Local files

Local files, including information about transfer pricing, transfer pricing policies and methods, prepared and deposited at taxpayers’ offices.

Enterprises shall be responsible for retaining and providing the transfer pricing files comprising information, documents, data and records, including:

  1. Interrelationship and related party transaction information provided in the form given in Appendix I;
  2. Local files, including information about transfer pricing, transfer pricing policies and methods, prepared and deposited at taxpayers’ offices according to the directory of information and documents prescribed in Appendix II;
  3. Master files containing information about business activities of multinational groups, transfer pricing policies and methods of global groups and policies on allocation of income and decentralization of operations and functions in value chains of groups according to the directory of information and documents prescribed in Appendix III;
  4. Country-by-Country reports of profits of ultimate parent companies prescribed in Appendix IV

Content of Local files

Details about the taxpayer

  • Information about the management and organization structure, including the organizational chart, list and brief information of persons holding executive positions in the corporation to which the taxpayer must report directly, and office and head office addresses of these position-holders

  • Detailed information on the taxpayer’s business activities and business strategies, including information related to whether the taxpayer is involved in or affected by the process or decision for restructuring or transfer of intra-group capital or assets in the declaration year

  • Information about businesses with similar products and services in domestic and international markets (main competitors)

local-files
Information about related-party transactions

With respect to specific material types/lines of related-party transactions in which the taxpayer is involved, providing the following information:

  • Description of material related-party transactions (e.g. provision of production services, purchase of goods, provision of services, loans, performance and financial guarantees, concession of intangible assets, etc.) and the context in which these transactions are made

  • Value and invoice of intra-group payments and receipts for each type of transaction involving subsidiaries (e.g. payments and receipts arising from products, services, royalties, loan interest, etc.) that are regulated by foreign tax authorities

  • Identification of related parties involved in related party transactions and relationships between these related parties

  • Copies of related transaction agreements and contracts

  • Detailed functional and comparative analysis for taxpayers and related parties for each type of related transaction, including any year-on-year changes

  • Explanatory notes on the most appropriate method for transfer pricing related to the related-party transaction lines and reasons for selection of the proposed method of transfer pricing

  • Identification of the related party selected for determination of the related-party transaction price, and explanation for the reasons for selection

  • Summary of material assumptions for application of the proposed transfer pricing method

  • Explanation for analysis of multiple-year data (if any)

  • List and description of (internal and external) independent comparables and necessary financial information and indicators for analysis of transfer prices, including description of methods for search for comparative data and sources of data to be searched

  • Description of comparative adjustments already made, reasons, and documentation of adjustment results

  • Description of the reasons and interpretation of application of the proposed transfer pricing method that conforms to the principles of arm’s length transaction

  • Summary of information on quantitative financial indicators and criteria, and reasons and explanations for use thereof for application of the proposed transfer pricing method

  • Copies of unilateral and bilateral, multilateral APA Agreements and other tax agreements related to the taxpayer’s related transactions to which tax authorities of Vietnam are not parties or signatories

Financial information

  • Taxpayer’s financial statements in the declaration year

  • Information and plan on allocation and approaches for use of financial data upon application of the proposed transfer pricing method

  • Brief description of financial data involved in the comparative analysis and data sources

  • Summary of reasons and explanations for causes, business plans, investment and development strategies for enterprises with loss-making business results for 03 years or more

Contact

If your business is interested in learning about Vinasc’s transfer pricing services, please contact Vinasc using the information provided below. We will gather the necessary information and send a detailed quotation for your business’s consideration.