What the transfer pricing file consists of
Where a taxpayer has related-party transactions, it is responsible for retaining and providing a transfer pricing file comprising information, documents, data and records:
| Component | Legal basis |
|---|---|
| Information on related-party relationships and transactions in the prescribed form | Appendix I, Decree 132/2020/ND-CP dated 5 November 2020 |
| Local file — transfer pricing information, policies and methods, prepared and held at the taxpayer’s offices | Appendix II, Decree 132/2020/ND-CP |
| Master file — the multinational group’s business activities, global transfer pricing policies and methods, and policies on income allocation and the decentralisation of functions along the group’s value chain | Appendix III, Decree 132/2020/ND-CP |
| Country-by-Country Report (CbCR) of the ultimate parent company | Clause 5 and Appendix IV, Decree 132/2020/ND-CP |
Decree 132/2020/ND-CP is cited as at the date of drafting. For any specific tax period, the source decree and any amendments in force at that time must be verified.
Why companies must prepare the file
The tax authorities are empowered to set price levels, profit margins or profit-split ratios, and to assess taxable income or corporate income tax payable for any taxpayer that fails to comply with transfer pricing declaration or determination requirements, or that fails to provide — or provides incompletely — the data and information required to determine related-party transaction prices.
For a company with related-party transactions, preparing and maintaining the transfer pricing file is therefore compulsory, not optional.
Our deliverables
- A Local file in English and Vietnamese
- A Cover Letter for the TP report in English and Vietnamese
- Form No. 01 — Information on related-party relationships and transactions
- Form No. 02 — List of information and documents required in the Local file
- Form No. 03 — List of information and documents required in the global Master file
- Explanation letter for Form No. 04 — Declaration of information in the Country-by-Country Report
- Preparation, or review and translation, of the Master file
Our process
1. Information request
Provide the list of information and documents for the company to prepare; interview and collect information on functions, assets, risks and related-party transactions.
2. Industry analysis
Analyse the industry in which the company operates.
3. Inter-company transactions
Document the company’s related-party transactions and the pricing policies applied during the year under study.
4. Function and risk analysis
Analyse the functions performed, assets used and risks assumed in relation to related-party transactions during the year under study.
5. Selection of TP method
Select the appropriate method(s) to test the company’s related-party transactions.
6. Application of the method — comparability analysis
Apply the selected method(s) to assess the arm’s length nature of the pricing policy applied.
7. Economic analysis
Document, evaluate and analyse the entity’s business performance, including related-party transactions.
8. Drafting and finalising the Local file
- Draft the Local file covering industry analysis, functional analysis, related-party transactions and financial analysis
- Summarise the basis for selecting the transfer pricing method
- Prepare the Benchmarking Study (BMS) on an entity-wide basis for the period under review
- Provide a draft for your comments and finalise upon your approval
9. Preparation, or review and translation, of the Master file
Dealing with the tax authorities
The transfer pricing file may be reviewed and investigated by authorities empowered to impose penalties, late-payment interest and assessments. We are comfortable dealing with the tax authorities on your behalf on transfer pricing matters.
Why choose ASTC for transfer pricing
| Your challenge | The value we add |
|---|---|
| Shortage of staff and transfer pricing expertise | A dedicated team combining local experience with global knowledge |
| Insufficient working practices and methodology | A standardised nine-step process with a clear deliverable at each stage |
| Excessive cost and low efficiency | Selecting the right method from the outset, avoiding rework |
| Files rejected by the tax authorities | A file structured clearly to the appendices of Decree 132 |
Confidentiality: a transfer pricing file contains sensitive group financial and strategic information. ASTC handles the entire file under its internal confidentiality regulations, with role-based access control and activity logging.
