SBLAW would like to provide you some regulation of Transfer Pricing in Vietnam as follows:
Vietnam has transfer pricing regulations which outline various situations where transactions will be considered as being between related parties and the mechanisms for determining the market ’arm’s length’ transaction value (comparable uncontrolled price, cost plus, resale price, comparable profits and profit split).
Under the wide-ranging definition of related parties, the control threshold is lower than in many other countries (20%). The definition also extends to certain significant supplier, customer and funding relationships between otherwise unrelated parties.
Compliance requirements include an annual declaration of related-party transactions and transfer pricing methodologies used. Specified documents must be filed together with the annual CIT return.
Companies which have related-party transactions must prepare and maintain contemporaneous transfer pricing documentation.
A foreign enterprise without a permanent establishment in Vietnam must pay tax only on income arising in Vietnam.
A permanent establishment in Vietnam is a place for production and/or the entity’s business activities, which can be in the form of:
• Branches, plants and a location in Vietnam where natural resources are mined;
• Construction sites;
• Establishments providing services;
• Agents; and
• Representatives.
