1. Enterprises required to submit related party transaction reports

• Enterprises must submit reports on related party transactions if:
⚬ There are transactions with related parties.
⚬ Total revenue from production and business activities in the previous fiscal year is VND 50 billion or more.
• Enterprises in this category must comply with reporting obligations, including enterprises with transactions with related parties domestically and internationally.

2. Contents of related party transaction report
• Information about affiliates:
⚬ Name, address, tax code, ownership ratio of the related party, type and related relationships.

• Transaction details:
⚬ Types of related transactions (e.g. purchase and sale of goods, provision of services, lending, transfer of assets…), value and method of determining transaction value.

• Method of determining transaction value:
⚬ Methods used to determine the fair value of related party transactions include the market price comparison method, the cost-plus method, the profit allocation method, and the transfer value method..

3. Time and method of submitting reports
• Time for submission of reports: The transfer pricing report must be submitted at the time of submitting the corporate income tax finalization declaration (at the end of the enterprise’s fiscal year).
• Method of submission of reports: Enterprises must submit reports via the electronic tax declaration system managed by the tax authority.

4. Requirements for records and information transparency
• Enterprises must maintain and provide documents proving related party transactions for 5 years from the date of submission of the report.
• The report must be accurate and transparent, especially the method of determining the value of related party transactions and the comparative value analysis.

5. Testing and monitoring
• The tax authority has the right to request an enterprise to explain or provide additional documents if it detects any suspicions about related-party transactions or the determination of transaction value.
• If there is ambiguity or fraud in the report, the tax authority may request an inspection or administrative action.

6. Method of determining the value of related transactions
• Enterprises need to use reasonable methods to determine the value of related party transactions. This is important because the tax authorities will check whether the transaction value reflects the actual value.
• Methods of determining transaction value include:
⚬ Market price comparison method: Compare with the value of similar transactions in the market.
⚬ Cost-plus method: Determine the transaction value based on cost plus a reasonable profit margin.
⚬ Profit allocation method: Allocate profits among related parties based on the contribution ratio of each party.
⚬ Transfer value method: Based on the value of assets transferred between related parties.

7. Handling violations
• Failure to comply with reporting of related party transactions will result in administrative sanctions.
• If fraud or transfer pricing for tax evasion is detected, tax authorities may collect taxes, impose administrative sanctions, and prosecute criminally if there are signs of a crime.

8. Additional requirements
• Enterprises need to update information in the report when there are changes in related party transactions.
• The report must clearly show the actual related party transactions and the methods for determining the transaction value.

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