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Vietnam Double Taxation Agreements

Consequently, the conditions and procedures for the application of the DTA were not uniform throughout the country and depended to a large extent on the interpretation of the tax authority of the respective State. This can be seen as the biggest obstacle that foreign entrepreneurs face when approaching and using this instrument to eliminate double taxation. Due to the lack of regular advice from the high-level tax authorities, the lack of experience in the administration of the DTA made the process of streamlining the DTA long and associated with a lot of paperwork. A notice of application for tax exemption under a double taxation treaty may need to be submitted to the Vietnamese tax administration at the beginning of the shipment to Vietnam and during each calendar year. The material for this article is taken from the October 2011 issue of Vietnam Briefing Magazine entitled “Vietnam`s International Taxation Agreements”, which is available as a PDF download from the Asia Briefing library. In this issue, we present Vietnam`s Free Trade Agreement and the importance of avoiding double taxation for Vietnamese investments. It is therefore interesting for foreign investors to be aware of the existing double taxation treaties (DTAs) between Vietnam and various countries and the application of these agreements. These agreements effectively eliminate double taxation by establishing exemptions or reducing the amount of taxes payable in Vietnam. Residents of countries that have a DBAA with Vietnam and earn income in Vietnam must pay income taxes that are subject to Vietnamese income tax laws. However, these residents can be exempt from tax if they meet all of the following conditions: In the context of the current rapid growth of global trade, tax treaties play a key role in promoting international cooperation by eliminating or reducing double taxation of cross-border income. Vietnam has concluded more than 80 double taxation treaties (DTAs) with other countries to avoid double taxation.

Access to a library of resources on Vietnam`s current trade agreements, including DTAs and bilateral investment treaties, can be found here. May 16 – When it comes to international trade, the tax systems of different countries often put global investors in the tricky position of being faced with redundant taxes on their income – that is, double taxes. For example, a company may be subject to taxes in its country of residence and also in countries where it derives income from foreign investment for the supply of goods and services. In addition to Vietnam`s national agreements, which provide for international double taxation relief, Vietnam has concluded double taxation agreements with more than 70 countries/jurisdictions to prevent double taxation and enable cooperation between Vietnam and foreign tax authorities in the enforcement of their respective tax laws. This is not an automatic process. Foreign workers can apply for tax protection under a double taxation agreement (DTA), provided that there is an effective DTA between their home country and Vietnam. Valerie Teo and Nguyen Tan Tai of Grant Thornton Vietnam discuss the tax implications and possible application of double taxation treaties with respect to the supply of goods and services in Vietnam. Valerie Teo and Nguyen Tan Tai of Grant Thornton Vietnam discuss the tax implications for foreigners of working in Vietnam and the tax protection available under a double taxation treaty.

In the event of any contradiction between the DTA and local tax laws, the provisions of the DTA shall prevail. However, if the relevant tax obligations set out in the DTA do not exist in Vietnam or if the DTA requires taxation at rates higher than local tax rates, local laws prevail. If a term is not defined in a DBA, it is interpreted as defined by local laws. For more information or to contact the company, please email, visit or download the company brochure. From the U.S. perspective, the Protocol states that any interest rates occurring in the United States that are not considered portfolio interest under U.S. law fall under Section 11, clause 4 […].

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