Circular 205/2013/tt-Btc: Guidelines For Implementation Of Agreements To Avoid Double Taxation And Prevent Tax Evasion With Respect To Taxes On Income And Property Between Vietnam And Countries.

Original Language Title: Thông tư 205/2013/TT-BTC: Hướng dẫn thực hiện Hiệp định tránh đánh thuế hai lần và ngăn ngừa việc trốn lậu thuế đối với loại thuế đánh vào thu nhập và tài sản giữa Việt Nam với các nước v...

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$20 per month, or Get a Day Pass for only USD$4.99.
 
CIRCULAR instructions the basic content of the agreement on avoiding double taxation and prevent tax evasion with respect to taxes on income and property between Vietnam and countries and territories have effective enforcement in Vietnam _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ the base text of the current law on enterprise income tax , the personal income tax;
Pursuant to the law signing, joining and implementing international treaties No. 41/2005/QH11 on 14/6/2005;
Pursuant to the agreement on avoiding double taxation and prevention of evasion with respect to taxes on income and property between Vietnam and countries and territories are enforceable;
Pursuant to Decree No. 118/2008/ND-CP of the Government functions, tasks, powers and organizational structure of the Ministry of finance;
At the suggestion of the General Director of the tax Bureau;
The Minister of Finance issued a circular guiding the basic content of the agreement on avoiding double taxation and prevent tax evasion with respect to taxes on income and property between Vietnam and countries and territories (hereinafter referred to as countries or water depending on the context) effective enforcement in Vietnam (hereinafter referred as the agreement).
Chapter I GENERAL PROVISIONS section 1 OBJECT and SCOPE article 1. The object of this circular applies to adjust the object is the object of their residence or Vietnam signed the agreement with Vietnam or as the object of Vietnam and the country signed the agreement with Vietnam.
1. Under the agreement, the term "resident of a Country object to sign" is object that under the law of a Contracting Country is taxable in that country objects by: 1.1. There are houses, have time to reside in that country or the method of analogy in the case of the object it is an individual; or 1.2. Headquarters, headquarters to register, or to be established in that country or the formula has the same properties in the case of the object it is an organization; or 1.3. This term also includes the State or local authorities of the country which, in the case of treaty provisions.
2. Under the provisions of tax laws in Vietnam, the following objects are considered to be the object of Vietnam: 2.1. Individuals who meet one of the following conditions: a) in Vietnam from 183 days or more in a calendar year or during the 12 consecutive months since the first day in Vietnam;
Individuals present in Vietnam under the provisions of this point is the presence of that individual on the territory of Vietnam;
b) Have regular residence in Vietnam in one of two situations:-Have registered permanent residence in accordance with the law on residence;
-Home rent to stay in Vietnam under the provisions of the law on housing, with the term of the lease from 183 days or more during the tax year.
Individual cases have regular residence in Vietnam according to the rules at this point but the reality in Vietnam under 183 days in the tax year in which the individual did not prove to be the object of any residence that individual is subject to residence in Vietnam.
Example 1: in 2010, a Japanese expert to work in Vietnam in the past 10 months. Two months of the year (June and December) this expert on family visits allowed. In 2009, expert living and working in Japan and in Japanese tax calculation from 1/4 to 31/3 years later. So, in 2010, by the Japanese specialist have worked mainly in Vietnam and often live in Vietnam, although experts still have houses and families in Japan and Japanese nationals, experts are still considered a resident of Vietnam objects for tax purposes. (The provisions of article 4, paragraph b, the agreement between Vietnam and Japan). However, in the period from 01/01/2010 to 30/3/2010, experts regarded as the object of a Japanese resident for tax purposes in Vietnam and Japan. 2.2. The institutions established and functioning according to the law in Vietnam.
3. where pursuant to the provisions of paragraphs 1 and 2 of this Article, if an object is the object of Vietnam just as objects of the country signed the agreement with Vietnam, the residency of the object which is defined as follows: 3.1. For individuals: based on the formula in order of preference below to identify an individual who is the subject of Vietnam: a) If that individual has permanent housing in Vietnam (home owned or rented homes or houses in the right use of it);
b) If that individual has permanent housing in both countries but that individual economic relationship more closely in Vietnam such as: employment; There are places of business; where personal property management; or have personal relationships more closely in Vietnam like family relationships (relatives as father, mother, spouse, children, etc.), social (social unions members, professional associations, etc.);
c) If not determined individuals that have economic relations, personal relationships in the country would more closely or if that individual does not have permanent housing in the country, but that individual has the time to be present in Vietnam more than the tax year;
d) If that individual regularly in both Vietnam and the country signed the agreement with Vietnam as well as the absence of regularly in both countries but that individual Vietnam or citizenship is defined as the population of Vietnam under the principle of effective nationality Vietnam;
DD) If that individual has just recently Vietnam citizenship, citizenship, the country signed the agreement with Vietnam or not citizenship, both countries, the competent authorities of Vietnam will solve this problem through a bilateral agreement procedure with the competent authorities of the country signed the agreement with Vietnam.
3.2. for an object is not the individual: depending on the specific rules in each agreement to identify an object is not the individual who is the subject of Vietnam. In the agreements often stipulated the following: a) If it is established or registered to operate in Vietnam, the object that is the object of Vietnam; or b) If that object is headquartered in Vietnam, the object that is the object of Vietnam; or c) If object that contains the actual operating headquarters in Vietnam, then that object is considered the subject of Vietnam (actual operating headquarters is usually where senior officers or the Board of Directors of the business conduct of the meeting, examine, discuss and devise the management decisions or decide on manufactures , the business of business or the place where the most important accounting books are kept); or d) object instances which established or registered in both countries or headquarters, or the actual operating headquarters in both countries, the competent authorities of Vietnam and the competent authorities of the country signed the agreement with Vietnam will determine which object is the only object of residence of one of the two countries through the procedure of licensing agreements the bilateral agreement. The case of the two countries signed a general agreement is not reached, objects which are not considered tax resident object of any country for the purpose of applying the agreement.
The regulations on residence objects as outlined in terms of objects reside (usually the article 4) of the Treaty.
Article 2. The taxes applicable taxes apply in the Treaty is the kind of tax on income and property are specified in each agreement.
1. In the case of Vietnam, the taxes in the scope of application of the agreement are: a) enterprise income tax; and b) personal income tax.
2. In the case of countries that signed the agreement with Vietnam, the taxes applied the agreement are specified in article 2 of the Convention (paragraph 3 of article 2 usually).
Example 2: in article 2, paragraph 3, point b) agreements between Vietnam and water N regulations as follows: "3. The existing taxes to be applied in the agreement are: ... b) In water N: i) the income tax;
II) corporate tax; and iii) the residence of the local taxes on income. "
As specified above, a case of local N have a resident Guest local taxes on the income of the resident objects and non-residents of the country, local residence taxes on income that would belong to the scope of application of the agreement between Vietnam and the country n. Article 3. Waivers for members of diplomatic missions, consular agency according to the agreement, the provisions of the agreement will not affect the exemption of members of diplomatic missions, consular agency is prescribed in the international treaties to which the Socialist Republic of Vietnam signed or joined.
Regulation of immunity with respect to the members of diplomatic missions, consular agency as outlined in the terms of the members of diplomatic missions and consular agency (usually the article 27) of the agreement.
Section 2 PRINCIPLES of APPLICATION of the CONVENTION article 4. The principle of applying the agreement when applying for tax processing, each case must be based on the provisions of each agreement (including Protocol and/or Exchange if available).
Article 5. Apply the agreement, tax law and other relevant laws 1. The event of a discrepancy between the provisions of the Treaty and the provisions of the domestic tax laws will apply according to the rules of the Treaty.
2. The Convention does not create new obligations, or heavier than the domestic tax law. In case the agreement contains the rules under which Vietnam has the right to collect tax in respect of a type of income or tax collectors with a fixed tax rate but the current law on taxation in Vietnam does not yet have tax rules for income or revenue rules with a lower tax rate shall apply in accordance with the current law on taxation in Vietnam, meaning not collect taxes or collect taxes with lower tax rates.

3. When Vietnam implemented the provisions of the agreement, if the term has not been defined in the Treaty, then the term has not been defined will have the meaning as defined in the laws of Vietnam for tax purposes at that time. For a term not defined in the Treaty and has not yet been defined or to be defined at the same time the law of Vietnam and the signing of agreements with Vietnam, the competent authorities of the two countries will make solving the problem through a bilateral agreement procedure. For a time the term was defined in tax law and other laws, as defined in the tax law would be applied to implement the agreement.
Article 6. Some cases refused to apply the agreement on the basis of the principle of benefiting the agreement unless otherwise specified in the agreement of limited benefit, tax authorities agreement Vietnam will reject the proposal to apply the Treaty in the following cases: 1. Who suggested the proposal to apply the Convention in respect of the tax have arisen too three years ago suggested pressure point use of the agreement.
Example 3: in the period from 2006 to 2012, Enterprise V Vietnam's annual income from royalty in Ma-lai-xi-a and every year are already filed taxes in Ma-lai-xi-a as defined in the agreement between Vietnam and Ma-a hybrid. On 01/10/2012, enterprise application to V recommended tax deductible according to agreements between Vietnam and Ma-lai-xi-a for the whole of the tax already paid in Ma-lai-xi-a in the period from 2006 to 2012. In this case, the tax authorities consider only Vietnam in Vietnam tax deduction for amounts already paid for the tax incurred in Ma-lai-xi-a 3-year period from 01/10/2009 to 01/10/2011.
2. When the main purpose of the contract or the agreement is to enjoy tax reduction or exemption under the agreement.
3. The proposed application of the Treaty is not the real owner of the account number to which the income taxes relate to income that was suggested long, falling under the Treaty. The real owner is entitled may be an individual, a company or an organisation but must be the object of ownership and control for income, property, or the right to generate income. When considering to determine an object's real owner is a person entitled, tax authorities will look at all the factors and circumstances related to that object on the basis of the principle of "nature decided to form" because the aim of the agreement is to avoid double taxation and prevent tax evasion. In the following cases, an object will not be considered a real owners enjoy: a) When the proposal is a non-resident is obliged to distribute more than 50% of his income to an audience of residence of third country within 12 months from the receipt of income;
b) When people suggest is a non-resident objects have no (or almost no) any business activities except for the ownership of the property or the right to generate income;
c) When people suggest is a non-resident subjects of business activity, but the amount of assets, business scale, or the number of employees with income received;
Example 4: a Bank of one country do not have agreement with Vietnam to establish a legal entity in France to conduct lending in Vietnam and proposed tax exemption for interest on borrowed money arising in Vietnam according to the tax treaty between Vietnam and France. In this case, to determine the entity in France are eligible apply whether or not the agreement, Vietnam will tax bodies based on the amount of money lenders, the capacity of the legal person in France (the number and qualification of staff, property and other infrastructure) to determine relative income and size of the business of the entity. If this legal income obtained is very large, while the French only have an Office in France with a few employees, the proposed application of the Treaty will be rejected.
d) when a proposal is a non-resident has no (or almost no) control or dispose and do not have to suffer or incur very little risk for income, or property or the rights to generate income;
DD) When the loan agreement or copyright or the supply of services between the proposal is a non-resident subjects and objects in Vietnam including the terms and conditions of an agreement that the proposal are with a third party, but in agreement that other people suggest is the recipient of the loan , copyright or technical service;
e) When people suggest is an object of a country or territory do not collect income tax or income tax with tax rate low (below 10%) not with the reasons investment incentives are provided for in the Convention; g) When the recommended agent is a person, a Corporation (except a dealer , an intermediary company that proposed the application of the Convention under the authorization of an owner actually enjoys).
An intermediary agent or a company is a company established in a Contracting Country just to have a legal form exists only for the purpose of avoiding or reducing taxes or turning a profit without engaging in business activities such as the production of commercial, or provide the service.
Article 7. Complaints procedure under the complaints procedure under the Convention are outlined in the terms of a bilateral agreement procedure (usually 25) of the agreement.
1. With regard to the objects of the country signed the agreement with Vietnam 1.1. The case of an object of the signing Countries (hereinafter in this article referred to as the complainant) Vietnam tax agency that determines its tax obligations is inconsistent with the provisions of the Treaty, that object can complain in the sequence specified by tax laws or writing about complaints of Vietnam.
1.2. The complainant may not proceed with a complaint under the order referred to in Point 1.1 above that directly appeal to the competent authorities of Vietnam stipulates in article 51 of this circular or the competent authorities of the countries where the complainant is tax resident objects to expedite the process of the bilateral agreement, the procedure prescribed in the Treaty given. In this case, the complaint must be conducted within three years from the date of the first notice of tax authorities led to the disposal of tax which the complainant for is not true with the agreement.
Example 5:01/6/2011, Mr. A, a resident of water object signed the agreement with Vietnam received the decision about processing of personal income tax Tax the H and he said that tax obligations recorded in the decision dealt improperly with the tax provisions of the agreement. After the full implementation of the obligations stated in the decision of tax processing, he has A right to complain directly to the General Department of taxation-as the competent authorities of Vietnam-to solve his case. The time limit so he can conduct A filed complaint is 3 years from the date 1/6/2011.
1.3. To proceed with the complaint under the provisions of this Clause 1.1 and 1.2 points, the complainant must comply the provisions below: a) to fulfill the obligations that have been reported in the decision for tax processing (is the decision of the tax administration, tax notices, ...) of tax authorities before and during the claims process. Complaints about the amount of tax due to the tax administration computer or assign, the complainant must submit sufficient amount of tax that, except where the competent State authorities decided to temporarily suspend implementation of tax decision, decided to assign tax of the tax administration.
b) the competent authorities of Vietnam do not resolve a complaint with respect to cases: grievance is or has been the courts resolve; or is or has been processed in order to resolve complaints of Vietnam; or the complaint was too the time limit prescribed in point 1.2.
2. for the objects resident of Vietnam where a resident of Vietnam audience that a Country signed determine his tax obligations is inconsistent with the provisions of the agreement the object of which might suggest that the competent authorities of Vietnam promote the process of bilateral agreements under the procedure stipulated in the agreement. The proposal before the competent authorities of Vietnam promote the process of bilateral agreement procedure, the complainant must fulfill the obligations have been reported in the tax-processing decisions of tax authorities and Vietnam signed the agreement with Vietnam if the law of that country's request. The proposal the competent authorities of Vietnam conducted bilateral agreement procedure must be conducted within three years from the date the country signed the agreement with Vietnam issued the decision to tax that treats the subject of Vietnam that is inconsistent with the provisions of the agreement.
Chapter II the INCOME TAXES section 1 INCOME FROM REAL PROPERTY article 8. The definition of real property as defined in the agreement, the term shall mean property under the law of the country where the signing property and includes extra assets attached property, cattle and equipment used in agriculture and forestry, the benefits are applied according to the law of the land , the right to use property, are entitled to payments paid to the exploitation or the right to exploit natural resources. The types of ships, boats, planes are not considered real estate.
Specifically, in the case of Vietnam, the property consists of:-The type of the property is specified in the definition of real property under the provisions of the civil code and the law on the real estate business;
-The extra property attached property mentioned above;
-Cattle and equipment used in agriculture and forestry;
-The benefits are applied according to the provisions of the law on land in Vietnam;
-Are entitled to payments paid to the exploitation or the right to exploit natural resources.

Example 6: an object residing abroad will be considered to have real estate in Vietnam if the object that owns the property not relocating are in Vietnam such as housing, construction works associated with doses of land, including property affixed to houses, buildings that , or the right to use land in Vietnam (under article 174: property and estate of the Civil Code) and if that object has a herd of cattle in Vietnam are directly related to the right to use this land then herd it also considered property in Vietnam.
Article 9. Determine tax obligations for income from real property as defined in the agreement, all kinds of revenue due to a resident of the country object signed the agreement with Vietnam obtained from the direct use, exploitation or the type of rental property in Vietnam including all of the business or property of independent practitioners, the income tax payable in Vietnam under the provisions of the current law on taxation in Vietnam.
Example 7: A Vietnamese X is an object of Beautiful Singapore owns a house in Vietnam and used that House with the purpose of renting. Income from the rental of this House will be subject to income tax in Vietnam though the person is not present in Vietnam during the tax period.
The tax rules for income from real property as outlined in the terms of the income from the property (usually the article 6) of the Treaty.
Section 2 of the INCOME FROM BUSINESS ACTIVITIES in article 10. The definition of income from business activities as defined in the agreement, the income from operations as income of the enterprises of the country signed the agreement with Vietnam (hereinafter referred to as foreign businesses), business activities in Vietnam, did not include the earnings listed in section 1 , and items from category 3 to Category 17 Chapter II, of this circular.
Article 11. Determine tax obligations for income from business activities 1. The case of foreign business operations in manufacturing, business in Vietnam but not to establish legal entities in Vietnam.
1.1. tax obligations as stipulated in the agreement, the income from operations of foreign enterprises are only taxed in Vietnam if the business has a permanent base in Vietnam and that income directly or indirectly related to permanent establishments. In this case it is only taxed in Vietnam on the income allocated to permanent establishments.
1.2. Definition of permanent establishments 1.2.1. As stipulated in the agreement, "permanent base" is a fixed business premises of a business, through which, the business done in whole or part of its business activities.
A business of signing Countries are considered to have permanent establishments in Vietnam meet the three conditions below: a) maintain in Vietnam a "base" as a building, an Office or a part of the building or the Office that, a means or equipment, etc.; and b) this basis fixed in nature, that is to be set up in a location identification and/or maintained regularly. Fixed calculation of business establishments do not necessarily depend on the basis that must be associated with a specific geographic location within a certain time length; and c) conducted business in whole or in part of business activities through this facility.
Example 8: Company X of China opened a booth at a Tet Vietnam's markets, through this booth the company X sells the goods at the fair. Meanwhile, this booth will be considered permanent establishments of the company X in Vietnam.
1.2.2. A business of a Water sign will be considered to conduct business activity through a permanent base in Vietnam in the case mainly on the following: a) enterprises that have in Vietnam: Headquarters, branches (such as law firms, branch to branch offices abroad , tobacco companies branch, branch banking, ...), offices (including the Office of trade representative if there are negotiations, trade Contracting), plant, factory, mine, oil well or gas, storage and delivery of goods, location of exploration or exploitation of natural resources, or have the equipment the media, for the exploration of natural resources exploitation in Vietnam.
Example 9: A foreign subcontractors use means, equipment and workers involved in oil and gas exploration drilling activities in Vietnam would be considered conduct business activity through a permanent base in Vietnam.
b) that business in Vietnam a building, a construction, installation or Assembly, or to conduct monitoring activities related to the construction location, building construction, installation or Assembly of the said condition of the location, the work or supervision activities that last longer than 6 months or 3 months (depending on the particular agreement) in Vietnam.
Location, construction or installation including locations, buildings, homes, roads, bridges, pipeline installation, excavation, dredging rivers, ... Time (6 months or 3 months) is calculated from the date the contractor started work preparing for construction work in Vietnam, such as the establishment of office building construction plans, until the finishing works, the whole console in Vietnam, including the time the work was interrupted due to all causes.
The subcontractors of the countries involved in the construction, installation or Assembly listed above are also considered conducting business activities in Vietnam through permanent establishments meet the conditions in point 1.2.1 above.
Duration of works to determine the permanent basis for major contractors include total time to perform the part of the contract of subcontractors and the duration of the main contractor.
Example 10: a Z Japanese companies bidding to build a bridge in Vietnam. Bridge construction activities take place as follows: the construction of piers by a sub-contractor Y is also a corporate Japan and 3 months of construction and bridge deck due to the Z order contractors. In this case, according to the provisions of article 5, paragraph 3, of the Treaty between Vietnam and Japan, company Z is considered to conduct business activities in Vietnam through a permanent facility because of the bridge construction time is 8 months (5 months + 3 months); The Company Y were not deemed to have a permanent base in Vietnam.
c) business that make the provision of services including consultancy services in Vietnam through employees of the business or an object other than the condition of the aforementioned service activities in a project or projects concerned, stretching in Vietnam during a period or periods of time combined too 183 days during each 12-month period.
Example 11: the aircraft maker DD of Sweden contracted aircraft maintenance services with Vietnam Airlines. According to the contract, in the period from 1 June 2010 to June 30, 2011, the DD sent technical experts delegation to Vietnam to work with total time in Vietnam on 190. In this case, as specified in paragraph 4, article 5, of the Treaty between Vietnam and Sweden, DD was deemed to have a permanent base in Vietnam due to the technical expert group was working in Vietnam exceeds 6 months in a 12 month period.
Example 12: N consulting company of Japan signed the contract for consultancy services with the owner of the project to build the power plant V in Vietnam as follows: i) consulting service contracts to build four power plants, from 1/8/2010 to 30/11/2010 , and ii) Advisory service contract generator system installation lasted 3 months from 01/01/2011 to 31/3/2011. Both the contract requires the presence of company representative advise N in the construction and installation of the power plant V to implement the work during the term of the contract. To perform consulting services contract installation of power plants, consulting company N has hired a consulting company B of Japan made as a representative for the company. In this case, as specified in paragraph 4, article 5, of the Treaty between Vietnam and Japan, N consulting company is considered resident establishments in Vietnam due to the presence of company representatives at project in Vietnam exceeds 6 months in a 12 month period; Consulting company B cannot be deemed to have a permanent base in Vietnam due to the presence of the company in Vietnam do not exceed 6 months.
Example 13: With the assumptions such as for example 12, if the B consulting firm and the investor of the project is also to sign an agreement in the period running from 1/4/2011 to 30/7/2011. The contract also requires the representative of advisory firm B is present throughout the duration of the contract performed test run the power plant V. In this instance, as specified in paragraph 4, article 5, of the Treaty between Vietnam and Japan, B consulting company is considered resident establishments in Vietnam due to the presence of company representative in the intallation Male in excess of 6 months within the 12-month period.
Related to the provision of the service, although in the agreement have stipulated permanent establishments including the provision of services including consultancy services in Vietnam through employees of the business or an object other than the condition of the aforementioned service activities in a project or projects concerned in Vietnam, which lasted for a period of time or multiple pooled time too 183 days during each 12-month period, but due to the nature of the service, time service providers do not extend beyond 6 months in a 12 month period, meanwhile, three conditions on permanent basis in point 1.2.1 above still satisfies the provided services are still considered There is a permanent base in Vietnam.

Example 14: a VND aircraft maker of Sweden signed a periodic maintenance services with Vietnam Airlines in two years time. According to the contract, every year, the airline sent both expert group DD techniques to Vietnam to work with total time in Vietnam at the 90-day aircraft maintenance. In this case, according to the provisions in clause 1, article 5, of the Treaty between Vietnam and Sweden, DD was deemed to have a permanent base in Vietnam due to the annually recurring technical expert group was working in Vietnam at a fixed location in Vietnam (the aircraft maintenance).
d) that business in Vietnam a broker dealer, Commission agent or any other agent, if the dealers that spent the whole or the greater part of its activities for the business (agents).
Example 15: V is the object of Vietnam signed a contract agent with function of storage and delivery of paint products for a company H is the object of his residence. As stipulated in the contract, the company V are dealers for any manufacturer or distributor of any other paint. In this case, although no function of the contract or collect money in Vietnam but the company V has become dependent of company H, is no longer the independent agent. Under the provisions of the agreement between Vietnam and the United Kingdom (Paragraph 6, article 5: permanent establishments) of H company is considered resident establishments in Vietnam.
DD) business that is authoritative for an audience in Vietnam:-the Authority regularly negotiated, signed contracts on that business; or sign the contract bears the name of that object but binding obligation or responsibility of the business; or-not competent to negotiate, sign contracts, but have the right regular representation for business that delivered the goods in Vietnam.
1.2.3. A foreign business will be deemed not to have permanent establishments in Vietnam in the following cases: a) business that uses the medium of storage purposes only, display goods of the business.
b) that business in Vietnam a cargo warehouse storage purposes only, on display or to another business machining.
c) that business in Vietnam a fixed business premises only aims to purchase goods or to collect information for the business.
d) that business in Vietnam a fixed business basis only for the purposes of conducting the activities prepared or for business.
1.2.4. in case of a company that is the subject of the country signed the agreement with Vietnam controlled or controlled by a company that is the subject of Vietnam, or are conducting business activities in Vietnam (possible through permanent establishments or other form) will not make any company would become the permanent base of the the other company.
Example 16: A foreign enterprise which established a business venture or 100% foreign-owned enterprise in Vietnam. Meanwhile, business venture or 100% foreign-owned enterprises are not considered permanent establishments in Vietnam by foreign enterprises.
However, the case of the company is the subject of the country signed the agreement with Vietnam which formed a business venture or 100% foreign-owned enterprise in Vietnam (including export processing business), the company which will be considered as having a permanent base in Vietnam if :-business venture or 100% foreign-owned businesses often negotiate, sign contracts that company; or sign contracts on business venture or 100% foreign-owned business but binding obligation or liability of the company; or-business venture or 100% foreign-owned businesses often represents foreign companies delivered the goods in Vietnam; or foreign company that has authority for technical infrastructure of the business venture or 100% foreign-owned enterprise in the process of production (that is, the foreign companies use the technical infrastructure of the business venture or 100% foreign-owned enterprise in Vietnam (if any) in the course of business is not on the basis of the principle of market value).
1.3. Identify the taxable income of resident establishments 1.3.1. The determination of the taxable income of the permanent establishments of foreign companies, except for the foreign bank branches in Vietnam are the instructions in point 1.3.3 below, follow the writing guide implementation of enterprise income tax law for foreign individuals, organizations and business do not establish legal entities in Vietnam or have income in Vietnam.
1.3.2. When determining the expenses that the headquarters of foreign businesses or offices of foreign enterprises to allocate for a permanent base in Vietnam, permanent facility will be considered an independent business conducted the same or similar activities in the same or similar conditions and is completely independent of the main headquarters of the foreign businesses or offices of foreign enterprises. However, in all cases, the following allocation of the Head Office of the enterprise or the offices of foreign enterprises to allocate for a permanent base in Vietnam will not be accepted as costs to be deducted:-royalties or similar payments for the use of patents or similar rights;
-Commissions for services or for the management of work;
-Loan interest rates in all forms.
1.3.3. The determination of the taxable income of the foreign bank branches in Vietnam according to the instructions on the determination of taxable income business income of legal entities in Vietnam. However, in all cases, the following allocation of the headquarters of the foreign bank or the Office of the foreign bank branches in Vietnam for the allocation of foreign bank will not be accepted as costs to be deducted:-royalties or similar payments for the use of patents or similar rights;
-Commissions for services or for the Manager job.
The tax rules for income business as above are referred to in terms of business income (usually the article 7) of the Treaty.
2. in case of foreign business operations in manufacturing, business in Vietnam through the establishment of legal entities in Vietnam.
According to the current rules of the law of Vietnam, foreign businesses can conduct business in Vietnam through the establishment of the legal person in Vietnam as the business venture or 100% foreign-owned businesses.
As stipulated in the agreement, the legal personality has the obligation to pay tax on income with respect to income from production and business operations as the other Vietnam business under the provisions of the corporate income tax Law. The portion of foreign business income received in the form of profit is divided by the investor or the income from the transfer of shares (if any) will be made in accordance with the corresponding provisions of the Treaty provisions on income from shares or interest income from transfer of property.
Example 17: the T company of China contributed 70% establishing joint venture X in Vietnam. In 2009, the X-venture company profit from business activities 100 million; After the corporate income tax (TNDN) in Vietnam as a 25% tax, profit after tax was divides according to the apportionment. In 2010, the company sold T 50% shares in the JV X earned 3 billion and earnings of 50 million interest on the amount of capital for the joint venture company X. Tax obligations of the joint venture company X and company T in 2010 are as follows:-joint venture company X filed tax like other Vietnam businesses. Specifically: Cit = 100 million x 25% = 25 million-T company of the China tax in Vietnam as defined in the agreement as follows: + for profits after tax divided (75 million x 70%): tax for interest income shares (instructions in section 4. Income from equity interest, chapter II, of this circular);
+ For earnings from transfer of shares (3): tax for income from property transfer (instructions in section 8. Income from transfer of property, chapter II, of this circular);
+ For earnings from interest on the loan (for 50 million): tax for income from interests on loans (instructions at section 5. Income from interest on money lending, chapter II, of this circular).
Section 3 INCOME FROM INTERNATIONAL TRANSPORT OPERATIONS article 12. Define international transportation under the provisions of the agreement, international transportation is the active transport of goods and passengers by ship or plane, in some agreement may include means of transport by road, rail or inland waterway (below referred to as means of transport) by enterprises of the signing Countries make except where the shipping activities which occur only between two locations of Vietnam or the signing of the agreement with Vietnam.
Example 18: A Japanese business carrying passengers and cargo in Vietnam. The activities of transport of passengers and goods in the following of this business will be regarded as international transport operations:-transportation of goods and passengers from one location in Vietnam to a location in Japan (including goods that passengers from Haiphong through Ho Chi Minh City and Osaka to Moto-ky-box);
-Transportation of goods and passengers from one location in Vietnam to a location outside of Vietnam (Beautiful example Singapore);

The case of the Japanese vessel above the tourist passenger-service package for Ho Chi Minh City cruise-Singaporean-po-Hai; the ship sailed in Ho Chi Minh City and port in Beautiful Singapore, all passengers after visiting Beautiful Singapore returned to the ship for about. In Beautiful Singapore, this Board do not receive any additional passengers. So, cruise passengers on here are not considered international transport (although the ship's itinerary have long transport takes place outside of Vietnam but the point of origin and final destination are in Vietnam).
Article 13. Determine the real audience enjoys the agreement for income from international transport depending on the agreement, signed by the Country's business activity in international transport are determined according to the following criteria: 1. The business object by Vietnam's residence or of the country signed the agreement with Vietnam; or 2. Businesses have headquarters in Vietnam or in the country signed the agreement with Vietnam;
the condition that the business owns or has rights to use the whole of at least one means of transport and use this medium to transport passengers and/or goods during international transport journey (known as the means of transport operated by enterprises directly).
Article 14. Income from international transportation subject to the provisions of each agreement, income from international transport activity of the subjects referred to in article 13 will be exempted or reduced taxes in Vietnam or in the country signed the agreement with Vietnam.
Scope of the exemption, the tax reduction in Vietnam for enterprises of the country signed the agreement with Vietnam including: 1. Income from international transport operations by means of transport operated by enterprises directly and from the ancillary activities associated with international transport activity , specifically: 1.1. Revenue from international transport operations by means of transport by the direct operating business and export shipping documents (tickets, invoices or a manifest (manifest) to transport passengers and goods).
1.2. The revenue from the rental of a transport section (also called seat rental) or lease of means of transport as the main operating business trips directly.
Example 19: A Japanese shipping cargo received by company C from Vietnam to go Dutch with varying fee is 300 us dollars. A carrier has no direct operating ships that rented on Board of the B of Thailand cost 250 dollars. In addition to the cargo for A like on liners, B cargo direct to other customers on the same route with the cost is 200 us dollars. In this case:-for A shipping: amount of 300 u.s. dollars obtained from the receipt of the cargo company for C $ 50 or the amount obtained due to variances from the receipt of the cargo for company C and B's spot on the rental are not considered income from international transport by ship to be exempt from enterprise income tax according to the between Vietnam and Japan by A not directly operating the ship (which just buy the whole seat leg on Board of the B) should still have to file corporate income taxes enough.
-For B: shipping cost amount 450 us dollars is considered income from international transport operation in an enterprise income tax reduction under the agreement between Vietnam and Thailand (50% reduction of corporate income tax payable).
1.3. Revenue from cargo operations or passengers involved Associates International transport route with business conditions join venture on the basis of contributions by means of transport direct or operating businesses contribute to the cost of operation of means of transport by the Executive and associate the certificate from the transport operators separate. In this case, revenue is determined on the basis of the transport documents by enterprises is released but does not list the parties exceed the blank of transport means that enterprises are allowed to exploit under codeshare agreements.
1.4. The revenue from transporting passengers or goods export by enterprises evidence from international transport are carried on means of transport due to other business operator with one of the following two conditions: a) Long carriage that is part of the international transport by ship or aircraft by the operating business directly and be recorded in the certificate from the the main transport enterprise release;
For example 20: Also with the example above, 19, A Japanese shipping receipt of C company from Vietnam to go Dutch with varying fee is 300 us dollars. However, A carrier ship A1 by directly operating the cargo section two from Beautiful Singapore to the Netherlands. Long an from Vietnam go Pretty airline Singapore Airlines to hire A ship B of Thailand shipping cost is 50 us dollars.
-For A carrier: the amount of 250 us dollars (300-50) obtained from the direct carriage of goods in international transport in an enterprise income tax exemption under the agreement between Vietnam and Japan.-for shipping B: 50 charges amount in us dollars is considered income from international transport operation in an enterprise income tax reduction under the The agreement between Vietnam and Thailand (50% reduction of corporate income tax payable).
b) carriage which is made on the basis of agreement to swap a transport section (called the swap possible) by the operating business to business direct is using a proportionate means of transport due to other business executives. In this case, revenue is determined on the basis of the transport documents by the release of the business but not excess space that businesses are exploiting free on its media partners agreed swap.
1.5. Income from the short term rental (save)-ten-the bow tie with nature is extra activity accompanied the operation of means of transport operated by enterprises directly if in the agreement provisions.
Extra activity properties attached to the operation of the means of transport of the short term rental (save)-ten-identified Ribbon is the antenna-the bow tie attached with means of transport have on Vietnam, port-ten-the bow tie are shipping container to import and use the antenna-the bow tie has been included in shipping rates; the short term rental income-ten-bow tie arising from the retention order party-ten-bow tie too free usage period.
1.6. The revenue from the rental of ships or aircraft (known collectively as the chartering service ceiling) for international transport operation of means of transport operated by enterprises directly if specific provisions in the Treaty and satisfy all three of the following conditions : a) the means of transport being used in the business of international transport; and b) of the total rental period is shorter than the time the media is used for international transport operations of the main business in the 12 month period beginning or end of the calendar year; and c) rent Parties not to change the name of coral and means of transport.
Chartering service ceiling is chartering in which ship owners provide the chartering a ship specifically does not include the boat or crew.
Revenue is stated in points 1.5 and 1.6 above will not be considered to be revenue from ancillary activities associated with international transport operations in order to apply the agreement if the business does not arise revenues stated in points 1.1, 1.2, 1.3 or 1.4.
2. where two or more business associates works to form a venture partnership or organization does not have the legal implementation of international transport operations by means of transport or by associates partnership direct operating and transport documents are published under the name of associates or partnership shall determine the scope of under the tax exemption was made for each party list or partnership under the agreement signed between Vietnam and the country where the party list or partnership is resident or has a real headquarters. Determining the sales tax reduction, exemption is applied similar to the provisions in clause 1 and allotted in proportion to the revenue share partnership mailing or parties under contract or codeshare agreements or partnerships.
Example 21: Scăng aviation associates-go-via (SAS) operate international passenger transport in Vietnam go to the Nordic countries. As such, the airline's revenue arising in Vietnam shall be allocated to the parties involved, which is operating the airline SAS Associates is the objects reside in Norway, Denmark or Sweden to apply under each of the relevant agreements.
When the tax obligation Declaration, enterprises must separate accounting earnings stated above to be exemption of enterprise income tax reduction, consistent with regulations on income from shipping operations. In all cases the revenue exemption, tax relief cannot exceed tax revenue earnings of the business functioning international transport under the provisions of the relevant text.
The case of the Treaty (such as the agreement with Bangladesh, the Philippines and Thailand) specified only income tax reduction by a certain percentage, the business must pay income tax for income from international transportation under section rate was not reduced.
The tax rules for income from international transportation as outlined in the terms of international transportation (usually article 8) of the Convention.
Item 4 INCOME FROM INTEREST SHARES article 15. The definition of stock interest

As stipulated in the agreement, the interest shares is the amount to be deducted from the income after tax of limited liability companies, joint-stock company paid to the members of the limited liability company or joint stock company's shareholders, the funds are deducted from the income after tax of venture business , 100% foreign invested enterprises pay for the foreign side, income from investment activities (indirectly) overseas (not counting the income is interest from money lending provisions in section 5, chapter II, of this circular) of the objects reside, and Vietnam is divided into income from direct investment abroad of Vietnam businesses are signing Countries tax processing as interest shares.
For example 22: S business of Vietnam investment in countries X and Y with the situation of income and pay tax according to the provisions of the country X and Y as follows: X Y 1 2 3 4 5 Water Water STT income before tax income Tax 28% income tax after tax income for interest income shares get 100 28 72 14.4 (20%) tax rate


57.6 100 28 72 Not considered interest shares of such corporate 72 S, within the scope of the Treaty with the country X, are considered foreign equity interest is 72; within the scope of the Treaty with the country Y, are not considered to have foreign equity interest.
Article 16. Determine tax obligations for income from interest of shares 1. Under the provisions of the agreement, Vietnam has the right to collect taxes for interest of shares by a company is subject of Vietnam charged to an audience of the country signed the agreement with Vietnam under a tax treaty depending on the limit (usually no more than 15%) on condition that the receiving object is a real object.
2. where a resident of Vietnam received interest shares of a company that is the subject of the country signed the agreement with Vietnam, the Countries signed the agreement with Vietnam has the right to tax the income as specified in paragraph 1, this, Vietnam has the right to collect taxes for this income in accordance with the current law on taxation in Vietnam; but Vietnam must take measures to avoid double taxation for this earnings (as defined in chapter III. Double taxation avoidance measures in Vietnam of this circular).
3. in case a resident objects get stock interest which existing laws on taxation in Vietnam does not collect income tax rules for income category or collect taxes with a tax rate lower than that stipulated in the agreement, then the object will make income tax obligations according to the provisions in the current law on taxation in Vietnam.
For example 23: A British company invested 14 million u.s. dollars in a joint venture in Vietnam in 2010, has received interest from a joint venture in Vietnam. Although under the agreement between Vietnam and the United Kingdom (item 2, article 10: interest, stock), Vietnam has the right to collect taxes for income from interest shares of British companies with a tax rate of 7%, but under current tax law, Vietnam has not yet collect taxes for interest earnings from shares of the British company business should not have to pay tax for income from interest of shares mentioned above.
Article 17. Determine the real audience enjoys the agreement for income from interest of shares as stipulated in the agreement, the regulations for stock interest only applies to objects that reside at the same time as the receiving object and real object is entitled to the benefit of shares-mean shareholders. Therefore, in addition to a number of cases do not benefit the agreement as defined in article 6. Some cases refused to apply the agreement on the basis of the principle of benefit of the Treaty, the reduced tax rate or the tax exemption for income from interest of the shares specified in the agreement shall not apply to: 1. The object receiving the interest payments of the shares but not shareholders or is not the object resides.
Example 24: An investment Fund registered in the country (founded by members is the object of the agreement with Vietnam) involved, which established joint V in Vietnam. Investment fund that is not an object of residence S. Equity Interest received by investment funds from venture firm V and income received by the Member's capital contribution fund from the amount of interest shares is divided by investment funds are not applicable agreements between Vietnam and countries S water with which the members are residents stay.
2. Interest of the shares by the company the subject of Vietnam to pay for a permanent base in Vietnam of a resident of water object signed the agreement with Vietnam.
Example 25: CV bank branch is the branch of foreign bank in Vietnam by C Bank of France bought the shares in a company of Vietnam and is divided into an equity interest. At the request of the subsidiary stock interest rate funds CV, which are shipped straight to Bank C has its headquarters in Paris. In this case, real people enjoy interest shares is branch CV, not Bank C. Because the branch ACTS as a permanent base of Bank C in Vietnam should follow the provisions of the agreement between Vietnam and France (Clause 5, article 10: interest, stock), the regulations for stock interest will not apply to Bank C that the provisions on tax for income from business activities will be applied (article 7 : Business income, agreement between Vietnam and France).
3. Interest of the shares by the company the subject of Vietnam to pay for a permanent facility of another company of Vietnam in the country signed the agreement with Vietnam.
Example 26: V Vietnam's banks have a branch in the country is the L VC signed the agreement with Vietnam. According to the law of the country of L, VC branch is considered a permanent base of Bank V where. VC affiliates buy shares of a company in Vietnam and is divided into interest shares. In this case, the regulations for stock interest in the Treaty between Vietnam and L will not be applied.
The tax rules for income from equity interest as stated above in terms of equity interest (usually 10) of the agreement.
Section 5 of the INCOME FROM LENDING MONEY INTEREST RATES Article 18. Define interest rate from funds for the loan under the provisions of the agreement, "the interest from the money lenders" is the income from the loans of any kind, whether or not secured by mortgage and whether or not you are entitled to the return of the borrowers, including income from government securities and income from bonds or conventional bonds , including bonuses and awards associated with the stocks, bonds or conventional bonds.
Article 19. Determine tax obligations for income from interests on loans 1. Under the provisions of the agreement, Vietnam has the right to collect taxes for interest from lending money arising in Vietnam charged to an audience of the country signed the agreement with Vietnam under a tax limit (usually not more than 10%) depending on the agreement, on condition that the receiving object is a real object.
Interest rate from funds for loans incurred in Vietnam is the interest from the loan money due to any one object of Vietnam residency and pay, including interest rate is good and is charged by the Government of Vietnam and the Vietnam local government agency or permanent establishments or fixed base of a resident foreign object in Vietnam.
Example 27: QT Bank branch is the branch of foreign bank in Vietnam by the Bank of Thailand's Q for Q a bank account interest rates lenders money. Because the QT branch is a permanent base of the Bank in Vietnam, so Q under the provisions of the agreement between Vietnam and Thailand, this interest amounts arising in Vietnam and taxed in Vietnam with a tariff of 10% (Paragraph 2, article 11: interest rates from money-lending). However, because the tax rate for income from interests on Vietnam's current loan in this case is 5% interest rate, this amount should be taxable only in Vietnam with a tariff of 5%.
2. where a resident of Vietnam received interest from lending money to developing countries signed the agreement with Vietnam, the Countries signed the agreement with Vietnam have the right tax at the source of that income as defined in paragraph 1 above and Vietnam also have the right to collect taxes for this income in accordance with the current law on taxation in To the South, but Vietnam must take measures to avoid double taxation for this earnings (as defined in chapter III. Double taxation avoidance measures in Vietnam of this circular).
3. where the applicable law on taxation in Vietnam do not prescribe the collection of income tax with respect to income category or collect taxes with a tax rate lower than that stipulated in the agreement, then the object will make income tax obligations according to the provisions in the current law on taxation in Vietnam.
Example 28: Also with for example as on the 27th, but suppose the interest from the loan money is paid for a resident's personal objects in Thailand. Although under the agreement between Vietnam and Thailand (Paragraph 2, article 11: Interest from money lenders), Vietnam has the right to collect taxes for this interest rate amount with the tax rate of 15%. But according to the provisions of the personal income tax Law of Vietnam, the applicable tax rate is 5%. Therefore, Vietnam only collect taxes with tax rate of 5% instead of 15%.
Article 20. Determine the real audience enjoys the agreement for income from interest of money lending under the provisions of the Treaty, the provisions on tax for income from lending money interest rates only apply to direct loans objects directly from money lending interest rate and at the same time is the real object of interest from lending money that-meaning the lender.

Example 29: A Vietnam company signed the loan contract with the Bank of Korea's H. Under the provisions of the contract, the company received loan from Vietnam and charged both of capital and interests on loans to the bank account of a H to H Bank opened at Bank C in c. in this case, the affected interest is the Bank of Korea regardless of water H C have double taxation avoidance agreements with Vietnam or not.
Example 30: A company resident in Vietnam signed the loan contract with the Bank in country X, C D Bank in country Y and E banking in country Z and the loan was transferred directly from their bank account to the company a. water X and Y, which has signed the agreement on double taxation avoidance with Vietnam. A company can pay interest according to the following ways: (i) A transfer company charged interest on borrowed money directly to individual bank C, D and E with corresponding capital contribution rate; or (ii) A transfer company charged the entire loan interest rate for Bank C, then the split back interest rates due to the agreement of the lender (Bank C, D and E). In this case, the loan interest rate payments for the syndicated of banks C and D of the cases (i) and (ii) the case of C will apply the Treaty.
Example 31: suppose the example 30 above, company A pays interest according to the way things are (iii) as follows: companies A move charged the entire loan interest rate for banks E, then the split back interest rates due to the agreement of the lender (Bank C, D and E). In this case, the Bank C, D and E are not in an applicable agreement.
In addition to a number of cases do not benefit the agreement as defined in article 6. Some cases refused to apply the agreement on the basis of the principle of benefit of the Treaty, the reduced tax rate or the tax exemption for income from interest on money lending provisions in the agreement shall not apply to: 1. The object of interest payments from the loan money but not the lender.
Example 32: A Vietnam company loan interest paid to the Bank of Thailand's C. At the request of the Bank, the interest rate on this loan is transferred to the Bank of France headquarters in Paris. In this case, the affected interest is C Bank of Thailand, not the Bank of France P. Therefore, the Bank has no right to P apply the requirements specified in the agreement between Vietnam and France for interest from money lenders.
2. Interest rate from funds for loans incurred in Vietnam to pay for a permanent base in Vietnam of a resident of water object signed the agreement with Vietnam.
Example 33: A Vietnam company loan interest for foreign bank branch V in Vietnam by foreign bank C is the object of Thailand. In this case, the interest from the loan money received by foreign bank branch V is treated as ordinary business income (non-income from interests on loans) of the foreign bank branch V in Vietnam under the provisions of the agreement between Vietnam and Thailand.
3. The interest rate from funds for loans incurred in Vietnam to pay for a permanent facility of another company of Vietnam in the country signed the agreement with Vietnam.
Example 34: V Vietnam's banks have a branch in the country is the L VC signed the agreement with Vietnam. According to the law of the country of L, VC branch is considered a permanent base of Bank V where. VC affiliates for a company in Vietnam borrow money and receive interest from money lenders. In this case, the rules on taxation for interest from money lenders in agreements between Vietnam and L will not be applied.
4. The interest rate from funds for loans incurred in Vietnam to pay for a permanent base of a third country's business in the country signed the agreement with Vietnam.
Example 35: A Vietnam company loan interest paid to the Bank branch in the Bank's N N C is the object of Thailand. In this case, the loan interest received by bank branch N does not apply the provisions of the agreement between Vietnam and Thailand.
5. lending Money is not transferred directly from the lender's account is the subject of the country signed the agreement with Vietnam.
Example 36: suppose the example 30 above, the entire loan amount under the contract was transferred to company A from member banks E; Meanwhile, loan interest incurred on the loan amount will not apply the Treaty.
The tax rules for income from interest from money lenders as stated in terms of the interest rate on the money lenders (usually article 11) of the agreement.
Item 6 INCOME FROM ROYALTY article 21. The definition of royalty as defined in the agreement, royalties are payments for the use of, or the right to use: 1. Copyright of literary, artistic or scientific, including the motion picture and the type of tape or disc used in radio or television;
2. Patents, patent;
3. trade marks;
4. Design, model, plan, secret formula or process;
5. Computer software;
6. industrial equipment, commercial and science;
7. information relevant to the experience of industry, science and commerce.
Article 22. Determine tax obligations for income from royalties 1. Under the provisions of the agreement, Vietnam has the right to collect taxes for royalties arising in Vietnam charged to an audience of the country signed the agreement with Vietnam under tariff limit (usually not more than 10%) depending on the agreement, on condition that the receiving object is a real object.
Royalties arising in Vietnam is the copyright funds by any one object of Vietnam residency and pay, including those funds are subject to copyright and is charged by the Government and the local government agency or permanent establishments in Vietnam or a fixed base which a resident foreign objects have in Vietnam.
2. where a resident of Vietnam received royalties arising in the country signed agreements with Vietnam, the Countries signed the agreement with Vietnam have the right under the income tax as specified in paragraph 1 above, Vietnam has the right to collect taxes for this income in accordance with the current law on taxation in Vietnam; but Vietnam must take measures to avoid double taxation for this earnings (as defined in chapter III. Double taxation avoidance measures in Vietnam of this circular).
Example 37: An oil processing venture in Vietnam signed a contract with a South Korean company which regulates this company transferred to the Vietnam venture phase recipe South Korean company's lubricating oil within 20 years. When Vietnam venture royalty for South Korean companies, according to the provisions of the current law on taxation in Vietnam, venture is tax deductible on a royalty of 10% of the total royalty to submit budget. However, the base agreement between Vietnam and South Korea (Paragraph 2, article 12: royalty), venture only right deducted according to the level of 5% instead of 10%.
3. where the applicable law on taxation in Vietnam does not collect income tax rules for income category or collect taxes with a tax rate lower than that stipulated in the agreement, then the object will make income tax obligations according to the provisions in the current law on taxation in Vietnam.
Example 38: suppose the example above 37, South Korean companies raising capital in the joint venture in Vietnam with the right to use a formula blending lubricants in the past 20 years. According to the agreement between Vietnam and South Korea (Paragraph 2, article 12: royalty), Vietnam has the right to collect taxes the company rights to South Korea due to the transfer of used lubricating oil blending formula into monetary capital with a tariff of 5%. However, in accordance with the law of Vietnam, if the capital contribution with technology transfers are tax free income, the South Korean company are tax free.
Article 23. Determine the real audience enjoys the agreement for income from royalty as defined in the Treaty, the regulations for the royalty applies only for the direct object and real object affect copyright-income means people have the right to own , use and exploitation of copyright. Therefore, will not apply to: 1. Object royalty payments but not the object of ownership, rights of use and exploitation rights copyright; or 2. Royalties arising in Vietnam relates directly to a resident establishments in Vietnam enjoy their real audience is an audience of the country signed the agreement with Vietnam; or 3. Royalties arising in Vietnam to pay for a permanent facility of another company of Vietnam in the country signed the agreement with Vietnam.
Example 39: A branch of the British tobacco company in Vietnam lets a company Vietnam using formulas and trademarks of the company British tobacco company's products in Vietnam with branch conditions to check and monitor the process using. In this case, the royalties from the use of the formula and the trade marks of the British tobacco companies directly related to the branch. Because the branch is permanent base in Vietnam of British tobacco companies, should follow the provisions of the agreement between Vietnam and the United Kingdom (paragraph 4, article 12: royalty), Vietnam has the right to collect taxes for income, such as income from business activities (article 7: the return of the business agreement between Vietnam and the United Kingdom).
The tax rules for income from royalties as outlined in the terms of a royalty (usually article 12) of the Convention.
Section 7 INCOME FROM TECHNICAL SERVICE PROVIDERS article 24. The definition of technical service fee as specified in the agreement, a technical service fee as payment in any form would pay for any object, not the object employees pay, for any of the services of technical nature, management or consulting.
Article 25. Determine tax obligations for income from technical services

1. Under the provisions of the agreement, Vietnam has the right to collect taxes for technical services arising in Vietnam charged to an audience of the country signed the agreement with Vietnam under tariff limit (usually not more than 10%) depending on the agreement, on condition that the receiving object is a real object.
Technical service fee arising in Vietnam is the payments under any form due to an audience of Vietnam and are charged, including technical service fees are subject to and are charged by the Government and the local government agency or permanent establishments in Vietnam or a fixed base which a resident foreign objects in Vietnam.
For example 40: Company X is the object resides in Vietnam producing canned fruits. To expand the market of consumption goods to Europe, company X has hired the company in Germany for legal advice on the procedure to open a branch or search agents to consume the product. This consulting service is made in Germany and the company M without resident establishments in Vietnam.
In this case, when the pay service fees to company M, company X has the obligation to deduct corporate income tax with tax rate not to exceed 7.5% according to agreements between Vietnam and Germany (paragraph 1, article 12: royalty and technical service fee).
2. where a resident of Vietnam getting technical service fees incurred in the country signed the agreement with Vietnam, the Countries signed the agreement with Vietnam have the right under the income tax as specified in paragraph 1 above, Vietnam has the right to collect taxes for this income in accordance with the current law on taxation in Vietnam; but Vietnam must take measures to avoid double taxation for this earnings (as defined in chapter III. Double taxation avoidance measures in Vietnam of this circular).
The tax rules for income is technical service fee as above stated in terms of technical service fee (usually article 13) of the agreement.
Section 8 INCOME FROM TRANSFER of PROPERTY Article 26. The definition of income from transfer of property income from transfer of property is any form of income from the sale, transfer (in whole or in part) or exchange of property and rights to property; including case brought the property into a business base in Exchange for the rights in business establishments.
Article 27. Determine tax obligations with regard to income from the alienation of property 1. Tax obligations for income from transfer of property in Vietnam under the provisions of the agreement, Vietnam has the right to collect income tax under the provisions of the current law on taxation in Vietnam for income from the transfer of property in Vietnam of a resident of water object signed the agreement with Vietnam.
Example 41: French oil Firm transfer of rights to exploit oil reserves in a location on the waters of Vietnam, received income will have to file income taxes in accordance with the law of Vietnam.
2. tax obligations for income from transfer of property business property of a permanent base in Vietnam under the provisions of the agreement, Vietnam has the right to collect income tax under the provisions of the current law on taxation in Vietnam for income from the transfer of business assets or permanent establishments transfer resident establishments in Vietnam Of an object of the country signed the agreement with Vietnam.
For example: 42 bank branches of C P (is the country has signed the agreement with Vietnam) works in Hanoi. In 2010, the branch ceased operations and sold the entire property and equipment used for the purposes of the business of the branch. The income obtained from the transfer of the on-going to tax declaration (after subtracting the value of the remaining property and equipment) according to corporate income tax at applicable Vietnam (25%).
3. tax obligations for income from transfer of ships, boats, aircraft operating in international transportation under the provisions of the agreement, income from transfer of ships, boats, aircraft operating in international transport (as defined in article 12. international transport definition of this circular) by international transport enterprises of the country signed the agreement with Vietnam operated not have to pay tax in Vietnam.
4. tax obligations for income from transfer of capital from foreign investors in the enterprise with foreign capital, in a partnership or a trust to which property values up mainly in corporate capital in the majority of agreements between Vietnam and countries all have rules under which , Vietnam has the right to collect taxes on income in the case of foreign parties in the capital transfer businesses, trusts or the partnership is the subject of Vietnam where real estate values up primarily in the total assets of the enterprises.
The rate of property value of the assets of the business is the simple average of the ratio of the value of real property in total assets of the business at the time of transfer of the property, the start time and end time in the tax year immediately before the computer in which the property is transferable. Determining the value of real estate is based on the table of the audited assets of the business at the time mentioned above.
The ratio of the value of real property in total assets of the enterprises are defined as follows:-in the case of agreements have specific provisions about the ratio or proportion mainly by the rate specified in the agreement, as in clause 4, article 13, Treaty between Vietnam and Spain regulates the rate is over 50% , or in clause 4, article 14, of the Treaty between Vietnam and Oman and in paragraph 4, article 13, Treaty between Vietnam and the United Arab Emirates unified regulating rate mainly on 50%.
-Case in agreement not specific regulations about the rate or incidence is primarily the computer primarily defined as above 50%.
43 example: on 30/3/2012, an investor is subject resides In United Kingdom-xi-a transfer of its stake in a business V in Vietnam. The rate of property value in the total assets of the enterprises V at the time of the day 30/3/2011, 01/01/2011 and 31/01/2011 in turn is 60%, 40% and 53%. The determination of the ratio of the value of real property in total assets of the enterprises V for the purpose of determining the tax obligations of investors In United Kingdom-xi-a as follows: clause 4, article 13: income from transfer of property, the agreement between Vietnam and Ireland-United Kingdom-a rule: "4. The return by a resident of a Country object signing obtained from the alienation of shares or the respective interests in a company whose assets include all or mostly real estate located in other countries may be taxed in the other Country. "
The provisions on non-specific rate regulation of the real estate value in the assets of the company should the rate of over 50% would be considered primarily.
Simple average number of property value ratio in the total assets of the business are determined as follows: (60% + 40% + 53%)/3 = 51%.
So, in this example, the value of real estate has dominated among the assets of the company V. 5. Tax obligations with regard to income from the alienation of shares in a company in Vietnam At a number of treaty provisions income from transfer of shares of an audience of the country signed the agreement with Vietnam in a company is a resident of Vietnam audience taxed in Vietnam.
Example 44:5, Clause article 13: income from transfer of property, the agreement between Vietnam and Ireland-United Kingdom-a rule: "income from the transfer of shares in a company is subject to a signing Country not the shares mentioned in paragraph 4 may be taxed in that country."
As specified above, if an object resides In United Kingdom-xi-a have income from the alienation of shares in a company is a resident of Vietnam object then that income tax would be in Vietnam.
6. tax obligations for income from transfer of property in Vietnam as stipulated in the agreement, the income from the transfer of property other than the property referred to in clause 1 to Clause 5 above in a subject's Vietnam resident of the country signed the agreement with Vietnam was not filed income tax returns in Vietnam.
For example 45: A construction company of China brought to the Vietnam construction machinery is a construction works within 3 months. After their execution, this company on water and resold the aforesaid machines in Vietnam. Under the provisions of the agreement between Vietnam and China, this company has no permanent base in Vietnam (Clause 3, article 5: permanent basis), so do not have to pay tax in Vietnam (Paragraph 6, article 13: income from transfer of property).
The tax rules for income from transfer of property as above stated in terms of income from transfer of property (usually the article 13) of the agreement.
Section 9 INCOME FROM INDEPENDENT PERSONAL SERVICES Article 28. The definition of income from independent personal services under the provisions of the agreement, income from independent personal services income due to an individual is the subject of the country signed the agreement with Vietnam obtained from independent activities to provide the service trades such as scientific services , literary, artistic, educational or teaching, namely independent practice activities of physicians, lawyers, engineers, architects, dentists, accountants and Auditors.

Income from independent personal services do not include works for hire (to be defined in terms of income from personal activities), the remuneration of Directors (to be defined in terms of remuneration of Directors), pension funds (which are defined in terms of Pension Funds) , a service of the State (to be defined in terms of income from government service), the income of the student, the student (to be defined in terms of income students), teacher and Professor (specified in terms of the income of professors, teachers and researchers) and independent performance of artists and athletes (to be defined in terms of income of artists and athletes).
Article 29. Determine tax obligations for income from independent personal services under the provisions of the agreement, a resident of water object signed the agreement with Vietnam undertook to provide independent personal service in Vietnam will have to pay tax on personal income in Vietnam in the following cases : 1. Individuals that practise independently through a fixed base.
The term "fixed base" refers to a place or address the regular nature or stability within the national territory through which an individual make the provision of services industries (for example defense consultation Office, architect or lawyer , ...). Principle of determining the "fixed base" is similar to the principle of "permanent base" of the business referred to in Point 1.2, article 11, this circular.
2. Individual presence in Vietnam from 183 days or more during the tax year or within 12 months from the date to the Vietnam, depending on the agreement.
3. Individuals that gained a total of certain income, depending on the agreement, from implementing independent profession in Vietnam in the given time period (usually one year).
Example 46: in the year 2012, a doctor is the subject of the tape-Bangladesh conducted an operation at a hospital in Vietnam and receive compensation is 50,000,000. The time the doctor is present in Vietnam to conduct surgery is 5 days. Under the provisions of the agreement between Vietnam and Bangladesh (Paragraph 1 c, article 15: activity independent personal services), as the doctor's income is 50,000,000 (in excess of 1,500 us dollars) should the doctor has a duty to pay tax on personal income in Vietnam.
The tax rules for income from independent personal services as outlined in the terms of the personal service activities (usually the article 14) of the Convention.
Section 10 of the INCOME FROM the EXTRA PERSONAL SERVICE ACTIVITIES in article 30. The definition of income from dependent personal services under the provisions of the agreement, income from personal services activities depends is income in the form of public money because a individuals are objects of the country signed the agreement with Vietnam obtained from doing operations in Vietnam and vice versa. Income from dependent personal services do not include the income of the individual with individual independent practice (to be defined in terms of service, the independent professions), members of the Board of Directors of enterprises (to be defined in terms of remuneration of Directors), artists, athletes (to be defined in terms of the income of artists and athletes) , staff for the foreign Government (to be defined in terms of income from government service), and public money in the form of pension funds (which are defined in terms of Pension Funds).
Article 31. Determine tax obligations for income from dependent personal services 1. Under the provisions of the Convention, an individual who is the subject of the country signed the agreement with Vietnam have income from employment activities in Vietnam will have to pay tax for the income earnings that work in Vietnam according to the current rules on personal income tax of Vietnam.
For example 47: in 2012, Mr. A is the object of France working for F Bank branch is a foreign branch of a French Bank in Vietnam within two months. The entire salary and other income of A subsidiary payment by F. In the years before and after that, he was A non-presence in Vietnam. In this case, he is A be obliged of personal income tax with respect to income received from working time in Vietnam according to the current rules on taxation of personal income in Vietnam.
2. If the individual referred to in paragraph 1 at the same time satisfy all three of the following conditions, the wages earned from work done in Vietnam will be tax free income in Vietnam: a) individual present in Vietnam under 183 days in a 12 month period begins or ends in the tax year; and b) the employer is not the object of any public money that Vietnam is paid directly by the employer or through an object representing the employer; and c) that public money is not due to a permanent base which the employer has in Vietnam and pay.
Example 48: N company of Japan join venture S established distribution in Vietnam. In 2012, the company sent him N Z to Vietnam as a company representative to negotiate a contract about the company N offers "know-how" sale for JV's in a month's time. In the years before and after that Mr. Z not present in Vietnam. The whole of the income and expenses of Mr. Z in working time in Vietnam by company N. In this case, Mr. Z has at the same time satisfy the three conditions stated in paragraph 2 above should be exempt from personal income tax in Vietnam.
3. The concept of "employer" referred to in point 2. b) refers to the object using the real labor. Typically, an object is considered the real employer if the following rights and obligations: a) object that has the rights to the products and services generated by the labor and responsibility as well as the risks to workers;
b) objects that give instructions and provide the means for labor workers;
c) object that has the power to control and responsible labor locations.
For example 49: Also with 48 examples above, in 2013, he Z to Vietnam as the venture's expert S Guide to apply the "know-how" in the period of 3 months. In the years before and after that, Mr. Z not present in Vietnam. With mental help for venture's entire income, and the cost of Mr. Z in working time in Vietnam by company N. In this case, on the form, Mr. Z has at the same time satisfy the three conditions of clause 2 above, but in essence, for the knowledge of the employer actually his real employer Z during the time worked in Vietnam is venture S, not N company. So he Z are not tax free income individuals in Vietnam.
4. where the person who is the subject of Vietnam the country signed the agreement with Vietnam does not have income from employment activities in Vietnam that only income from employment activities in foreign countries will not have to pay tax on income in Vietnam for public funds.
For example 50: in 2011, V Vietnam's construction company has sent workers to Laos to work at a company's work in Laos in the entire 12-month period. Income from the salary of workers due to work in Laos will not be subject to taxation in Vietnam.
5. The individual's employment on ships, boats, aircraft (crew, crew) in international transport activity of the enterprise is resident or based real operating in Vietnam will have to pay tax on income in Vietnam.
For example 51: the company S is Vietnam's sea transport business has hired a crew and troop ships is alien to international transport route China-Beautiful Singapore, the company's obligation to deduct individual income taxes according to the law of Vietnam for salaries paid to individuals is a member Corps of men although this is a salary account part of the cost of chartering.
The tax rules for income from dependent personal services as outlined in the terms of the personal service activities dependent (usually the article 15) of the agreement.
Section 11 INCOME FROM REMUNERATION Executive Director 32. The definition of income from remuneration of Directors under the provisions of the agreement, the remuneration of Directors is revenue due to a resident of the country object signed the agreement with Vietnam get in Vietnam as members of the Board of Directors of the company, the Board of the company or the person who holds the position of Senior Manager in a business that is the subject of Vietnam; and vice versa. This income does not include the salary due to the members on the received from the exercise of other functions in the business as employees, consultants, advisers and salaries of the foreign personal holding positions in the representative offices of foreign companies in Vietnam. The regular income that is considered income from dependent personal services (as defined in section 10. Income from dependent personal services, chapter II, of this circular).
Article 33. Define obligations for income tax from the remuneration of Directors under the provisions of the Convention, the individual case is subject to residence in the country signed the agreement with Vietnam received remuneration as members of the Board of Directors of the company, the Board of the company or the person who holds the senior management in the company is the object resides of Vietnam, that individual would have to pay tax for which according to the provisions of the personal income tax in Vietnam (irrespective of the individual that was in Vietnam or not).

For example 52: A resident of England object is a member of the Board of a joint venture in Vietnam. In 2012, that object only to Vietnam to work with a total of 60 days and receive remuneration as members of the Board. The base agreement between Vietnam and Britain and the provisions of the law of personal income tax in current Vietnam, this object to the personal income tax with regard to remuneration received as members of the Board with the current tax rate in Vietnam (20%) on the total income received by non-resident subjects of Vietnam.
The tax rules for income from remuneration of Directors as stated in the provisions on remuneration of Directors (usually the article 16) of the agreement.
Section 12 of the INCOME FROM the ACTIVITY PERFORMED by ARTISTS and ATHLETES to article 34. The definition of income from activities performed by artists and athletes under the provisions of the agreement, income from activities performed by artists and athletes is income from performing arts activities, sport in Vietnam of the artist herself, is subject to residence in the country signed the agreement with Vietnam; and vice versa.
Article 35. Determine tax obligations for income from activities performed by artists and athletes 1. Despite the provisions in items 9. Income from independent professions and activities section 10. Income from dependent personal activities, chapter II, of this circular, the individual case is the subject of the country signed the agreement with Vietnam conduct performing arts activities, sport in Vietnam and received the income from the activity performed which then will have to file income taxes according to the law of Vietnam.
For example 53: in 2012, at the invitation of the company performing the V of Vietnam a singer is the subject of South Korea had a concert in Vietnam and receive compensation is 500,000,000 contract. Singer-time presence in Vietnam to join the wave of performers is 3 days. Under the provisions of the agreement between Vietnam and South Korea (paragraph 1, article 17: artists and athletes) this singer has the obligation to pay tax on personal income in Vietnam.
2. Despite the provisions of items 2. Income from business activities, item 9. Income from independent professions and activities section 10. Income from dependent personal activities, chapter II, of this circular, in the case of income from performing arts activities, sport in Vietnam of the individual is the subject of the country signed the agreement with Vietnam are not charged for the individual performances that pay for others that income will have to pay tax in Vietnam under the provisions of the law of Vietnam.
For example 54: Also with the example above, 53 South Korean singer to perform in Vietnam on the basis of the contract (to be negotiated and signed in Korea) between the performing company V of Vietnam and Korea's star companies. Under the provisions of the agreement between Vietnam and South Korea (Paragraph 2, article 17: artists and athletes) corporate earnings stars from this contract will be subject to corporate income tax in Vietnam.
3. in case of performing arts activities, sport of the individual, the company is subject to residence in the country signed the agreement with Vietnam was made within the framework of the program of cultural exchange between the two Governments, the income from operations performed in Vietnam of the individual , foreign companies will be tax free in Vietnam if in agreement between Vietnam and countries that have such regulations.
For example 55: in 2012, within the framework of cultural exchange was signed between the Government of Vietnam and the Government of South Korea, a singer is the subject of South Korea had a concert in Vietnam and receive compensation is 500,000,000 contract. Under the provisions of the agreement between Vietnam and South Korea (paragraph 3, article 17: artists and athletes) this singer has no obligation to pay tax on personal income in Vietnam.
The tax rules for income of artists and athletes as above stated in terms of artists and athletes (usually article 17) of the agreement.
Section 13 of the INCOME FROM PENSION FUNDS Article 36. The definition of income from pension funds as stipulated in the agreement, the income from pension funds pension funds is due to the object of the country signed the agreement with Vietnam received from work previously done in Vietnam; and vice versa. Income from pension funds specified in article does not include government pension funds, local government agencies of Vietnam and the country signed the agreement with Vietnam to pay because the earnings are considered income from active government service (specified in section 14 Active: income from government service, chapter II, of this circular).
Article 37. Determine tax obligations for income from pension funds depending on the particular agreement, income is the amount of pensions will be subject to tax Only in the country where a): the object receiving pensions is resident object; or b) Only in countries where pension funds are charged; or c) simultaneously in the country of residence of the subject receiving pensions and pension sources arise in the country if the object charged pension is subject to residence or permanent basis is in that country.
For example 56: Mr F is a French citizen and worked for the private sector in France, in retirement to live in Vietnam. According to the provisions of article 17: Pension Funds, agreements between Vietnam and France, income from pension funds receive from France will only be taxed in Vietnam regardless of money that pension due to retirement of France.
For example 57: Mr. M was a citizen of Oman and work for the private sector in Oman. During the time worked, he M closed retirement insurance for retirement insurance Fund of the Government of Oman, when retired to live in Vietnam. Under the provisions of clause 2, article 19: Amount of pensions and social insurance payments, agreements between Vietnam and Oman, income from pension funds receive this retirement insurance fund pay will only be taxed in Oman.
For example: he's 58 M is an object resides in Denmark and working for the private sector in Denmark, when retired to live in Vietnam. According to the provisions of article 18: Pension Funds and similar funds, the agreement between Vietnam and Denmark, income from pension funds receive from Denmark will be taxed in Vietnam and Denmark if the law of the country of Denmark has prescribed taxes to pension funds.
The tax rules for income from pension funds as outlined in the terms of pension Money (usually the Article 18) of the agreement.
Section 14 INCOME FROM ACTIVE GOVERNMENT SERVICE Article 38. The definition of income from active government service under the provisions of the agreement, income from active government service is the earnings the wages, salaries, wages and pensions by the Government, the local authorities of a Country signed the agreement to pay for an individual to the person that performs the task for the country to sign it.
Article 39. Determine tax obligations for wage income from active government service 1. Alien cases due to the country's Government signed the agreement with Vietnam to Vietnam to work for the institutions of the Government of that country in Vietnam or to the program of economic cooperation, culture, aid between the two countries, the wages, the wages paid by foreign Governments to individuals that will be tax free income in Vietnam although section because purpose of performing the work such that it became the subject of Vietnam.
For example 59: Mr J is a Japanese citizen to work for JICA (Japanese Government) in Vietnam. The income from his salary J during work in Vietnam will be exempt from personal income tax in Vietnam (Paragraph 1.a, article 19, agreements between Vietnam and Japan).
2. Salaries, wages due to a State Government signed the agreement with Vietnam will be taxed only in Vietnam if it is paid to an individual who is the subject of Vietnam to carry out the work for foreign Governments in Vietnam and this individual satisfies one of the two following conditions : a) Vietnam nationals; or b) Was the subject of Vietnam before taking the job in Vietnam serving a foreign Government.
For example 60: he is a citizen of Vietnam to work for JICA (Japanese Government) in Vietnam. The income from his salary V during work at JICA Vietnam will be subject to personal income tax in Vietnam under the provisions of the law on personal income tax of Vietnam (clause 1. b (i), article 19, agreements between Vietnam and Japan).
Article 40. Determine the tax obligation for pension money income from active government service When an individual receives money in pensions are paid from a Fund in Vietnam by the State or local government agencies of Vietnam established (hereinafter referred to as the State of Vietnam), or be paid by the State of Vietnam due to previous job for the State of Vietnam the amount of this pension would only bear the tax in Vietnam; unless the individual is both the object of the country signed the agreement with Vietnam and the country's citizenship just signed it. In case the individual is both the object of the country signed the agreement with Vietnam and the country's citizenship, signing it, the money income of individual pensions taxable in that country will only signed it.
For example 61: he is a citizen of Vietnam to work for the Government of Vietnam. In retirement, Mr. V at Japan. When that pension funds, so jobs for the Government of Vietnam will be exempt from personal income tax in Japan (item 2., a., article 19, agreements between Vietnam and Japan).
Example 62: Mr J is a Japanese citizen working for the Embassy of Vietnam in Japan. In retirement, Mr J still living in Japan When that pension funds, so jobs for the Government of Vietnam will only bear the personal income tax in Japan (item 2. b. , Article 19, agreements between Vietnam and Japan).
Article 41. Determine tax obligations for income wages and salaries retirement from government business operations

Despite the provisions in articles 39 and 40 above, the taxes for the wages, the wages or pension money by a foreign Government to pay for a personal because engaging the business activities of a foreign Government in Vietnam as operations of railway transport enterprises postal, or performing State companies will be applied according to the regulations, depending on the case, in section 10. Income from dependent personal activities, item 11. Income from remuneration of Directors, item 12. The income of artists and athletes and section 13. Income from pensions, chapter II, of this circular.
The tax rules for income from active government service as outlined in the terms of service of government activity (usually the article 19) of the agreement.
Items of INCOME of 15 students, INTERNS and STUDENTS LEARN the PROFESSION Article 42. The definition of income students, interns and students learn the profession as defined in the agreement, the income of students, interns and students foreign apprenticeships in Vietnam served for study, research, apprenticeship in Vietnam, in the scope of this provision only covers : 1. Income received from overseas sources to serve the purpose of study, living in Vietnam.
2. Income received from work in Vietnam have directly related to learning activities, research, education in Vietnam (in the case of treaty provisions). In some, this income tax exemption only within a certain income level.
43 things. Determine tax obligations for income of students, interns and students vocational student, trainee, foreign students just before to the Vietnam study, research, apprenticeship is the object of the country signed the agreement with Vietnam, student, trainee foreign students, which will be tax free income in Vietnam for the types of income specified in article 42.
For example 63: a student is subject to residence of China to Vietnam to study the folk art in the four-year period. During the study period in Vietnam, he received 800,000 VND/month from China to teach Mandarin Chinese for a school in Hanoi with earning 50 dollars per month and join the Vietnam folk arts performances with a total 2,500 us dollars per year. Under the provisions of the agreement between Vietnam and China (article 20 students, apprentices and student trainee), students are free of personal income tax with the scholarship money, income from performances in the range of 2,000 us dollars; and income tax for income from teaching and its surpassing over 2,000 u.s. dollars of income.
The tax rules for income of students, trainees, vocational school students as outlined in the terms of student, trainee and apprentice students (usually the article 20) of the agreement.
Item 16 of the INCOME of TEACHERS, professors and Research 44. The definition of income for teachers, professors and researchers In a number of agreements have provisions on the processing of own taxes for income of teachers, professors and foreign research from teaching, presentations, research in Vietnam. This income includes income arising from the activities of teaching, presentations, research at the University or institution is Vietnam's Government admitted.
Article 45. Determine tax obligations for income of teachers, professors and researchers 1. The income of teachers, professors and foreign research from teaching, presentations, research in Vietnam under article 44 above will be tax free in Vietnam (during the period defined in the agreement) if the following conditions are satisfied:-Right before going to Vietnam teaching , presentation, research, teacher, Professor, who study abroad is the subject of the country signed the agreement with Vietnam; and-teaching, presentations, research conducted at the University or institution is Vietnam's Government admitted.
For example, 64: According the program links between a University V of Vietnam and a University P of Africa-Philippines, starting from the 2012 school year, the University Ward sent a teacher to teach in University V in 3 years time. The teachers will be exempt from personal income tax in Vietnam for income from teaching at the University V during 2 years since to Vietnam and will have to pay tax on personal income in Vietnam for income from teaching at the University of V in the 3rd year (clause 1 , Article 21: teachers, professors and researchers, agreement between Vietnam and the Philippines).
2. The exemption shall not apply as with the case of teaching, research and service for the purpose of a private individual or by a private organization.
For example: 65 according to the contract signed with a private hospital V of Vietnam, in the year 2012, a Professor of the subject of Africa-Philippines (as a party in the contract) to study at the hospital in December. This Professor will have to pay tax on personal income in Vietnam for income from contract research activities.
The tax rules for income of teachers, professors and researchers as above stated in terms of teachers, professors and researchers (usually article 21) of the agreement.
17 OTHER INCOME Article 46. Other income defined under the provisions of the Treaty, other income include all the earnings have not been mentioned in the other terms of the agreement, such as: income from lottery prizes, win bet at the casino, income from alimony according to the obligations of marriage family ... Article 47. Determine tax obligations with regard to other income 1. As stipulated in the agreement, an object residing in the country signed the agreement with Vietnam have other earnings from Vietnam will have to pay tax according to the provisions of the current law on taxation in Vietnam. However, in a number of treaties (such as the agreement between Vietnam and France, Britain and Vietnam), Vietnam is committed to other income tax exemption in this case.
For example: he's 66 H is an object resides in China and Mr Ward is a resident of France, object in a two-week trip in Vietnam, both were hit by 20 million lottery prize in Hanoi. According to the regulation on personal income tax of Vietnam, this is no regular income should both he has the obligation to pay tax in Vietnam for this prize money. According to the agreement between Vietnam and China (Paragraph 2, article 22 other income), Vietnam can collect taxes for his income. According to agreements between Vietnam and France (clause 1, article 20: other income), his income tax exemption for Vietnam at P.
2. in case of other income related to permanent establishments in Vietnam of a resident of water objects signed with Vietnam the Vietnam has the right to collect taxes for that income in accordance with the current law on taxation in Vietnam and in accordance with the provisions of items 2. Income from business activities and section 9. Income from the operation of the independent professions, depending on each case, chapter II, of this circular.
For example: a bank branch 67 V is the Vietnam branch of the Bank of Japan's buying a car of a company in country X and promotional winners 10,000 us dollars. This car is used for business purposes of branch V. Although according to internal policies of the Bank S, such earnings must be regarded as income of the head office and bank account S in Japan, the earnings from this bonus is still considered relevant fact to branch V-a permanent basis the S Bank in Vietnam under the provisions of the agreement between Vietnam and Japan (item 2, article 21), and so Vietnam has the right to collect taxes for income under the provisions of the current law on taxation in Vietnam and in accordance with the provisions of section 2. Income from business activities, chapter II, of this circular (article 7 of the agreement between Vietnam and Japan).
The regulations for other income as stated on the in terms of other income (usually the Article 22) of the agreement.
Chapter III MEASURES to AVOID DOUBLE TAXATION in VIETNAM under the provisions of the Treaty, when a tax payers are the subject of Vietnam, with incomes from the country signed the agreement with Vietnam and has to pay tax in the country (according to the provisions of the agreement and the law of that country) , Vietnam could still have the right to collect taxes for this earnings but Vietnam also has the obligation to implement measures to avoid double taxation to tax payers that are not being paid twice.
According to each agreement has been signed, Vietnam will implement a measure or combination of measures to avoid double taxation under the provisions of Article 48, article 49, article 50 of this circular.
Article 48. Tax deduction measures case a subject of Vietnam have already filed tax and income in the country signed the agreement with Vietnam, if in agreement, Vietnam is committed to making the tax deduction measures when objects of this residence in Vietnam income tax declaration the earnings, which will be included in taxable income in Vietnam under the provisions of the current law on taxation in Vietnam and the amount of tax already paid at the signing of the Water will be deducted from the tax in Vietnam. The tax deduction following the principles below: a) has filed Taxes in countries that are deducted as was stipulated in the agreement;
b) tax deduction does not exceed the tax in Vietnam charged on income from countries under the provisions of tax law in Vietnam but are also not deductible or tax already paid higher abroad;
c) tax already paid in the country signed the deductible tax is incurred during the tax year in Vietnam.

For example: he's A 68 is a Lao citizen and is the object of Vietnam in 2011. In 2011, says A tax income from the May 8 in Vietnam's Dong 40,000,000 and 4 months (the period from September 2011 to December 2011) in Laos is 80,000,000. Tax year of Laos from 01/10 to 30/9 the following year. Under the provisions of the agreement between Vietnam and Laos (clause 1, article 15: personal service activities) he must pay tax in Laos for income gained from the country with a tariff under the provisions of the tax Laws of the country (20%). Suppose that in addition to the specified income, Mr. A does not have other sources of income. In this case, the tax declaration and tax deductions were filed in Laos A in Vietnam as follows:-determine his taxable income for A tax year in 2011 (according to the current law on taxation in Vietnam): (40,000,000 copper + copper 80,000,000) = 120,000,000 VND-determine his income tax A tax year in 2011 (according to the current law on taxation in Vietnam) : (x + 5% copper 60,000,000 60,000,000 copper x 10%) = 9,000,000 Council-tax already paid in Laos (under the tax law of Lao): Dong x 20% = 80,000,000 16,000,000 Council-tax calculated according to the law on income arising in Vietnam, Laos: 9,000,000 Council: 12 x 4 = 3,000,000 Dong So he A deduction only 3,000,000 16,000,000 total tax on copper copper copper 80,000,000 on submission of the income the wages incurred in Laos.
For example, 69: company of Vietnam has a V permanent base in Laos. In 2010, this permanent facility be determined income is 100,000 us dollars. Under the provisions of the agreement between Vietnam and Laos (paragraph 1, article 7: business income), the V firm have obligations under the income tax law of Lao tax for the income numbers are determined by this permanent basis (tax rate of 20%). In this case, the tax declaration and tax deductions were filed in Laos of the V firm in Vietnam as follows:-determine the number of taxes already paid in Laos (Lao tax law): 100,000 dollars x 20% = 20,000 dollar-determined tax in Vietnam (according to the current legal provisions on taxation in Vietnam) : 100,000 dollars x 25% = $ 25,000-tax payable in Vietnam still: 20,000-25,000 u.s. dollars u.s. dollar = 5,000 us dollars 70 example: Also with 69 for example above, suppose V is the company joint venture and enjoy the level of corporate income tax rate in Vietnam is 10%. Meanwhile, the Declaration and the tax deduction tax already paid in Laos of the V firm in Vietnam as follows:-determine the number of taxes already paid in Laos (Lao tax law): 100,000 dollars x 20% = 20,000 dollar-determined tax in Vietnam (according to the current legal provisions on taxation in Vietnam) : 100,000 dollars x 10% = $ 10,000 the maximum tax-deduction in Vietnam: 10,000 us dollars in this case, the V firm was deducted 10,000 u.s. dollars out of a total of 20,000 us dollars tax money already paid in Laos. Part of the difference in 10,000 dollars (20,000 us dollars-10,000 us dollars) was not deducted from income tax for income from the water (if any) of the company and was not transferred to the following year.
Article 49. Tax deduction measures securities case a subject of Vietnam have income and must pay tax in the country signed the agreement with Vietnam (according to the tariff exemption or reduction as a special), if in agreement, Vietnam is committed to making stock tax deduction measures when objects that reside in Vietnam income tax declaration the earnings, which will be included in taxable income in Vietnam under the provisions of the current law on taxation in Vietnam and tax amount of the stocks will be deducted from the tax in Vietnam. Number of securities tax is tax resident of the object probably Vietnam must pay in the country signed the agreement with Vietnam on the earnings generated in the country to sign that, but according to the provisions in the laws of the signatories that are free or reduced as a special measure.
The tax deduction following the principles below: a) the taxes already paid or deemed to have been filed in the country signed be deducted must be the tax specified in the agreement;
b) tax deduction does not exceed the tax in Vietnam charged on income from countries under the provisions of tax law in Vietnam;
c) tax already paid in the country signed the deductible tax is incurred during the tax year in Vietnam.
For example, 71: Q company of Vietnam has a permanent base in U-Venice-calves-Pakistan. In 2010, this permanent facility be determined income is 100,000 us dollars. As defined in tax law at U-Venice-calves-Pakistan, this income is tax free as a special incentive measures (case not be free, will have to pay tax with tax rate of 33%). Q the company is obliged to pay tax in Vietnam according to the applicable tax rate (25%). Under the provisions of the agreement between Vietnam and the U-Venice-calves-Pakistan (Clause 5, article 24: removed the taxed twice), Vietnam is obliged to deduct tax (i.e. tax number should have to be paid but are free in U-Venice-calves-Pakistan). In this case, the tax declaration and the tax deduction the company's stock Q in Vietnam as follows:-tax identification U stock-Venice-calves-Pakistan (under tax law U-Venice-calves-Pakistan): 100,000 dollars x 33% = $ 33,000-determine the tax in Vietnam (according to the current legal provisions on taxation in Vietnam) : 100,000 dollars x 25% = $ 25,000 the company, so Q does not have to pay tax but is regarded as already paid 25,000 u.s. dollars (in a total of 33,000 us dollars calculated according to the tax law U-Venice-calves-Pakistan before perks) and this tax to the tax in Vietnam (i.e. not pay tax in Vietnam).
Article 50. Indirect deduction measures 1. The case of a resident of Vietnam objects have the income from the country signed the agreement with Vietnam which has earnings taxable business income before being divided for that object and in the accords, Vietnam is committed to making the tax deduction measures indirectly, when the income tax declaration in Vietnam the earnings, which will be included in taxable income in Vietnam under the provisions of the current law on taxation in Vietnam and of indirect taxes have been filed in the country signed will be deducted from the tax in Vietnam. However, in all cases, the tax amount deducted does not exceed the tax in Vietnam charged on income from abroad in accordance current legislation on taxation in Vietnam.
Indirect tax deductible is the amount of tax due per company is the subject of the country signed the agreement with Vietnam have filed in the country concluded that the form of corporate income tax before interest split shares for the object of Vietnam with the condition of objects to directly control Vietnam a minimum ratio of voting rights joint stock companies (usually 10%).
72 example: company V Vietnam's investment 10,000,000 u.s. dollars (equivalent to 20% of the capital shares) in the company of Russia. In 2010, the company had revenue N is 100,000 u.s. dollars and must pay tax according to the tax Laws of the Russian Federation (30%) tax rate. The company's after tax income is divided into N to the company V according to the percentage of shares and must pay taxes in Russia with a tariff of 10% (item 2 a article 10: money stock, interest rate agreement between Vietnam and the Russian Federation). V company is obliged to pay tax according to the current legal provisions on taxation in Vietnam with the applicable tax rate (25%). In this case, the tax declaration and the tax deduction the company's indirect V in Vietnam as follows:-the number of the company's profit before tax V of Vietnam enjoyed in total profits of the company in the Russian Federation N is: 100,000 dollars x 20% = $ 20,000-corporate income tax the company N has filed in the Russian Federation for the the profit of the company tax law V Russia is: 20,000 us dollars x 30% = 6,000 us dollars-the return of the shares of the company's after tax divided V is: 20,000 us dollars-6,000 us dollars = 14,000 us dollars-company tax Number V is filed in Russia for the return of shares be divided by agreement between Vietnam and Russia are : 14,000 us dollars x 10% = $ 1,400 – total tax payable V company in Russia (including direct taxation by the company V filed on indirect taxes and dividends by the company N the company's investment income on the company filed V) 1,400 us dollars + 6,000 = 7,400 u.s. dollars u.s. dollar-corporate tax amount payable in V Under the current law regulations on taxation in Vietnam is: 20,000 us dollars x 25% = 5,000 u.s. dollars in this case, company V the maximum deduction only is 5,000 u.s. dollars in total to 7,400 u.s. dollars already paid in Russia. Part difference 2,400 dollars (7,400 us dollars-5,000 us dollars) not allowed tax deduction for income in the country (if any) of the company. Though according to the rules above, Vietnam made only indirect tax deduction measures when there is a commitment in the agreement, but if in accordance with the law of Vietnam, the earnings from abroad of a Vietnam resident objects are indirect tax deduction, the regulations still to be done.
For example 73: Also with 72 for example above, suppose the investment into the company N in Russia is a direct investment projects abroad by the company V in accordance with the law of Vietnam despite the company's investment rate V occupies less than 10% of the capital stock of the company N but the indirect tax deduction measures still to be implemented ( Point 21, article 7, chapter II, circular No. 123/2012/TT-BTC on 27/7/2012 of the Ministry of Finance shall guide the implementation of some articles of the corporate income tax law No. 14/2008/QH12 and guiding the implementation of Decree No. 124/2008/ND-CP on December 11, 2008, Decree No. 122/2010/ND-CP dated 27/12/2011 the Government detailing the implementation of a number of articles of the income tax act business) Although the agreement between Vietnam and the Russian Federation (Paragraph 2, article 11: measures to avoid double taxation) are not regulated.

Despite the above about the implementation of measures to avoid double taxation, but if under the provisions of the agreement, the earnings from a foreign resident of Vietnam are tax-exempt in Vietnam, then earnings will be tax free and no tax was filed in foreign countries (i.e. only taxed once and not apply double taxation avoidance measures). For example the amount of scholarship students and foreign students in school time in Vietnam (15 Items. The income of students, interns and students learning trades, chapter II, of this circular).
The provisions of the double taxation avoidance measures as outlined in the terms of double taxation avoidance measures (usually Article 23) of the agreement.
Chapter IV RESPONSIBILITIES and POWERS of the COMPETENT AUTHORITIES Article 51. The competent authorities under the provisions of the Convention, the competent authorities of the tax agreement in Vietnam is the Minister of finance or the authorized representative of the Minister of finance.
Minister of Finance Tax Administration authorization for performing the tasks and powers specified in article 52.
Article 52. The responsibility and authority of the tax administration in the implementation of the provisions of the agreement to implement the provisions of the agreement, the total tax to be Minister of finance authorized to perform the duties and authority to: 1. Issuing written notice effective or terminate the effect of each treaty in the field of taxation after the reported effect of Ministry of Foreign Affairs;
2. Organization direction and guidance, test, inspection of the Tax Bureau, Tax Bureau and other organizations collect credentials in the implementation of the agreement;
3. The "competent authorities" of Vietnam in handling the work related to the Convention, including: a) to research and solve the disputes, complaints, Petitions and related problems in the process of implementing the agreement with the competent authorities of the country signed the agreement with Vietnam through the implementation of bilateral agreements the procedure stipulated in the agreement;
b) to exchange information with foreign tax authorities, extraction of information by the tax authorities abroad to provide and are responsible for maintaining the confidentiality of information under the provisions of the Treaty;
c) implement measures to support the administration of taxes under the provisions of the agreement and in accordance with the provisions of the law of Vietnam.
Chapter V IMPLEMENTATION Article 53. This circular effect since June 2 2014, replacing circular No. 133/2004/TT-BTC dated 31 December 2004 of the Ministry of Finance shall guide the implementation of the agreement on avoiding double taxation with respect to taxes on income and property between Vietnam and countries effective enforcement in Vietnam. The procedures for applying the agreement made under the provisions of the law on tax administration and the current Guide text.
In the process if there are obstacles, suggest that the agencies, organizations, personal reflections in time about the Ministry of finance to study the resolution./.