In brief

The National Assembly of Vietnam introduced the mechanism for an Advance Pricing Arrangement (APA) programme in Vietnam as part of amendments made to the Law on Tax Administration (Law 21/2012/QH13), which became effective from 1 July 2013.
A draft implementing Circular has recently been prepared by the Ministry of Finance (MoF)/General Department of Taxation (GDT), which outlines the APA framework, governance, process, roles, responsibilities and mutual expectations for taxpayers and the Vietnamese authorities in applying for, negotiating and executing APAs.
In more detail

Vietnam’s transfer pricing regulations have been developing with a view towards achieving alignment with the standards of international counterparts. The drafting of APA regulations is progress towards achieving this and will provide a mechanism enabling taxpayers to agree upfront on the treatment of specific intercompany arrangements or transactions.
An APA allows taxpayers to agree, on a unilateral, bilateral or multilateral basis with the relevant tax authority (or in the case of bilateral or multilateral APAs, with multiple tax authorities), the pricing of their related party transactions, in advance, typically for a period of five years.
The implementing APA regulations will be an important milestone in the development of Vietnam’s transfer pricing regulatory framework.
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