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. 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. 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. For more information or to contact the company, please email vietnam@dezshira.com, see www.dezshira.com or download the company brochure. 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. 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. 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. 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 from tax if they meet all the following conditions: income from the provision of independent services is also subject to corporation tax and foreign persons who thus receive income must pay the corresponding income taxes. When individuals or businesses provide independent services without a commercial license, they are also required to pay personal income taxes.
