Related transaction document consulting service
Introducing related party transaction consulting services
Related party transactions under Decree 132/2020/ND-CP are transactions between related parties, including the purchase and sale of goods, provision of services, transfer of intangible assets or internal expenses — these transactions must be documented to prove that the transaction price is consistent with the market price to avoid tax risks.
Common transfer pricing records include: Local file, Master file and Country by Country report (CbCR) — each with different purposes and scope of information for transaction pricing and tax reporting.
Why do businesses need to prepare documents? Preparing transfer pricing documents helps businesses prove the basis for determining prices, reduce the risk of tax authorities determining taxable income, avoid additional collection, administrative fines and protect the reputation of the parent group as well as management agencies.
When do businesses need to prepare related party transaction records?
- Foreign-invested enterprises (FDI) when transacting with parent companies, group companies or other related parties — this is the most common case that requires review and documentation of related-party transactions.
- Domestic enterprises with internal transactions exceeding the threshold prescribed by the decree (for example, sales transactions, service provision, internal profit transfer) — when the total value or frequency exceeds the threshold, they must prepare a declaration file.
- When the tax authority requests to provide documents during the inspection or examination process: if requested, the enterprise must present the Local file, Master file or related declarations (form 01/02/03 as prescribed) to explain the transaction price.
- When there are signs of transfer pricing risks: for example, internal purchase and sale prices are unusual compared to the market, profits fluctuate abnormally, or transactions between related parties have no explanatory documents — that is when the business should request consulting services to review and prepare complete documents.
Legal basis for related party transactions
- The main legal basis is currently Decree 132/2020/ND-CP and related guiding circulars - these documents provide detailed regulations on the concept of related party transactions, methods of determining prices, required documents and declaration responsibilities of enterprises according to tax law provisions.
- Filing Exemption Threshold: The Decree and Circulars prescribe criteria, value thresholds or transaction frequencies to determine when a Local file/Master file must be created. Note: This threshold may vary by transaction type and should be checked for updated guidance before applying to the business.
- Declaration of related party transaction information: The declaration forms (for example, Form 01, 02, 03 according to the guidance of Decree 132 and related circulars) are the forms that enterprises must use when declaring or when requested by the tax authority. Enterprises should keep complete price determination records to facilitate reporting and explanation when needed.
Note:
The legal information in this section is provided for guidance only — always check the official text (Decree 132/2020/ND-CP and updated Circulars) to ensure the current regulations are applied correctly. If necessary, we can assist in researching and quoting the specific provisions applicable to your situation.
Job content in related party transaction dossier consulting service
- Review and classify related-party transactions: we clearly identify transactions of goods purchase and sale, service provision, transfer of intangible assets, internal costs between related parties; at the same time, make a list of related parties and classify them according to ownership and control relationships to determine the scope of documentation.
- Analyze functions – risks – assets and pricing methods: apply standard methods (CUP, Cost Plus, TNMM, resale) to determine reasonable transaction prices; analyze functions (who produces, who distributes, who provides services), risks and related assets to choose a pricing basis appropriate to the actual operations of the business.
- Prepare Local file: prepare detailed identification file (local file) including comparative analysis, relevant financial data, contracts, internal reports and transaction price determination arguments to serve tax authority inspection and internal management of the group.
- Support for creating Master file and CbCR (if needed): for businesses belonging to multinational corporations, we support synthesizing information to create a group file (Master file) and Country by Country report (CbCR) as required, ensuring consistency between local files and group files.
- Review declarations and statements: review the declaration form for related party transactions (forms 01, 02, 03 according to Decree 132) to ensure accurate declaration, avoid errors, lack of information and reduce the risk of administrative sanctions or corporate income tax arrears.
- Consulting on price policy adjustment and accounting: based on the results of price determination analysis, we propose adjustments to price policy, cost allocation, and accounting methods to reduce transfer pricing risks and ensure tax compliance.
Required data checklist (sample)
Data type | Purpose of data use | For example |
Financial reports & books | Provide a financial basis for analyzing profit margins and costs | Annual financial statements, detailed books |
Contracts, affiliation agreements | Proof of transaction conditions and payments | Internal service provision contract |
Market data & comparison | Used for benchmarking when determining price | Reference price list, industry report |
Service process at PMH
Receiving documents, declarations and financial data
We send a detailed checklist for customers to prepare data before starting.
Review and identify related party transactions
Examine the relationship between parties, classify transactions and assess transactions with high transfer pricing risk.
Prepare analysis report & prepare related party transaction documents
Including functional analysis, pricing method, selection of comparative data and preparation of appropriate Local file/Master file.
Handover & submission according to regulations
Support in completing documents to submit to management agencies or store at the company according to the requirements of the Decree.
Accompanying in explaining when there is a tax inspection or audit
Representing or supporting in explaining in detail before the tax authority, providing arguments and documents to prove the basis for determining the price.
If you need professional transfer pricing documentation services for FDI companies or domestic enterprises
Benefits of using related party transaction consulting services
- Compliance with legal regulations: the service helps businesses build documents in accordance with Decree 132 and regulations, avoiding the risk of administrative penalties or tax arrears when the tax authority inspects.
- Reduce the risk of corporate income tax assessment: clear valuation records and analysis reports help demonstrate the basis for calculating transaction prices, thereby reducing the possibility of tax authorities adjusting taxable income and collecting tax arrears and late payment penalties.
- Legalize internal pricing policies and increase financial transparency: when affiliates have clear and transparent pricing policies, it will create trust with the parent corporation, investors and management agencies, and at the same time help tax payment and financial reporting to be carried out more conveniently.
- Long-term cost savings: the cost of using the filing service is often lower than the cost of paying additional taxes, administrative fines or adjusting corporate income tax.
The role of internal/business accounting
Prepare data and documents
Accountants provide financial reports, books, contracts, agreements and transaction data to serve analysis to determine transaction prices.
Coordination and timely information provision
Quick coordination between internal accountants and the consulting team helps shorten the time for document preparation, ensuring complete and accurate data.
Implement post-consultation recommendations
Internal accounting helps implement adjustments to pricing policies, cost accounting and reporting, ensuring consistency in financial reporting and tax declarations.
Risks of not establishing a related-party transaction profile
- Subject to corporate income tax (CIT): If the tax authority determines that the transaction price does not reflect the market price, the enterprise may have its taxable profit adjusted upwards.
- Administrative penalties and fines: businesses may have to pay additional taxes, fines and late fees if their records are incomplete or incorrect.
- Being classified as a high tax risk: this can lead to more frequent audits and affect the business's reputation with regulators and investors.
- Impact on management decisions: tax risks can reduce internal bargaining power, affecting the company's pricing policy and profits in the long term.
Related administrative penalties
- Penalty for failure to prepare or provide documents when requested by tax authorities — the penalty depends on current regulations and may be accompanied by tax arrears.
- Penalties for false or incomplete declarations in the declaration of related-party transaction information — leading to risks of report adjustment and collection.
- Collect additional fees and late payment penalties if, after inspection, the tax authority adjusts the taxable income of the enterprise to increase.
Short illustration (example):
an FDI enterprise has an internal service provision transaction with the parent company. If there is no functional analysis record and pricing argument, the tax authority may increase the taxable revenue, leading to additional collection and penalty - the settlement cost may be much greater than the initial cost of using professional transfer pricing documentation service .
PMH's commitment
In-depth understanding of Decree 132/2020/ND-CP and relevant international regulations
our team of experts regularly updates legal changes to provide accurate advice in accordance with current regulations.
Practical experience with FDI enterprises and corporations
PMH has supported many companies in reviewing related party transactions, determining transaction prices and preparing Local file/Master file documents in accordance with international standards.
Strict data security
all company financial and contractual data are securely stored and processed according to internal security policies and confidentiality agreements with customers.
Support in explaining to tax authorities
PMH accompanies businesses when explanations are needed, providing arguments, data and participating in working directly with tax authorities under authorization or providing professional advice to protect the business's pricing viewpoint.
Cost of consulting services on related transaction documents
- Factors affecting costs: size of businesses, number and type of related transactions, complexity of functional analysis and data collection — these factors determine the amount of work to prepare a pricing profile.
- Transparent quotation policy: PMH provides both a full package (including review, analysis, document preparation and short-term explanation support) and quotations for each document/task for customers to flexibly choose.
Service package illustration (for reference):
| Service packages | Scope of service | Suitable subjects |
Basic Package | Transaction review, data checklist, risk reporting and quick recommendations | Small businesses, few related transactions |
Standard Package | Analyze functions, choose pricing methods, prepare Local files | Medium enterprises, FDI have many transactions |
Comprehensive Package | Prepare Local/Master/CbCR (if needed), support explanation to tax authorities | Multinational corporations and enterprises |
Investment benefits:
the cost of using the filing service is often much lower than the cost of being charged, fined or having to adjust the books when being inspected. If you want to receive a specific quote according to the company's situation , please send the transaction scope and initial data for us to quote quickly .
Contact PMH now
Frequently Asked Questions (FAQ)
There are typically three main types: Local file, which details the company’s transactions and valuation rationale in each country; Master file, which summarizes group information; Country by Country report (CbCR) which reports the distribution of profits by country — depending on the size and affiliation, a business must create one or more of these types of files.
Subject to regulatory thresholds and conditions — if the total value or frequency of related-party transactions exceeds the threshold prescribed by the decree/circular, a registration must be made; otherwise, it may be exempted. Send us your transaction data for a free check to see if your business is in the cases where it must be made.
There are some cases that are exempted by regulations (for example, the enterprise does not have related-party transactions or transactions that do not exceed the prescribed threshold). However, “exemption” only applies when specific conditions are met — actual data needs to be checked to conclude.
Enterprises may be subject to administrative fines, tax arrears and late payment penalties if the tax authority determines that there are errors; the specific penalty level depends on the level of violation according to current regulations. Therefore, timely filing helps reduce the risk of having to pay additional taxes and fines.
Yes. We support businesses in preparing arguments and documents, participating in explanations and working with tax authorities as authorized or providing professional advice during the inspection/examination process.
Note:
consulting support services, document preparation and explanation — if you need a quote or representation to work with tax authorities, please provide the transaction scope and initial data so we can give you a detailed quote.