Decree 20/2025/ND-CP amending and supplementing a number of articles of Decree 132/2020/ND-CP on tax management for enterprises having related-party transactions.

Issuing Agency: Government

Effective Date: March 27, 2025, applicable from the 2024 corporate income tax period

Amendments and Supplementary Content:

Determining Related Parties:

A guarantor or lender, being an economic organization operating under the Law on Credit Institutions and not directly participating in the management, control, capital contribution, or investment in the borrowing or guaranteed enterprise, nor directly or indirectly subject to the management, control, capital contribution, or investment of another party, shall not be considered a related party under Point d, Clause 2, Article 5, Decree 132/2020/ND-CP.

Independent branches that declare and pay corporate income tax and are under the management and control of another enterprise are determined to be related parties according to Point k, Clause 2, Article 5, Decree 132/2020/ND-CP.

Responsibilities of the State Bank:

The State Bank is now responsible for coordinating the provision of information on related persons of members of the Board of Directors, members of the Board of Members, members of the Supervisory Board, General Director (Director), Deputy General Director (Deputy Director), and equivalent positions as prescribed in the charter of the credit institution. This includes related persons of shareholders owning 0.1% or more of the charter capital of the credit institution, and affiliated companies of the credit institution when requested by the tax authority.

Changing the Declaration Form:

Replacing Appendix I of Decree 132/2020/ND-CP with Appendix I of Decree 20/2025/ND-CP.

Transitional Handling:

For the tax periods from 2020 to 2023, if the re-determination of related parties affects the determination of deductible interest expenses, the handling will be as follows:

• If the enterprise has no related party relationship and no related party transactions, non-deductible and not yet carried forward interest expenses accumulated to the end of the 2023 tax period will be evenly distributed and transferred to the following tax periods for the remaining period (no more than 5 years from the year following the year in which the interest expenses arise).

• If the enterprise has a related party relationship and related party transactions, non-deductible and not yet carried forward interest expenses will be allowed to be transferred to the following tax periods (no more than 5 years from the year following the year in which the interest expenses arise).

Effective date:

The Decree takes effect from March 27, 2025 and applies from the 2024 corporate income tax period.