Compliance of documentation transfer pricing requirements in foreign direct investment enterprises in Vietnam

Abstract

The increase of inter-boundary transactions brings a number of benefits for enterprises. However, even when benefits of transfer pricing are evident, multinational organizations still face legal challenges, including performing parts of transactions in another jurisdiction and motives of tax officials in investigating transfer pricing. This is especially true when countries do not want to lose benefits from tax collection. Therefore, many countries and organizations such as the Organization for Economic Cooperation and Development (OECD), Pacific Association of Tax Administrators (PATA), the European Union (EU), and Vietnam have introduced requirements for transfer pricing documentation to prevent transfer pricing manipulation and maintain benefits from taxes. The aim of this research was to assess the compliance of those requirements of foreign direct investment (FDI) enterprises in Vietnam. This article which is a summary of our research includes the following sections: (1) OECD guidelines of transfer pricing documentation; (2) Vietnam regulations of transfer pricing documentation; (3) results of the research; and (4) discussion and conclusion