As part of the development of Vietnam’s transfer pricing regulatory
framework, the Ministry of Finance (MoF) recently released Circular
201/2013/TT-BTC (Circular 201) which provides formal guidance on the
Advance Pricing Arrangement (APA) programme, including the APA
framework, governance, process, roles, responsibilities and mutual
expectations for taxpayers and the Vietnamese authorities in applying
for, negotiating and executing APAs. Circular 201 will become effective from 5 February 2014.
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, for a period of not more than five years. Taxpayers have the option to re-new their APA should the circumstances be materially unchanged at the conclusion of the initial APA term.
The finalisation and implementation of Circular 201 is a significant positive step in
Vietnam’s transfer pricing regulatory framework. While not all the proposed changes received from the public consultation process have been reflected in the final Circular (the draft Circular was summarised in our News Brief dated 23 August 2013), theMoF and General Department of Taxation’s (GDT’s) commitment to the APA programme is welcome news.