The General Department of Taxation in Vietnam established a Transfer Price Inspection Department as part of its increased focus on transfer pricing.
At a national level, the Transfer Price Inspection Department will plan and implement/supervise the implementation of TP audits and improve the enforcement of the TP regulations/TP audit procedures as well as risk assessment criteria. At a provincial level, the new department will plan, organize and conduct TP audits, pursuant to the audit program of their respective provincial tax authorities and initiate requests for assistance from other relevant authorities and support from the GDT for complex cases and/or to speed up the process of a TP audit.
According to Jack Sheehan, Partner, Regional Tax Practice Group, it is the first time Vietnam has had teams dedicated to transfer pricing.
“It indicates the determination and aggressiveness of Vietnamese tax authorities in fighting against transfer pricing disputes,” says Jack.
Having a new TP department, taxpayers will be more pressured to comply with TP requirements.
“Further TP audits are expected to come out of these recent transfer pricing activities. With these additional measures in place (improved risk assessment criteria), the Vietnam government undoubtedly will continue with its proactive implementation and enforcement of the transfer pricing rules and its plan to combat what it perceives to be abusive transfer pricing practices,” adds Jack.
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