation, Europe|0 Comments