Decree No. 20/2025/NĐ-CP amends and supplements certain articles of Decree No. 132/2020/NĐ-CP dated November 5, 2020, of the Government on tax management for enterprises with related party transactions.

DECREE

Amending and supplementing certain Articles of Decree No. 132/2020/NĐ-CP

dated November 5, 2020 of the Government on tax management for enterprises with related party transactions

for enterprises with related party transactions

^____________

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Law on Tax Administration dated June 13, 2019;

Pursuant to the Law on Corporate Income Tax dated June 3, 2008; Law amended and supplemented certain Articles of the Law on Corporate Income Tax dated June 19, 2013; June 2013;

Pursuant to the Law amending and supplementing certain Articles of Laws on Taxation dated November 26, 2014;

Pursuant to the Law on Credit Institutions Pursuant to the Law on Credit Institutions dated January 18, 2024;;

At the proposal of the Minister of Finance;

The Government promulgates this Decree amending and supplementing certain Articles of Decree No. 132/2020/NĐ-CP dated November 5, 2020 of the Government on tax management for enterprises with related party transactions. of Article 1. Amending and supplementing certain Articles of Decree No. 132/2020/NĐ-CP dated November 5, 2020 of the Government on tax management for enterprises with related party transactions

1. Amending and supplementing Point d, Point k and adding Point m of Clause 2, Article 5 as follows:

"d) A business providing a guarantee or lending funds to another business under any form (including loans from third parties guaranteed by the resources of the associated party and similar financial transactions) provided that the total outstanding debt of the borrowing business to the lending or guarantee-providing business is at least 25% of the equity capital of the borrowing business and constitutes more than 50% of the total outstanding debt of all medium and long-term debts of the borrowing business.

"a) Amend and supplement Point d as follows:"

The provisions of Point d of this Clause shall not apply to the following cases:

d.1) The guarantor or lender is an economic organization operating in accordance with the Law on Credit Institutions and does not directly or indirectly manage, control, invest or contribute capital in the borrowing business or the guaranteed business as stipulated in Points a, c, đ, e, g, h, k, l, and m of this Clause.

d.2) The guarantor or lender is an economic organization operating in accordance with the Law on Credit Institutions and the borrowing business or the guaranteed business is not directly or indirectly subject to the management, control, investment, or capital contribution of another party as stipulated in Points b, e, and i of this Clause."

b) Amending and supplementing Point k as follows:

"k) Other cases where a business (including an independent branch conducting corporate income tax declaration and payment) actually manages and controls the production and business activities of another business;"

c) Adding Point m as follows:

"m) Credit institutions with subsidiaries or affiliated companies or associated companies of credit institutions as prescribed in the Law on Credit Institutions and any amendments or replacements thereof (if any);"

2. Amending and supplementing Clause 2, Article 21 as follows:

"2. The State Bank within its scope of duties and powers shall be responsible for:

Cooperating to provide information and data on foreign loans and repayments of each specific enterprise with related party transactions based on the list requested by the Tax Authority, including data on loan amounts, interest rates, interest and principal repayment periods, actual withdrawal of funds, repayment (principal and interest), and other relevant information (if any).

Cooperating to provide information reported according to the laws regarding related parties 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 stipulated in the Charter of credit institutions; related parties of shareholders holding 1% or more of the charter capital of credit institutions; associated companies of credit institutions according to the information management system of the State Bank when requested by the Tax Authority."

Replacing Appendix I - Information on Related Party Relationships and Related Party Transactions issued together with Decree No. 132/2020/NĐ-CP dated November 5, 2020 of the Government on tax management for enterprises with related party transactions with Appendix I issued together with this Decree.

Article 2. In case, during the corporate income tax calculation period of 2020, 2021, 2022, and 2023, the borrowing enterprise only has related party relationships with economic organizations operating in accordance with the Law on Credit Institutions as stipulated in Point d, Clause 2, Article 5 of Decree No. 132/2020/NĐ-CP and the borrowing enterprise with the lender or guarantor falls under the cases prescribed in Points d.1 and d.2, Clause 2, Article 5 of Decree No. 132/2020/NĐ-CP amended and supplemented in Article 1 of this Decree, and the related party transactions fall within the scope regulated in Clause 2, Article 1 of Decree No. 132/2020/NĐ-CP and the interest expenses not deductible as prescribed in Point a, Clause 3, Article 16 of Decree No. 132/2020/NĐ-CP, then starting from the tax calculation period of 2024, the following shall be implemented:

Article 3. Transitional Provisions

1. In case the enterprise does not have related party relationships and does not engage in related party transactions as prescribed in Decree No. 132/2020/NĐ-CP and this Decree, the undeductible interest expenses and those not transferred to subsequent tax calculation periods up to the end of the 2023 tax calculation period shall be evenly allocated and transferred to subsequent tax calculation periods for the remaining time according to the regulations on the transfer period of interest expenses at Point b, Clause 3, Article 16 of Decree No. 132/2020/NĐ-CP.

2. In case the enterprise has related party relationships and engages in related party transactions as prescribed in Decree No. 132/2020/NĐ-CP and this Decree, the undeductible interest expenses and those not transferred to subsequent tax calculation periods shall be implemented according to the regulations at Point b, Clause 3, Article 16 of Decree No. 132/2020/NĐ-CP.

1. This Decree takes effect from March 27, 2025 and applies from the corporate income tax calculation period of 2024.

Article 4. Implementation and Effectiveness

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial People's Committees under central cities, and related organizations and individuals are responsible for implementing this Decree.

2. The ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, chairpersons of provincial people's committees under the central government, and relevant organizations and individuals are responsible for implementing this Decree.