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THE MINISTRY OF
FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 52/TC-TCT
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Hanoi, August 16,
1997
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CIRCULAR
GUIDING THE
IMPLEMENTATION OF THE TREATIES ON AVOIDANCE OF DOUBLE TAXATION BETWEEN VIETNAM
AND OTHER COUNTRIES
Pursuant to the current laws on profit tax,
corporate income tax, income tax on high-income earners and tax on foreign
investment in Vietnam;
In furtherance of treaties on avoidance of double taxation between Vietnam and
other countries which have entered into force in Vietnam;
The Ministry of Finance hereby guides the implementation of a number of
provisions of the above-said treaties on avoidance of double taxation
(hereafter referred to as treaties), as follows:
I. SCOPE OF REGULATION OF THE TREATIES
1. Tax payers regulated by the treaties:
The treaties on avoidance of double taxation
shall apply to subjects who are residents of Vietnam and other countries, which
have signed such treaties with Vietnam, including: taxable individuals,
companies and organizations in Vietnam and in the countries which have signed
treaties with Vietnam on their entire revenues or assets, based on the criteria
of their domiciles, places of residence, time of residence, management offices,
registered offices, places of establishment of such business organizations or
on any other similar criteria.
The General Department of Taxation hereby
provides concrete guidances to establish the bases for determining the taxable
objects under the above-said provisions.
2. Territory:
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3. Taxes covered by the treaties:
3.1. The treaties shall apply only to profit or
income taxes levied or likely to be levied in the future by Vietnam and the
signatory countries.
In Vietnam, the taxes payable under the treaties
include:
a/ The profit tax under the Law on Profit Tax,
the Law on Corporate Income Tax, the Law on the Promotion of Domestic
Investment, the Law on Foreign Investment in Vietnam and the Law on Petroleum;
b/ The income tax on high-income earners;
c/ The tax on profit remittance abroad under the
Law on Foreign Investment in Vietnam;
d/ The royalty tax;
e/ The profit tax on foreign shipping companies
operating in Vietnam;
f/ The profit tax on foreign contractors
operating in Vietnam outside the forms defined in the Law on Foreign Investment
in Vietnam;
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h/ The kinds of profit tax and income tax other
than or similar to the taxes mentioned in Points (a) to (g) above, which are to
be levied in Vietnam (if any).
3.2. In addition to the taxes on profit or
income as mentioned above, a number of treaties on avoidance of double taxation
which Vietnam has signed with other countries shall also apply to taxes on
equities. Where double taxation on equity arises between Vietnam and a
signatory country, the Ministry of Finance shall provide specific guidance
thereon.
3.3. Other taxes such as: turnover tax,
value-added tax, special consumption tax, export tax and import tax, shall not
be regulated by the treaties.
4. The basis for the calculation of tax, tax
rates and the provisions on tax exemption and reduction under the treaties
which are applicable to residents of Vietnam and of the countries which have
signed the treaties with Vietnam shall be determined in accordance with the
specific provisions of each treaty.
The General Department of Taxation shall provide
concrete guidance for the implementation of these regulations.
II. ORGANIZING THE IMPLEMENTATION OF THE
TREATIES:
In order that the provisions of the treaties on
avoidance of double taxation which Vietnam has signed with other countries are
properly and fully enforced, the Ministry of Finance provides the following for
the organization and guidance for enforcement of the treaties:
1. Tasks and powers of the General Department of
Taxation in enforcing the treaties:
Under the provisions of the treaties, all
signatory countries shall have to nominate their respective representatives
(referred to as competent agencies) to handle matters related to the
enforcement of the treaties. For its part, the Vietnamese Government has
assigned the Minister of Finance to act as the competent authority of Vietnam.
In order to implement the provisions of the treaties, the Minister of Finance
authorizes the General Director of the General Department of Taxation to
perform the following tasks:
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b/ To prepare documents explaining and guiding
the implementation of provisions of the treaties;
c/ To organize, direct, guide and supervise the
tax departments and organizations authorized to collect tax in implementing the
treaties;
d/ To study and conduct negotiation with
competent authorities of the countries which have signed the treaties with
Vietnam on disputes, protests arising in the course of implementation of the
treaties which require the settlement by bilateral agreements in accordance
with provisions of the treaties;
e/ To exchange information with foreign tax
agencies as prescribed by the treaties;
f/ To certify vouchers of tax payment in Vietnam
for foreign organizations and individuals (upon request) for their tax deduction
abroad;
g/ To issue residence permits to residents of
Vietnam upon the requests of organizations and individuals.
2. The procedures for tax reimbursement under
the treaties:
In cases when a subject has paid tax into the
State budget in accordance with the tax laws of Vietnam, but who, under the
provisions of a related treaty, is not liable to tax or that has overpaid the
tax amount payable in Vietnam, they shall be entitled to request or authorize
one of their lawful representatives to request the Ministry of Finance to
reimburse the tax amount already paid. In such case, the Ministry of Finance
shall guide the procedures and dossier for the tax reimbursement, as follows:
2.1. Such subject shall have to submit to the
General Department of Taxation (under the Ministry of Finance) a dossier for
tax reimbursement comprising:
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b/ The residence permit of the country of
residence issued by the tax agency;
c/ A notarized copy of the business license, if
it is an organization, or a copy of passport, if it is an individual;
d/ The original of the tax payment voucher;
e/ The authorization contract notarized by the
State public notary or certified by the People�s Committee of the competent
level, for a person authorized by the subject;
f/ The other vouchers and documents to be used
as basis for tax reimbursement as required by the tax agency.
2.2. The General Department of Taxation shall
examine the tax reimbursement dossiers in accordance with the treaties, then
submit them to the Ministry of Finance for decisions on tax reimbursement.
2.3. Basing itself on the decisions of the
Ministry of Finance on the tax reimbursement to the tax payers, the Department
of State Budget shall carry out procedures for the tax reimbursement. In cases
where a tax reimbursement is made in foreign currency(ies) or remitted into an overseas
account upon the request of the tax payer, the Department of State Budget shall
carry out procedures for payment in accordance with the current regime on State
budget expenditures in foreign currency(ies).
2.4. Within 60 days after receiving in full the
tax reimbursement dossiers, the Ministry of Finance shall complete the
procedures for tax reimbursement or reply in writing.
3. Settlement of complaints:
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3.1. Such subject can lodge a complaint according
to the procedures prescribed by the Vietnamese law as well as provisions of the
tax laws of Vietnam on complaints settlement.
3.2. Such subject can directly lodge a complaint
to the General Department of Taxation (under the Ministry of Finance) without
following the complaint-settling procedures mentioned in Point 3.1 above.
Such complaint shall be settled within a time
limit prescribed in the provision of the treaties on "the bilateral
agreement procedures".
3.3. Vietnam’s General Department of Taxation
shall, on behalf of the Ministry of Finance, consider and settle complaints.
When necessary, the General Department of Taxation of Vietnam shall negotiate
with the competent authorities for the treaties of other countries which have
signed treaties with Vietnam to settle such complaints through bilateral
agreements.
3.4. Vietnam’s General Department of Taxation
shall have to coordinate with the competent authorities for the treaties of
other countries which have signed such treaties with Vietnam in settling the
tax complaints lodged by residents of such countries in accordance with the
provisions of the treaties.
4. Implementation provisions:
This Circular takes effect after its signing.
FOR THE MINISTER OF FINANCE
VICE MINISTER
Vu Mong Giao
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