Decree No. 20/2025/ND-CP amending and supplementing several articles of Decree No. 132/2020/ND-CP on tax administration for enterprises engaged in related-party transactions, will take effect on March 27, 2025, and will apply to the finalization of corporate income tax (CIT) of 2024. 
A key change in Decree No. 20/2025/ND-CP is the amendment of the regulations on the criteria for determining “related-party” in case an enterprise provides loans or guarantees to another enterprise, as follows:
“d) An enterprise that guarantees or grants a loan to another enterprise in any manner (including loans from third parties secured by the financial resources of the affiliates and financial transactions of a similar nature) shall be deemed a related-party if the total outstanding loan balance between the debtor enterprise and the lender or guarantor enterprise is at least 25% of the owner’s charter capital of the debtor enterprise and accounts for more than 50% of the total outstanding balance of all medium- and long-term debts of the debtor enterprise.”
Currently, under Decree No. 132/2020/ND-CP, a loan or guarantee transaction between enterprises is classified as a related-party transaction if the loan: (i) is at least 25% of the owner’s charter capital; and (ii) accounts for more than 50% of the total medium- and long-term debts of the debtor enterprise; and (iii) is determined based on the value of each individual transaction.
As of March 27, 2025, under Decree No. 20/2025/ND-CP, if the total outstanding loan balance between the debtor enterprise and the lender or guarantor enterprise meets the above conditions, then both entities will be classified as “related-party.”
It is important to note that Decree No. 20/2025/ND-CP will apply to the finalization of corporate income tax (CIT) of 2024. This amendment may result in certain challenges for enterprises in reviewing and restructuring internal loan and guarantee within their corporate structure.
