Important changes in Decree No. 122/2025/ND-CP on devolution and decentralization in tax administration

Decree No. 122/2025/ND-CP (“Decree 122”) was promulgated by the Government on June 11, 2025 and officially takes effect from July 01, 2025 until March 01, 2027, except for certain cases as provided in Clause 2 Article 10 of Decree 122. Accordingly, Decree 122 provides for devolution and decentralization in tax administration, clearly defining competence, order, procedures for performance of tasks and rights to handle between central and local state agencies. The objective is to promote devolution and decentralization, create flexibility and uniformity in order to ensure centralized administration by the Government, coordination in administration by relevant agencies in the spirit of administrative reform.

1.Regulations on devolution in the field of tax administration to the Minister of Finance

Pursuant to Clause 1, Clause 2, Clause 3, Clause 4 Article 3; Article 4; Article 5; Article 6 and the Annex attached to Decree 122, the Minister of Finance is responsible for providing guidance on the following contents:

• The case where taxpayers are not required to submit documents in tax declaration dossiers, tax payment dossiers, tax refund dossiers and other tax dossiers that state management agencies already have, based on the actual situation and conditions of information technology equipment as prescribed in Clause 11 Article 17 of the Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019 (“Law on Tax Administration”). However, up to now, the Minister of Finance has not yet issued a detailed guiding document to implement this content.
• Tax declaration dossiers; types of taxes declared monthly, quarterly, annually, upon each arising of tax liability, finalization declaration of taxes; declaration of amounts payable of fees and charges collected by representative missions of the Socialist Republic of Vietnam abroad; declaration, provision, exchange, use of information regarding the country-by-country profit report; criteria for determining taxpayers to declare tax quarterly as prescribed in Clause 8 Article 43 of the Law on Tax Administration. Accordingly, the above contents are implemented in accordance with Article 7, Article 8, Article 9, Article 12 of Decree No. 126/2020/ND-CP dated October 19, 2020 (“Decree 126”) and Clause 3, Clause 4, Clause 5 Article 1, Clause 1 Article 2 of Decree No. 91/2022/ND-CP dated October 30, 2022 (“Decree 91”) of the Government.
• The deadline for submission of tax declaration dossiers with respect to agricultural land use tax; non-agricultural land use tax; land use levy; land rent, water surface rent; mining right fee; water resource exploitation right fee; registration fee; license fee; revenues to the state budget as prescribed by the law on management and use of public assets; country-by-country profit report as prescribed in Clause 5 Article 44 of the Law on Tax Administration. Accordingly, the above contents are implemented in accordance with Article 10 of Decree 126.
• The place for submission of tax declaration dossiers with respect to taxpayers having multiple production and business activities; taxpayers conducting production and business in multiple locations; taxpayers incurring tax liabilities for taxes declared and paid upon each arising, revenues from land, mining right fee, water resource exploitation right fee, finalization of personal income tax; and taxpayers declaring tax through electronic transactions and other necessary cases as prescribed in Clause 4 Article 45 of the Law on Tax Administration. Accordingly, the above contents are implemented in accordance with Article 11 of Decree 126 and Clause 6 Article 1 of Decree 91.
• Procedures, dossiers, time limit for debt freezing with respect to cases eligible for debt freezing as prescribed in Clause 1 Article 84 of the Law on Tax Administration No. 38. Accordingly, the above contents are implemented in accordance with Article 23 of Decree 126.
• Services regarding e-invoices and the cases of using e-invoices with codes of tax authorities free of charge, cases of using e-invoices with codes of tax authorities subject to service charges, cases of using e-invoices without codes of tax authorities through e-invoice service providers as prescribed in Clause 3 Article 92 of the Law on Tax Administration. Accordingly, the above contents are implemented in accordance with Decree No. 123/2020/ND-CP dated October 19, 2020 and Decree No. 70/2025/ND-CP dated March 20, 2025 of the Government.

In addition, the Minister of Finance has the competence to decide on tax debt write-off with respect to enterprises, cooperatives falling into the cases specified in Clause 3 Article 85 of the Law on Tax Administration that have tax arrears, late payment interest, fines of VND 15,000,000,000 or more as prescribed in Clause 4 Article 87 of the Law on Tax Administration. The order and procedures for implementation of this content are provided in Clause 2 Article 5 of Decree 122.

2.Regulations on decentralization in the field of tax administration

Another outstanding point of Decree 122 is the more specific regulation on the application of the Advance Pricing Agreement (APA) mechanism regarding the determination of taxable prices for enterprises having related-party transactions. Previously, APA was mainly handled by central tax authorities, leading to overload and prolonged negotiation time. The new Decree has decentralized part of the competence to local tax authorities, accompanied by a mechanism of coordination and close supervision from the central level. This helps shorten the processing time, creating proactivity for enterprises when carrying out related-party transactions.

According to Clause 5 Article 41 of Decree No. 126, the mechanism for concluding bilateral and multilateral APAs with the participation of foreign tax authorities required the participation of the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Justice and relevant agencies, as well as submission to the Government and the Prime Minister for opinions on conclusion. However, under Clause 1 Article 8 of Decree 122, the Minister of Finance is the competent authority to give opinions and decide on the conclusion of APA contents. In addition, the Minister of Finance directly exercises the competence to decide on the effective date of bilateral or multilateral APAs in accordance with Clause 7 Article 41 of Decree 126 without having to report to the Government for consideration and decision as under the previous regulations.

The new regulation in Article 8 of Decree 122 has changed in the direction of simplification and concentration of competence. Instead of going through the process of collecting opinions from multiple ministries and agencies and obtaining opinions from the Government and the Prime Minister, the Minister of Finance is now vested with the authority to directly give opinions and decide on the conclusion of bilateral and multilateral APAs with the participation of foreign tax authorities. This change helps streamline procedures, shorten time, increase the proactivity and responsibility of the Ministry of Finance and at the same time improve efficiency and flexibility in implementing the APA mechanism.

The above is a summary of the important changes of Decree No. 122/2025/ND-CP on devolution and decentralization in the field of tax administration. Hopefully, this article provides you with an overview, thereby ensuring compliance with the law.

Best regards,