The Government issued Decree No. 20/2025/ND-CP dated February 10, 2025 amending and supplementing a number of articles of Decree No. 132/2020/ND-CP dated November 5, 2020 regulating tax management for enterprises with related-party transactions. This Decree takes effect from March 27, 2025 and applies from the 2024 corporate income tax period.
In which, Decree No. 20/2025/ND-CP amends and supplements points d, k and add points m Clause 2, Article 5 of Decree No. 132/2020/ND-CP on relevant parties affiliate relationship
Point d, Clause 2, Article 5, Decree No. 132/2020/ND-CP stipulates that related parties are: d) An enterprise that guarantees or lends capital to another enterprise in any form (including loans from third parties secured from the financial resources of the related party and financial transactions of a similar nature) provided that the loan amount is at least equal to 25% of the equity of the borrowing enterprise and accounts for more than 50% of the total value of the borrowing enterprise's medium and long-term debts.
The above content is amended in Decree No. 20/2025/ND-CP as follows: d) An enterprise guarantees or lends capital to another enterprise in any form (including loans from third parties secured by the financial resources of the affiliated party and financial transactions of a similar nature) provided that the total outstanding loans of the borrowing enterprise with the lending or guarantor enterprise is at least equal to 25% of the equity capital of the borrowing enterprise and accounts for more than 50% of the total outstanding loans of all medium- and long-term debts of the borrowing enterprise.
Provisions in point d above Not applicable in the following cases :
d.1) The guarantor or lender is an economic organization operating under the provisions of the Law on Credit Institutions 2024 that does not directly or indirectly participate in the management, control, capital contribution, or investment in the borrowing enterprise or the guaranteed enterprise as prescribed in points a, c, d, e, g, k, l, and m of this clause.
d.2) The guarantor or lender is an economic organization operating under the provisions of the Law on Credit Institutions and the borrowing or guaranteed enterprise is not directly or indirectly subject to the management, control, capital contribution or investment of another party as prescribed in points b, e and i of this clause.
Point k, Clause 2, Article 5, Decree No. 132/2020/ND-CP regulations on related parties: k) Other cases in which an enterprise is subject to the actual management, control and decision-making on the production and business activities of the other enterprise.
The above content is amended in Decree No. 20/2025/ND-CP as follows: k) Other cases in which enterprises (including independent accounting branches that declare and pay corporate income tax) be subject to the actual management, control and decision-making of the other enterprise's production and business activities;
Additional cases of related parties
Decree No. 20/2025/ND-CP also Supplement point m, clause 2, Article 5, Decree No. 132/2020/ND-CP The provisions of the affiliated parties are: m) Credit institutions with Subsidiaries or with Controlling Companies or with Affiliated Companies of credit institutions as prescribed in the Law on Credit Institutions and amendments, supplements or replacements (if any).
Additional responsibilities of the State Bank
Clause 2, Article 21 of Decree No. 132/2020/ND-CP stipulates that the State Bank, within the scope of its tasks and powers, is responsible for coordinating the provision of information and data on foreign loans and debt repayments of each specific enterprise with related-party transactions based on the list requested by the Tax Authority, including data on loan turnover, interest rates, interest payment periods, principal payment, actual capital withdrawal, debt repayment (principal, interest) and other relevant information (if any).
In addition to the above provisions, Decree No. 20/2025/ND-CP supplements the responsibility of the State Bank to coordinate in providing information reported in accordance with the law on related persons of members of the Board of Directors, members of the Board of Members, members of the Supervisory Board, General Director (Director), Deputy General Director (Deputy Director) and equivalent positions as prescribed in the Charter of the credit institution; related persons of shareholders owning 1% or more of the charter capital of the credit institution; affiliated companies of the credit institution according to the management data information system of the State Bank when requested by the tax authority".
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