Transfer Pricing

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The emerging scene of transfer pricing in Vietnam

Transfer pricing covers all aspects of inter-company pricing arrangement for goods, services and intangibles covering both domestic and cross border transactions. It is increasingly becoming an area of greater focus . The principle aim of local tax authorities is to focus on protecting their domestic tax base from erosion through transfer pricing adjustments being made by the foreign tax authorities on transactions involving multinationals headquarter overseas and from taxpayers shifting profits within the country to tax shelters  or out of the country using transfer prices without commercially supportable reasons and/or not complying with the local transfer pricing regulations

Transfer pricing has been an area of focus in many tax audits and the tax authorities are expected to increasingly emphasize on this moving forward.

In addition, multinational companies are continuously developing strategic footholds to meet the ever-changing market dynamics. As a result, compliance with the differing requirements of multiple overlapping tax jurisdictions is a complicated and time-consuming task.

This environment places a premium on audit and dispute avoidance techniques for which multinationals are required to adopt a complete and holistic approach, which include not only preparation of quality transfer pricing documentation but also sound strategies on tax audits and defense.

In Vietnam, Circular 117 was issued in December 2005, providing the basic framework of Vietnam’s transfer pricing rules. It requires taxpayers to submit an annual transfer pricing declaration form (Form GCN-01/TNDN) together with their corporate income tax returns within 90 days after the year end and maintain contemporaneous transfer pricing documentation. The circular requires companies to take proactive steps to document their transfer pricing arrangements and documentation requirements. Vietnam imposes penalties for non compliance with their local transfer pricing regulations and any transfer pricing adjustments that may arise in a tax audit.

If this is your situation

  • You require assistance in the preparation or review of the annual TP declaration
  • You need advice on transfer pricing documentation requirements in Vietnam or other jurisdictions
  • You need to respond to transfer pricing audit / enquiry from tax authority
  • You need to know whether your internal controls over transfer pricing are sufficient
  • You need advice on transfer pricing implications of existing or proposed international transactions
  • You need to align with your global transfer pricing policy or formulate a local transfer pricing policy
  • You need assistance in constructing effective cross-border strategies and managing global effective tax rate

How we can help you

Our services include:

Review or preparation of annual TP return

Assist in the preparation or review of the annual return to ensure completeness and consistency.

Transfer pricing risks and opportunities review

Evaluate your transfer pricing position and provide practical recommendations to mitigate transfer pricing risks and explore planning opportunities.

Transfer pricing strategy development / planning

Develop transfer pricing strategies that support changes or conversion of your business operation and enable your business to realize its long-term objectives

Transfer pricing documentation

Develop local or global transfer pricing documentation and defense files consistent with your needs.

Transfer pricing audit defence

  • Defend transactions under audit review with effective strategies;
  • Reduce burden of document preparation; and
  • Shorten audit period through satisfactory resolution of issues.

Dispute resolution – Mutual Agreement Procedure (“MAP”)

Facilitate negotiations with competent authorities and assist in the resolution of disputes by identifying technical and factual issues, analyse findings, prepare presentations.