Collected and paid on behalf transactions between the Parent company and Subsidiary are not regulated by Decree 132/2020/ND-CP on related-party transactions.

On August 15^th, 2023, Hanoi Tax Department issued Official Letter No. 59257/CTHN-TTHT, according to which:

In case company A (subsidiary) authorizes company B (parent company with 100% capital contribution) to carry out activities related to the establishment of the business, company B transfers the contract value before establishment to Company A, which only generates collected and paid on behalf transactions and is not included in related-party transactions within the scope of Decree 132/2020/ND-CP.

In case company B and company A have transactions of buying, selling, exchanging, these transactions are related-party transactions within the scope of Decree 132/2020/ND-CP.