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 conditions: VISIT: www.vietnamlaws.xyz; 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. 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. Access to a library of resources from Vietnam`s current trade agreements, including DBAs and bilateral investment agreements, is available here. 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. On July 7, 2015, the United States and Vietnam signed an income tax agreement with Vietnam, the first between the two countries. The Double Taxation Convention applies to income and corporate tax in the case of Vietnam. What is an establishment? Under the double taxation agreement, a corporation is considered a stable institution when its activities are carried out in whole or in part by a fixed location. The facility does not include: 1) the use of facilities exclusively for the purpose of storing, issuing or delivering goods or goods owned by the company; (2) maintaining a stock of goods or goods owned by the company exclusively for storage, exhibition or delivery; 3) maintaining a stock of goods or goods owned by the company exclusively for processing by another company; (4) maintaining a fixed place of activity exclusively for the purpose of purchasing goods or goods or gathering information for the company; 5) maintaining a fixed place of activity exclusively for the purpose of carrying out other preparatory or ancillary activities for the company; and (6) the maintenance of a fixed place of business only for any combination of activities covered in paragraphs 1 to 5, provided that the overall activity of the fixed place of activity resulting from this combination is preparatory or auxiliary.