Reforming Advance Pricing Agreements in Vietnam: Implications for Tax Governance Efficiency

Le Thi Thao

doi:10.28932/di.v18i1.15138

Authors

Le Thi Thao University of Law, Hue University

DOI:

https://doi.org/10.28932/di.v18i1.15138

Keywords:

Advance Pricing Agreements, Tax Governance, Vietnam

Abstract

Advance Pricing Agreements (APAs) have increasingly been adopted as a key instrument to reduce transfer pricing disputes and enhance certainty in cross-border taxation. While APA systems are well established in many OECD jurisdictions, their institutional design and practical implementation in emerging economies such as Vietnam remain underdeveloped and uneven. Despite a growing body of literature on APAs, limited attention has been paid to institutionally grounded analyses of APA reforms in emerging economies, particularly in relation to their implications for tax governance. This article examines the recent reform of Vietnam’s APA framework under Decree No. 122/2025/NĐ-CP and evaluates its implications for tax governance efficiency in the context of the global economy. The study adopts a qualitative doctrinal legal approach, combined with comparative analysis against OECD standards, drawing on both primary legal sources and secondary literature. The findings suggest that the reform reflects a shift towards a more cooperative and administratively flexible model of tax governance, particularly through the reallocation of decision-making authority and procedural adjustments in bilateral and multilateral APAs. However, its effectiveness remains constrained by challenges relating to administrative capacity, inter-agency coordination, and institutional accountability. This study contributes to the literature by linking legal reform with governance performance in emerging tax systems and highlights the importance of strengthening institutional capacity and transparency to ensure the effective operation of APA mechanisms.

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Laws and Regulations