On February 10th, 2025, the Government issued Decree No. 20/2025/ND-CP amending and supplementing several articles of Decree No. 132/2020/ND-CP dated November 05th, 2020 of the Government regulating tax management for enterprises with related-party transactions, accordingly:
- Amendments and supplements to regulations on related parties
Decree No. 20/2025/ND-CP amended and supplemented Point d, Point k, and supplemented Point m, Clause 2, Article 5 of Decree No. 132/2020/ND-CP regarding related parties as follows:
– Amendments and supplements to Point d as follows:
An enterprise that provides guarantees or lends loans to another enterprise in any form (including loans from third parties secured by the financial resources of the related party and other financial transactions of a similar nature) with the total outstanding loans balance between the borrowing enterprise and the lending or guarantor enterprise are at least 25% of the capital contribution of the owner of the borrowing enterprise, and accounts for more than 50% of the total outstanding loans balance of all medium-term and long-term loans of the borrowing enterprise.
The above regulations do not apply to the following cases:
– The guarantors or lenders are economic organizations operating according to regulations of the Law on Credit Institutions that do not directly or indirectly participate in the management, control, capital contribution, or investment in the borrowing enterprise or the guaranteed enterprise according to regulations in Points a, c, đ, e, g, h, k, l, and m, Clause 2, Article 5 of Decree No. 132/2020/ND-CP (amended in Decree No. 20/2025/ND-CP).
– The guarantors or lenders are economic organizations operating according to regulations of the Law on Credit Institutions, and borrowing or guaranteed enterprises are not directly or indirectly under the management, control, capital contribution, or investment of another party according to regulations in Points b, e, and i, Clause 2, Article 5 of Decree No. 132/2020/ND-CP (amended in Decree No. 20/2025/ND-CP).
– Amendments and supplements to Point k as follows:
Other cases where an enterprise (including the independent accounting branch that declares and pays corporate income tax) is subject to the actual management, control, or decisions regarding the production and business activities of the other enterprise;
– Supplements to Point m as follows
Credit institution with its Subsidiaries or Controlling Companies, or Affiliated Companies of Credit institutions according to regulations of the Law on Credit Institutions and amendments, supplements, or replacements (if any);
- Replacement of Appendix I – Information on related relationships and related transactions
This Decree takes effect from March 27th, 2025, and applies from the 2024 corporate income tax period.
