The Vietnamese Government recently issued 2 decrees on TP: Decree 132/2020/ND-CP (Decree 132) dated 5 November 2020 which replaces Decree 20 and is valid for the fiscal year 2020 and Decree No. 126/2020/ND-CP (Decree 126) dated 19 October 2020.
The fundamental TP regulations on the principles and methods for declaring and determining taxable prices in related-party transactions, esp. on deductible expenses and the cap on loan interest cost deduction remain unchanged. Decree 132 implements the following notable changes:
It is noted that Vietnam is preparing for the era of AEOI, even if it has not yet been implemented.
Decree 126 details the Law on Tax Administration. It recognises the commercial database provided by data business organisations and has a more specific definition on the permitted sources to be used by both taxpayers and TA.
As Decree 132 takes effect from 20 December 2020 but applies for the fiscal year 2020, taxpayers must re-evaluate their TP strategy for 2020.
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