Pursuant to Article 19 of Decree No. 132/2020/NĐ-CP, the cases in which taxpayers are exempt from transfer pricing declaration and/or transfer pricing documentation are as follows:

Case 1: Exemption from both transfer pricing declaration and transfer pricing documentation

An enterprise is exempt from declaring related-party transactions and from preparing transfer pricing documentation if it satisfies all of the following conditions:

• It only has related-party transactions with related parties that are corporate income taxpayers in Vietnam;

• All related parties apply the same corporate income tax (CIT) rate; and

• None of the related parties enjoys any CIT incentives during the tax period.

Note:
In this case, the taxpayer is exempt from completing Sections III and IV of Appendix I – Information on Related-Party Relationships and Related-Party Transactions, but must still declare the basis for exemption in Sections I and II of Appendix I issued together with Decree No. 132/2020/NĐ-CP.

Case 2: Exemption from transfer pricing documentation but still required to declare related-party transactions

A taxpayer is exempt from preparing transfer pricing documentation but must fully declare related-party transactions in accordance with Appendix I of Decree No. 132/2020/NĐ-CP if it falls into one of the following cases:

• The taxpayer has related-party transactions, but:

  • Total revenue in the tax period is less than VND 50 billion; and

  • Total value of all related-party transactions in the tax period is less than VND 30 billion;

• The taxpayer has signed an Advance Pricing Agreement (APA) and submits the annual APA report in accordance with regulations on APAs.

  • For related-party transactions not covered by the APA, the taxpayer must declare transfer pricing information in accordance with Article 18 of Decree No. 132/2020/NĐ-CP;

• The taxpayer conducts business with simple functions, does not generate revenue or costs from the exploitation or use of intangible assets, has revenue of less than VND 200 billion, and applies a net profit margin (before interest expenses and CIT) meeting the following thresholds by industry:

  • Distribution: 5% or higher;

  • Manufacturing: 10% or higher;

  • Processing (toll manufacturing): 15% or higher.

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