Vietnam Tax Treaties with Taiwan

Email: han4ww@evershinecpa.com
or
Contact us by WeChat or Skype or WhatsApp in the day-work-time of Taiwan (GMT+8)
The Engaging Manager from Headquarter
Ms. Judy Wang, CPA(Taiwan) Speaks in both English and Chinese.
WeChat: Judy_Evershine
skype: Judy Wang

Tw-Q-10:
台灣母公司在越南 是否可以依DTA申請沒有常設機構(PE)下零稅率?
Taiwan Parent Company, can apply for zero tax rate without PE under DTA in Vietnam?

Tw-A-10:

Yes.
Taiwan has DTA with Vietnam, and if Taiwan Legal Resident company is without PE (Permanent Establishment), it will be redeemed as “non-Vietnam Domestic Sourced Income”.
That means Vietnam will levy zero-tax.
However, Taiwan Legal Resident company still needs to send the zero-tax application to Vietnam Tax Bureau for being approval.

Tw-Q-20:
台灣母公司在越南設立了越南子公司， 台灣母公司替子公司服務收入能否申請零稅率?
When Taiwan Parent Company as an Investor, set up a Vietnam subsidiary, and provide services from Taiwan to Vietnam Subsidiary, can apply for zero tax rate without PE under DTA in Vietnam?

Tw-A-20:
According to DTA Article 5 item 7, A Vietnam subsidiary will not be treated as PE of Taiwan Parent company as an investor because it is a separate legal entity.
That means if a Vietnam Subsidiary pay service fee to Taiwan Parent Company through service contract signed between subsidiary and Taiwan Parent company
as an investor, Taiwan Parent Company can apply zero tax.
As for if the paid amount is reasonable, it will get involved TP (Transfer Pricing) judgment by Vietnam Tax Bureau.

Tw-Q-30
越南依DTA沒有PE下零稅率申請的程序為何?
What is the procedure for Vietnam to apply for a zero tax rate under DTAA without PE?

Tw-A-30
According to Circular 28/2011/TT-BTC (Article 18), the Vietnamese party shall submit the following documents to the tax authorities 15 days before the deadline of tax declaration to notify the exemption under DTA.
*Notice of eligibility for tax exemption/ reduction (form No. 01/HTQT)
*Certificate of residence granted by a tax agency of the country of residence.
*Business registration certificate or tax registration certificate granted by the country of residence.
*Contracts signed with Vietnamese organizations which are certified by the taxpayer.
All supporting documents must be in Vietnamese or translated into Vietnamese.
Refer to the below website for further details:
https://thuvienphapluat.vn/van-ban/Thue-Phi-Le-Phi/Circular-No-28-2011-TT-BTC-guiding-a-number-of-articles-of-the-Law-on-Tax-Admin-125613.aspx

Tw-Q-40
台灣母公司有越南來源所得的各項所得扣繳稅率為何?
When Taiwan Resident company having Vietnam domestic sourced income, what are the withholding tax rates for various incomes in Vietnam?

Tw-A-40:
Taiwan has DTA with Vietnam, and if you are with PE (Permanent Establishment) in Vietnam, your income will be considered as Vietnam domestic sourced income.
As for levying Tax Rate, please be aware:
if Vietnam Tax rate > DTA Rate, adopt DTA Rate; if Vietnam Tax rate < DTA Rate, adopt Vietnam Rate.

If DTA is applied, the DTA rates between Taiwan and Vietnam are as below:

*Business profits (without PE) will be considered as non-Vietnam sourced income with zero tax, please refer TW-Q10.

*The withholding tax rate under domestic law may apply rather than the treaty rate where the domestic law rate is lower than the treaty rate.

*No tax is imposed on dividends paid to nonresident corporations under Vietnamese domestic law.

Tw-Q-50
當台灣稅務居民有越南來源所得，依DTA優惠稅率申請的程序為何?
When Taiwan Tax Resident having Vietnam domestic sourced income, what is Vietnam’s application procedure based on the DTA preferential tax rate?

Tw-A-50:
According to Circular 28/2011/TT-BTC (Article 18), the Vietnamese party shall submit the following documents to the tax authorities 15 days before the deadline of tax declaration to notify the exemption under DTA.

*Notice of eligibility for tax exemption/ reduction (form No. 01/HTQT)

*Certificate of residence granted by a tax agency of the country of residence.

*Business registration certificate or tax registration certificate granted by the country of residence.

*Contracts signed with Vietnamese organizations which are certified by the taxpayer.
All supporting documents must be in Vietnamese or translated in Vietnamese.
Refer to the below website for further details: –

https://thuvienphapluat.vn/van-ban/Thue-Phi-Le-Phi/Circular-No-28-2011-TT-BTC-guiding-a-number-of-articles-of-the-Law-on-Tax-Admin-125613.aspx
Summary of Tax Treaty between Vietnam and Taiwan

The Vietnam Economic and Cultural Office in Taipei and The Taipei Economic and Cultural Office in Hanoi concluded and signed an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (Double Taxation Agreements, DTA), on 06 April 1998 and takes effect from 06 May 1998.

Permanent Establishment

Article 5 states the term permanent establishment (PE) means a fixed place of business which generally includes the followings:

*A place of management

*A branch

*An office

*A factory

*A workshop

Withholding Tax

*Article 7 of DTA between Vietnam and Taiwan explained, Vietnam may not tax payments on business profits rendered by Taiwanese corporations unless it is attributable to the permanent establishment situated in the relevant territory.

*In Article 10, dividends paid by a Vietnamese Resident enterprise to Taiwan Resident enterprise, the tax charged shall not exceed 15% of the gross dividends. However, domestic law may apply rather than the treaty rate where the domestic law rate is lower than the treaty rate. No tax is imposed on dividends paid to non-resident corporations under Vietnamese domestic law.

*Article 11 states that where the beneficial owner of the interest (excluding interest from the government) is a non-resident, shall be taxed in the territory in which it arises at the rate not exceeding 10% of the gross interest. The rate of withholding tax under domestic law may apply rather than the treaty rate where the domestic law rate is lower than the treaty rate.

*Article 12 explained royalties means payment for the use of, right to use, copyright of literary, artistic, or scientific work, information concerning the industrial, commercial, or scientific experience. Payment for royalties is taxed at 15%. The rate of withholding tax under domestic law may apply rather than the treaty rate where the domestic law rate is lower than the treaty rate.

*Technical services rendered are covered by the business profits article. Vietnamese corporations may not tax payments for technical services rendered by a Taiwanese enterprise unless it is attributable to PE. Technical services rendered in an independent capacity should be covered in Article 14 (see professional services) instead.

*A professional service is defined to include an independent professional such as physicians, lawyers, engineers, architects, dentists, and accountants. Vietnam may not tax payments rendered by Taiwanese residents unless it is attributable to a fixed base that the Taiwanese resident has for performing his/ her activities.

Elimination of Double Taxation

Article 23 of the DTA states that double taxation shall be eliminated by allowing tax credit to be made available to the home resident territory. It shall be credited against the tax levied in the first-mentioned territory on that resident. However, the amount of credit shall not exceed the amount of the tax in the first-mentioned territory.

Exchange of Information

Article 26 states that the competent authorities of the territories shall exchange such information relevant to the provision of this Agreement.

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Hanoi Evershine BPO Service Limited Corp.
E-mail: han4ww@evershinecpa.com
or
Contact us by WeChat or Skype or Whatsapp in the day-work-time of Vietnam  (GMT+8)
The Engaging Manager from Headquarter
Ms. Judy Wang, CPA(Taiwan) Speaks in both English and Vietnamese.
WeChat: Judy_Evershine
skype: Judy Wang

or
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please send an email to HQ4han@evershinecpa.com
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(version: 2024/07)
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