On December 24, 2013, the Ministry of Finance issued the Circular No. 205/2013/TT-BTC guiding the implementation of the Agreement on double taxation avoidance and prevention of tax evasion to taxes and assets between Vietnam and other countries and territories taking effective in Vietnam.
In accordance with this Circular, in cases where there are disparities between the provisions of the Agreements and those of domestic tax laws, the provisions of the Agreements shall apply. The Agreements shall not create new tax obligations or tax obligations that are different from or heavier than those prescribed by the domestic tax laws. Where an Agreement contains provisions under which Vietnam is entitled to tax a certain type of income or a certain tax rate but Vietnam’s tax law has not yet provided for the taxation of such income or provides for a lower rate, Vietnam’s tax law shall apply, it means non-collection of duty or collection of duty at the lower rate.
Besides, the Vietnamese taxation agencies shall refuse the request for application of Agreement in the cases such as the proposing person wishes apply Agreement for a tax which has arisen than three year before time of request for application of Agreement; when principal purposes of contracts or agreements are subjects entitled to tax exemption or reduction under Agreement; the proposing person for application of Agreement is not beneficial owner incomes involving the tax amounts which are requested exemption, reduction under Agreement. The beneficial owner may be an individual, a company, or an organization but it must be subject entitled to own and control incomes, assets, or rights creating incomes and so on.
This Circular takes effect on February 06, 2014 and replaces Circular No. 133/2004/TT-BTC dated December 31, 2004
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