Introduction
The Vietnamese government has enacted Decree 122/2025/ND-CP, effective as of July 1, 2025, introducing significant changes to the approval procedure for Advance Pricing Agreements (APAs). This measure seeks to simplify the process and provide greater administrative efficiency in transfer pricing management.
Direct delegation to the Minister of Finance
One of the main changes is the transfer of the power to approve bilateral and multilateral APAs. Previously, these required validation by the Prime Minister following a proposal from the Ministry of Finance. Under the new decree, this power is delegated directly to the Minister of Finance, significantly streamlining the procedure.
Participation of the Tax Department
The Tax Department of the Ministry of Finance remains a key player. This body is responsible for:
- Preparing the APA negotiation plan.
- Coordinating consultations with other authorities when necessary.
- Negotiating with foreign tax administrations and preparing the draft APA for approval.
This new approach strengthens its technical and operational role in the formalization of agreements.
Application to pending applications
The Decree also covers APA applications submitted before July 1, 2025. If they have not yet been submitted to the Prime Minister, they will be processed under the new legal framework, under the direct authority of the Minister of Finance.
Final considerations
Decree 122 represents a step toward more efficient and decentralized management of Advance Pricing Agreements in Vietnam. Its implementation will allow for a faster response from the competent authority, which could translate into greater tax certainty for taxpayers.
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Source: Decree No. 122/2025/ND-CP – Vietnam