Double Taxation Agreement With Vietnam

The provisions of this paragraph do not affect the corporation`s taxation on the profits on which the dividends are paid. DTAAs apply to individuals as well as businesses living in Vietnam, citizens of the country with which Vietnam has signed a DTAA or both. At the time of the signing of the agreement between the Government of Canada and the Government of the Socialist Republic of Vietnam to avoid double taxation and prevent income tax evasion, the signatories agreed that the following provisions are an integral part of the convention. Residents of countries that have signed DBAAs with Vietnam are subject to the corresponding taxes in their country of origin. A person is considered a resident if he owns a dwelling, if he has been in the country for a certain period of time or if he meets other relevant criteria. by a company that operates mainly in the same sector and is based in Vietnam, the payment is considered to be paid up to 10% of the gross amount of the payment. The provisions of this paragraph apply for the first five years for which the agreement is effective, but the competent authorities of the contracting states can consult with each other to determine whether this period is extended. If there is a direct conflict between national tax laws and the tax provisions of a DBAA, they will predominate in the DBAA. However, national tax legislation prevails when the tax obligations contained in the DBAA do not exist in Vietnam or when the tax rates of the agreement are higher than national rates. For example, if a signatory country has the right to impose a tax that does not recognize Vietnam, then Vietnamese tax laws apply. You can stay abreast of the latest business and investment trends across Vietnam by subscribe to Asia Briefing`s free update service with news, commentary, guides and multimedia resources. It is therefore extremely interesting for foreign investors to be aware of the existing double taxation prevention agreements (DBAA) between Vietnam and different countries, as well as the implementation of these agreements.

These contracts effectively eliminate double taxation by imposing exemptions or reducing taxes liability in Vietnam. May 16 – In international trade, the tax systems of individual countries often place global investors at a disadvantage to expect redundant taxes on their income, i.e. double taxes. For example, a company may be taxed in its country of residence and in countries where it generates income through foreign investment in the provision of goods and services. Investors whose PEs are authorized to trade in Vietnam are subject to Vietnam`s corporate tax laws. Those who conduct transactions under a contract with Vietnamese organizations or individuals are taxed in accordance with the laws of the foreign contractor`s country of origin. The material for this article is taken from the October 2011 issue of Vietnam Briefing Magazine entitled “Vietnam`s International Taxation Agreements,” available for PDF download in asia Briefing Bookstore. In this issue, we insert Vietnam`s free trade agreements and the importance of avoiding double taxation for Vietnam`s investments. Personal income Residents of countries with a DTAA with Vietnam who earn income in Vietnam are required to pay income taxes in accordance with Vietnamese income tax legislation.

However, these residents may be exempt if they meet all the following requirements: access to a library of resources from current Vietnamese trade agreements, including DBAs and bilateral investment agreements, see here.