Issuance of Decree 132/2020/ND-CP replacing Decree 20/2017/ND-CP and Decree 68/2020/ND-CP

Transfer Pricing Alert  |  November 2020

After more than three years of implementing Decree No. 20/2017/ND-CP (“Decree 20“) and other amending and guiding documents such as Decree No. 68/2020/ND-CP (“Decree 68“) and Circular No. 41/2017/TT-BTC (“Circular 41“), on 5 November 2020, the Government has officially issued Decree No.132/2020/ND-CP (“Decree 132“) to replace Decree 20 and Decree 68 prescribing tax administration for enterprises engaged in related party transactions. This Decree is inclusive of a number of changes that have material effects on taxpayers’ compliance status with Transfer Pricing regulations in Vietnam.

Under this alert, Grant Thornton Vietnam would like to update some critical changes and noteworthy points in Transfer Pricing regulations under Decree 132 regarding the preparation of Transfer Pricing dossier at the Company, specifically as below:

1. Narrowing the arm’s length range for prices of related party transactions
2. Adding more subjects to be regarded as related parties
3. Expanding the concept of Commercial Database
4. Provisions relating to Country-by-Country reports
5. Deadline for provision of Transfer Pricing Documentation as required by the tax authority during tax audits and inspections
6. Regulations on deductible interest expenses
7. Effective date

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