Transfer pricing (TP) environment in Vietnam lately
has been stirred up by quite a few of transfer pricing adjustment cases
being disclosed in public. The adjustments were made during 2013
transfer pricing investigation conducted by General Department of
Taxation (GDT) and provincial tax authorities.The transfer pricing audit results reported on widespread media coverage at the end of October imply a long step-forward in Vietnam tax authority’s capacity as well as their plan to implement and enforce the TP regulations and compliance in Vietnam.

In particular, the National Action Plan for the period of 2012 – 2015 which aims at least 20% of the annual tax audit cases devoted to TP audits have been strictly implemented from the central authority cascading to the provincial level. This is followed by detailed desktop review of 5,531 foreign invested enterprises (“FIE”) for potential signs of TP abuse and risks.

Accordingly, an inspection tour to 122 enterprises in 23 cities and provinces was conducted in September 2013 which were perceived to be high risk for TP. The audit triggers in their investigation however remain the same compared with previous years which focus on companies making loss consecutively but keep expanding business scale. Furthermore, the industry focuses by tax authority are textile and garment, real estate and construction as well as companies located in export processing zones.

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