Vietnam’s APA breakthrough: 12 years in the making, now ready for takeoff
Nguyễn Trung Ngân, FCCA, CPA, MBA
Tax strategist at Deloitte Southeast Asia ӏ Transfer pricing expert ӏ Supporter for Aspiring Young Minds ӏ ACCA Advocate ӏ Happy writer
In the landscape of international taxation, few tools are as powerful and forward-looking as the Advance Pricing Agreement (APA). APAs allow multinational enterprises (MNEs) and tax authorities to agree in advance on the pricing principles for related-party transactions. In doing so, they reduce the risk of disputes, provide tax certainty, and minimize the chance of double taxation.
Vietnam introduced the APA mechanism in 2013, recognizing it as a global best practice for resolving transfer pricing issues in a cooperative and proactive manner. The potential was clear: a well-functioning APA framework would not only ease compliance for businesses but also signal Vietnam’s alignment with international tax norms.
But fast forward twelve years, and the reality has been more sobering. Despite having a regulatory framework in place and despite strong interest from foreign investors, Vietnam has not concluded a single APA case.
This long-standing gap between policy and practice is finally closing. In June 2025, Vietnam took a historic step forward with the issuance of Decree 122/2025/ND-CP, a reform that reshapes the country’s APA landscape and gives fresh momentum to a mechanism long overdue for revival.
📜 A quick recap: What is an APA?
An Advance Pricing Agreement (APA) is a formal arrangement between a taxpayer and one or more tax authorities that determines, in advance, the transfer pricing methodology for certain transactions over a fixed period. These agreements can be unilateral (with one tax authority), bilateral (with two), or multilateral (with three or more).
Globally, APAs are valued because they bring:
In Vietnam, APA rules were first introduced under Circular 201/2013/TT-BTC and the latest in Decree 126/2020/ND-CP. But in practice, Vietnam’s APA process has remained largely aspirational. Key obstacles included the lack of streamlined procedures, overlapping approval layers, and delayed decision-making.
🚀 The breakthrough: Decree 122/2025/ND-CP
Recognizing the need for reform, the government issued Decree 122 in June 2025, a milestone in Vietnam’s tax modernization journey.
The most groundbreaking provision? Full authority to approve and sign bilateral/multilateral APAs is now delegated to the Ministry of Finance. This eliminates the need to submit APA content to the Prime Minister and Government, drastically reducing approval timeline.
Now, the Ministry of Finance has the power to:
The Tax Department remains the primary technical and negotiation body, but it now operates in much closer alignment with decision-makers at MOF, fostering quicker internal coordination and stronger external negotiations.
🌐 International alignment: Learning from regional peers
Vietnam’s new approach under Decree 122 brings it in line with international practices. In fact, many developed countries have long recognized that decentralized and technically competent tax authorities are essential for a functional APA regime.
Examples include:
With Decree 122, Vietnam joins these jurisdictions in creating a responsive and technically empowered APA approval framework.
⏳ Transitional clarity: What happens to pending applications?
A particularly thoughtful aspect of Decree 122 is its transitional provision.
According to Article 9, any bilateral or multilateral APA applications submitted before July 1, 2025, which have not yet been submitted to the Prime Minister for approval, will now be handled directly by the Ministry of Finance.
This ensures procedural continuity and accelerates pending negotiations. It’s a clear message to businesses: If you’ve been waiting, now is your time.
📌 What this means for businesses
With barriers removed and new mechanisms in place, businesses now have an unprecedented opportunity to engage, or re-engage, with the APA process.
If you're a multinational operating in Vietnam, here’s what you should do next:
1. Reassess your APA readiness
Evaluate whether your intercompany transactions, especially those with recurring and material transfer pricing risks, would benefit from an APA.
2. Initiate early engagement with authorities
Early conversations help define scope, expectations, and methodologies. This is particularly important for bilateral or multilateral APAs, where timelines depend on coordination between two or more tax jurisdictions.
3. Prepare robust technical documentation
APA applications require a high level of technical rigor. This includes:
A clear, logical, and well-substantiated file will make a world of difference.
4. Stay informed and build relationships
The APA process is a marathon, not a sprint. Build consistent communication channels with the Tax Department. Monitor regulatory updates and provide timely feedback during the negotiation process.
5. Consult with trusted APA advisor
Navigating bilateral and multilateral APA discussions requires both local insight and global coordination. Engaging experienced professionals can ensure your APA application is technically sound, strategically aligned, and globally credible.
🌟 The Road Ahead: Vietnam’s first APA - closer than ever
The reform introduced in Decree 122 is expected to pave the way for Vietnam’s very first successfully concluded APA, a moment that would mark a major milestone in Vietnam’s tax administration history.
Several APA applications are already underway, and with decision-making now streamlined, both the authorities and businesses are hopeful that the first signed APA agreement will become a reality soon.
For Vietnam, this will do more than just check a regulatory box. It will:
✍️ Final thoughts: From policy to progress
It took over a decade to reach this point, but Vietnam’s APA journey is finally moving forward. Decree 122/2025/ND-CP represents a turning point not just in policy, but in intent.
It shows that Vietnam is listening, to businesses, to international partners, and to the growing need for modernization in cross-border tax matters.
As Vietnam embraces this new era of transparency and efficiency, businesses are encouraged to do the same. The APA mechanism is no longer a concept stuck in red tape, it’s a real, viable pathway to certainty, stability, and strategic advantage.
At Deloitte, we remain fully committed to helping our clients unlock the full value of APA in Vietnam - because when trust is built, everyone moves forward.