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DECREE 20/2025/NĐ-CP AMENDING DECREE 132/2020/NĐ-CP ON TAX MANAGEMENT REGULATIONS FOR ENTERPRISES WITH RELATED-PARTY TRANSACTIONS

On February 10, 2025, the Government issued Decree 20/2025/NĐ-CP amending and supplementing Decree 132/2020/NĐ-CP on tax management regulations for enterprises with related-party transactions.

1. Amend and supplement certain articles of Decree 132/2020/NĐ-CP:

1.1 Amend and supplement Point d, Point k, and add Point m of Clause 2, Article 5, related to cases considered as related-party transactions:

Key new point: The decree excludes cases where the guarantor or lender is a credit institution and has no management, control, or capital contribution relationship with the borrower.

Specifically, a bank loan, even if it accounts for ≥25% of the owner’s equity and more than 50% of the total value of medium- and long-term payable, is not considered a related-party transaction if:

  • The bank does not directly/indirectly participate in the management, control, or capital investment in the enterprise; or
  • The enterprise and the bank are not subject to the management, control, or capital investment of a third party.

1.2 Amend and supplement Clause 2, Article 21, related to the responsibilities of the State Bank in providing information on loans and related parties of credit institutions.

1.3 Replace Appendix I – Information on related-party relationships and transactions.

2. Transitional provisions

Cases of enterprises with related-party transactions with credit institutions in the years 2020, 2021, 2022, and 2023, and incurring non-deductible interest expenses, shall be implemented from the 2024 tax period as follows:

Cases where enterprises have no related-party relationship and no related-party transactions as prescribed in Decree 132/2020/NĐ-CP and Decree 20/2025/NĐ-CP

  • Non-deductible interest expenses that have not been carried forward to the following tax periods up to the end of the 2023 tax period shall be evenly allocated to the following tax periods for the remaining time according to the provisions on the time for transferring interest expenses specified at Point b, Clause 3, Article 16 of Decree 132/2020/NĐ-CP.

Cases where enterprises have related-party relationships and related-party transactions as prescribed in Decree 132/2020/NĐ-CP and Decree 20/2025/NĐ-CP

  • Non-deductible interest expenses that have not been carried forward to the following tax periods shall still apply according to the previous regulations at Point b, Clause 3, Article 16 of Decree 132/2020/NĐ-CP.

3. Effective date

This decree takes effect from March 27, 2025, and applies from the 2024 corporate income tax period.