Advance Pricing Agreements

Vietnam’s rules on Advance Pricing Agreement (“APA”) can be found in Ministry of Finance (“MoF”)’s Circular 201/2013/TT-BTC dated 20 December 3013 (“Circular 201”).  The key rules are below:

Who may apply for APA?

All registered taxpayers in Vietnam that have related party transactions may lodge an application for APA before filing the corporate income tax return for the first year of the period that the taxpayer proposes to apply APA[1]

Who may be covered by an APA?

An APA may cover[2]:

  • Entities that have related party relationships within a group that operates cross tax jurisdictions (countries or territories); or
  • Entities that have a relationship of being an permanent establishment (“PE”) of their head office. Each PE is considered as a separate enterprise (i.e. taxpayer).

How many types of APA are there?

There are two types of APA[3]:

  • Unilateral APA – is an APA negotiated and concluded between Vietnamese tax authority and a taxpayer, at the taxpayer’s request;
  • Bilateral/multilateral APA – is an APA negotiated and concluded between/amongst Vietnamese tax authority, a taxpayer and the tax authorities of other countries that involve in the assessment of the taxpayer’s tax liabilities under the tax treaties concerned.

What transactions may be covered by an APA?

Transactions that may be covered by an APA include all purchases, sales, exchanges, leases, lettings, assignments or transfers of goods or services (briefly referred to as commercial transactions) amongst related parties, except for transactions involving goods or services that are subject to government’s price control policies[4].  

A taxpayer may[5]:

  • request for one or more related party transactions to be covered under an APA;
  • combine a multiple of inter-related transactions in determining their arm’s length based on relevant factors including business practices, norms, functions, assets, and associated risks in the same manner as they are determined under the transfer pricing rules.

What does the APA process involve?

The APA process includes the following steps[6]:

  • Pre-lodgement consultation – the applicant consults the GDT for approval-in-principle to lodge an APA application;
  • Lodgement of APA application – the applicant lodges the APA application within 120 days (150 days in case of a delay) following GDT’s approval-in-principle;
  • APA application appraisal – GDT and the applicant meet within the next 15 days to agree on APA work agenda. The GDT then has 90 days to appraise the APA application.  During this this period, the GDT may request the applicant and other concerned parties to provide additional information or document for its appraisal and/or conduct visits to the premises of the applicant and its related parties;
  • Negotiation – The GDT and the applicant negotiate and agree on the terms of the APA; and
  • Conclusion and execution – An APA is drafted, reviewed, discussed, and concluded by the parties.

What is the effective period of an APA?

An APA is effective an initial period up to 5 years, which is then renewable for another period up to 5 years subject to the taxpayer’s request for renewal, which must be lodged at least 6 months before the expiry date[7]. The terms in an executed APA may be amended or updated at the taxpayer’s request.  An executed APA may also be terminated or cancelled.

What documents are required for an APA application?

An APA application must include a completed standard form No. 2/APA-CT with the following typical information/documents (amongst others):

  • Identification details of the applicant and its related parties;
  • Description of the nature, magnitude, and period of the related party transactions to be covered by the APA;
  • Information of the group’s ownership, organisational, structures;
  • Economic and functional analysis; assets and risk analysis;  intellectual properties etc.
  • Accounting policies, copies of audited financial reports and corporate tax returns of the latest three years;
  • Information relating to the transfer pricing method(s) adopted by the applicant and all related transfer pricing assumptions and analysis.


[1] Art 2.1

[2] Art 3.3

[3] Art 3.2

[4] Art 3.4

[5] Art 3.4

[6] Art 7

[7] Arts 23 & 24.

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