Circular 95/2026/TT-BTC guiding double taxation avoidance agreements, mutual agreement procedure, and advance pricing agreement mechanism

CIRCULAR

Guiding the implementation of the Agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and property between Vietnam and other countries and territories in force in Vietnam; the implementation of mutual agreement procedure; and the application of the advance pricing agreement mechanism in tax administration for enterprises having related-party transactions

Pursuant to the Law No. 108/2025/QH15 on Tax Administration;

Pursuant to the Law No. 108/2016/QH13 on Treaties, which was amended and supplemented by the Law No. 137/2025/QH15;

Pursuant to the Government’s Decree No. 252/2026/ND-CP detailing a number of articles of, and measures for organizing and guiding the implementation of, the Law on Tax Administration;

Pursuant to the Government’s Decree No. 320/2025/ND-CP detailing a number of articles of, and providing measures for guiding the implementation of, the Law on Corporate Income Tax;

Pursuant to the Government’s Decree No. 255/2026/ND-CP on prescribing tax administration of transactions with related parties of enterprises having transactions with related parties;

Pursuant to the Government’s Decree No. 253/2026/ND-CP detailing a number of articles, and providing measures to organize and guide the implementation, of the Law on Personal Income Tax;

Pursuant to the Government’s Decree No. 29/2025/ND-CP, defining the functions, tasks, powers and organizational structure of the Ministry of Finance, which was amended and supplemented by the Government's Decree No. 166/2025/ND-CP;

Implementing the Agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and property between Vietnam and other countries and territories in force in Vietnam;

Implementing the Agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income between Vietnam and other countries and territories in force in Vietnam;

Implementing the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting;

Implementing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters;

At the proposal of the Director of the Department of Taxation;

The Minister of Finance hereby promulgates the Circular guiding the implementation of the Agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and property between Vietnam and other countries and territories in force in Vietnam; the implementation of mutual agreement procedure; and the application of the advance pricing agreement mechanism in tax administration for enterprises having related-party transactions.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular guides the following contents:

1. Implementation and processing of dossiers for application of Agreements for the avoidance of double taxation, treaties and other forms prescribed at Point a Clause 2 Article 58 of the Government’s Decree No. 252/2026/ND-CP detailing a number of articles of, and measures for organizing and guiding the implementation of, the Law on Tax Administration.

2. Implementation of the mutual agreement procedure under Tax Agreements (hereinafter referred to as MAP) prescribed in Clause 3 Article 30 of the Law on Tax Administration No. 108/2025/QH15 and at Point a Clause 2 Article 58 of Decree No. 252/2026/ND-CP.

3. Application of the Advance Pricing Agreement mechanism in tax administration for enterprises having related-party transactions (hereinafter referred to as APA) prescribed in Clause 3 Article 30; Clause 2 Article 31 of the Law on Tax Administration No. 108/2025/QH15 and at Point a Clause 2 Article 58 of Decree No. 252/2026/ND-CP.

4. Principles for provision of tax collection assistance prescribed at Point c Clause 1 Article 47 of Decree No. 252/2026/ND-CP.

Article 2. Subject of application

This Circular applies to:

1. Subjects of application of Tax Agreements, MAP and APA prescribed in Clause 1 Article 8, Clauses 1 and 2 Article 54 and Article 66 of this Circular.

2. Tax agencies prescribed at Point a Clause 2 Article 2 of Decree No. 252/2026/ND-CP.

3. Other relevant state agencies, organizations and individuals implementing Tax Agreements and applying MAP and APA.

Article 3. Interpretation of terms

1. Agreements for the avoidance of double taxation (hereinafter referred to as Tax Agreements) include Agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and property; Agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income, and related instruments constituting, amending or supplementing Agreements for the avoidance of double taxation.

2. Other tax-related treaties include the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting; the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and related instruments constituting, amending or supplementing other tax-related treaties.

3. Subjects include individuals, companies and any organization of individuals, companies or other entities as prescribed in an Agreement for the avoidance of double taxation to which Vietnam is a party.

4. Company means any legal person or any entity that is treated as a legal person for tax purposes in accordance with the laws of Vietnam and the Contracting Party.

5. The competent authority of Vietnam means the Minister of Finance or a representative authorized by the Minister of Finance in accordance with the laws of Vietnam.

6. Contracting Party means a country or territory that has concluded a Tax Agreement with Vietnam.

Article 4. Principles of application

1. Principles of application of Tax Agreements

a) The application and determination of tax obligations in each case must be pursuant to the specific provisions of the relevant Tax Agreement and other tax-related treaties;

b) In case there are disparities between the provisions of a Tax Agreement and those of domestic tax laws, the provisions of the Tax Agreement shall prevail. The Tax Agreements do not create new tax obligations or tax obligations that are different from or heavier than those prescribed by the domestic tax laws;

c) When applying a Tax Agreement, terms shall be interpreted in accordance with the provisions of the Tax Agreement. In case a term is not defined in the Tax Agreement, such term shall be interpreted in accordance with the laws of Vietnam applicable to the taxes covered by the Tax Agreement at the time of application. In case such term is prescribed differently in tax laws and other laws, the provisions of tax laws at the time of application shall apply.

In case a term is not defined in the Tax Agreement and is not prescribed by the laws of Vietnam, the competent authority of Vietnam and the Contracting Party shall consult with each other and agree upon its interpretation for application.

2. Principles of application of MAP and APA

a) MAP shall be applied on the basis of the provisions of Tax Agreements; ensure taxpayers’ rights; be independent of complaint settlement procedures under domestic laws; be implemented on the basis of goodwill and cooperation between the competent authorities, ensure information confidentiality and aim to eliminate double taxation in conformity with Tax Agreements;

b) The analysis, comparison and selection of independent comparables and methods for determining prices of related-party transactions covered by APA and MAP relating to related-party transactions shall comply with the Government’s Decree No. 255/2026/ND-CP on tax administration for related-party transactions of enterprises having related-party transactions. The use of databases for the application of APA shall comply with the Law on Tax Administration No. 108/2025/QH15.

Article 5. Rights and obligations of taxpayers requesting application of Tax Agreements, MAPs and APAs

1. Taxpayers have the following rights:

a) To receive support, guidance and explanations from tax agencies regarding the application of Tax Agreements;

b) To withdraw their applications or request cessation of negotiations at any time before MAPs or APAs are concluded;

c) To hire or engage independent experts or consulting organizations in accordance with the laws of Vietnam to provide support during discussions on contents relating to dossiers of request for application of APAs; the participation of experts is only supportive and advisory and does not alter the responsibilities of taxpayers;

d) During the implementation of a unilateral APA, in case of double taxation or an adjustment to taxable income causing disadvantages to taxpayers due to a decision of the tax agency of the Contracting Party, taxpayers have the right to request amendment or cancellation of the APA in accordance with this Circular.

2. Taxpayers have the following obligations:

a) To explain and demonstrate their satisfaction of the conditions for entitlement to incentives under Tax Agreements;

b) To provide timely tax agencies with adequate, truthful and accurate information and data during the processing of requests for MAPs and APAs;

c) To be held responsible under the laws of Vietnam for the completeness and accuracy of dossiers, information and data provided to tax agencies;

d) To retain relevant dossiers and documents during the process of requesting, reviewing, analyzing, discussing, negotiating, concluding, circulating and implementing APAs;

dd) To coordinate with tax agencies during the processing of MAPs and APAs; and give opinions on their acceptance or non-acceptance of the contents of draft mutual agreements at the request of tax agencies.

Article 6. Duties and powers of tax agencies in implementing provisions of Tax Agreements and processing MAPs and APAs

1. Duties of tax agencies

a) The Department of Taxation is authorized by the Minister of Finance to perform the following duties:

a.1) Issuing written notifications on the effect or cessation of effect of each Tax Agreement upon receiving notifications from the Ministry of Foreign Affairs;

a.2) Acting as the competent authority of Vietnam in settling the following affairs:

a.2.1) Receiving, studying and processing requests for MAPs and APAs, providing guidance on the processing of requests for MAPs and APAs, and issues arising during the implementation of Tax Agreements;

a.2.2) Exchanging information with the competent authority of the Contracting Party; exploiting and using information provided by foreign parties and maintaining information confidentiality in accordance with the laws of Vietnam, tax-related treaties and international agreements to which Vietnam is a party or signatory, in conformity with the standards of the Global Forum on Transparency and Exchange of Information for Tax Purposes;

a.2.3) Implementing tax administrative assistance measures prescribed in Clause 1 Article 47 of Decree No. 252/2026/ND-CP in conformity with the provisions of Tax Agreements;

b) Developing and operating an electronic information system serving the administration of MAPs and APAs; connecting and integrating such system with the centralized tax administration system and the risk data analysis system.

2. Tax agencies shall administer and examine taxpayers’ implementation of concluded APAs in accordance with Clause 9 Article 21 of Decree No. 255/2026/ND-CP.

3. Powers of tax agencies

a) To request taxpayers to give explanations and clarify information provided by the latter throughout the course of processing dossiers of request for application of MAPs, APAs;

b) To close dossiers of request for application of MAPs in accordance with Article 64 of this Circular; to cease processing requests for application of APAs in accordance with Article 75 of this Circular;

c) To suspend the processing of requests for application of APAs in the following cases:

c.1) Taxpayers fail to provide additional information or explanations at the request of tax agencies;

c.2) Taxpayers provide inaccurate, incomplete or untruthful information or data without appropriate grounds or documents for explanation or provement.

d) Tax agencies shall apply compliance management measures to taxpayers in accordance with the law on tax administration to ensure the full and proper implementation of concluded MAP and APA agreements.

Article 7. Methods for submission of dossiers of request for MAPs and APAs

1. The submission of dossiers of request for MAPs and APAs, explanations, additional information and documents, and notification of results of processing MAP and APA dossiers shall be carried out electronically in accordance with Article 50 of Decree No. 252/2026/ND-CP.

2. In case dossiers or documents have a large data size, use specialized technical formats or fail to satisfy the technical requirements of the electronic system, taxpayers may submit them in paper form.

Chapter II

TAX AGREEMENTS

Section 1

SUBJECTS AND SCOPE OF APPLICATION OF TAX AGREEMENTS

Article 8. Subjects of application of Tax Agreements

1. Tax Agreements apply to subjects that are residents of Vietnam or of a Contracting Party, or are concurrently residents of Vietnam and a Contracting Party.

2. A resident of a Contracting Party referred to in Clause 1 of this Article includes:

a) a subject that is liable to tax in the Contracting Party in accordance with the laws of that Contracting Party and satisfies one of the following 02 conditions:

a.1) being a person has a home, a place of residence in that Contracting Party or meets any other criterion of similar nature, in the case of an individual;

a.2) being a company or any organization of individuals, companies or other entities that has its place of management or registered office in, or is established in, that Contracting Party, or satisfies criteria of a similar nature in case such subject is an organization;

b) the State, a political subdivision or local authority of a Contracting Party, in case the Tax Agreement so provides;

c) Depending on each Tax Agreement, a resident of a Contracting Party does not include a subject that is liable to tax only in respect of income from sources or property located in that Contracting Party.

3. Residents of Vietnam under the laws of Vietnam include:

a) Resident individuals prescribed in Article 4 of the Government’s Decree No. 253/2026/ND-CP detailing a number of articles of the Law on Personal Income Tax;

b) Companies and any organizations of individuals, companies or other entities registered to operate in accordance with the laws of Vietnam;

c) The State or local authorities of Vietnam, in case the Tax Agreement so provides;

d) Depending on each Tax Agreement, residents of Vietnam do not include subjects that are liable to tax only in respect of income from sources or property located in Vietnam.

Residents of Vietnam prescribed in this Clause shall be determined as residents under a Tax Agreement if they satisfy the conditions prescribed at Points a.1 and a.2 Clause 2 of this Article.

4. In case a subject is determined to be a resident of Vietnam under Clause 3 of this Article and is concurrently determined to be a resident of a Contracting Party under the laws of the Contracting Party, the residence status of such subject shall be determined based on the following criteria:

a) For an individual:

The determination of an individual as a resident of Vietnam shall be based sequentially on the following criteria:

a.1) He/she has a permanent home in Vietnam (house under his/her ownership, rented house or house under his/her use rights);

a.2) Such individual has a permanent home in both Vietnam and the Contracting Party but has closer economic relations in Vietnam (such as: employment, place of business, place of management of personal property or other economic relations); or has closer personal relations in Vietnam (such as family relations or social relations);

a.3) Such individual has a permanent home in both Vietnam and the Contracting Party and the place where such individual has closer economic and personal relations cannot be determined, or such individual does not have a permanent home in either Vietnam or the Contracting Party, but he/she is more frequently present in Vietnam during the tax year;

a.4) Such individual is frequently present or is not frequently present in either Vietnam or the Contracting Party but has Vietnamese nationality;

a.5) Such individual has both Vietnamese nationality and the nationality of the Contracting Party, or has neither Vietnamese nationality nor the nationality of the Contracting Party, the competent authority of Vietnam shall resolve the residence status of such individual through the mutual agreement procedure with the competent authority of the Contracting Party.

In case, under the laws of Vietnam and the Contracting Party, an individual is concurrently determined to be a resident of Vietnam and of the Contracting Party during a tax year but the provisions on the tax years of the two countries differ, such individual shall be regarded as a resident of Vietnam if such individual primarily works and habitually lives in Vietnam during the tax year. For the period at the beginning of Vietnam’s tax year that falls within the preceding tax year of the Contracting Party due to the difference in period of tax years between the two countries, the individual shall be regarded as a resident of the Contracting Party for the purpose of tax finalization in Vietnam and the Contracting Party.

b) For subjects other than individuals:

Based on the provisions of each Tax Agreement, a subject other than an individual shall be a resident of Vietnam if it falls into one of the following cases:

b.1) Such subject is established or registered to operate in Vietnam;

b.2) Such subject has its head office in Vietnam;

b.3) Such subject has its place of effective management in Vietnam (the place of effective management is a place where high-ranking officers or the leadership of the enterprise meet, consider and discuss matters and make management decisions or decisions on production or business activities of the enterprise, or where the most important accounting books are kept);

b.4) If such subject is established or makes registration for operation in both countries or has its head offices or places of effective management in both countries, the competent authority of Vietnam and the competent authority of the Contracting Party shall determine that it is only a resident of either of the countries through mutual agreement procedure. In case Vietnam and the Contracting Party cannot reach a common agreement, it shall not be regarded as a resident for taxation of any country for the purpose of applying the Tax Agreement.

The above provisions on residents are included in the Article Residents of the Tax Agreements.

Article 9. Taxes covered by Tax Agreements

Taxes covered by Tax Agreements are those imposed on income and property prescribed in each Tax Agreement.

1. In the case of Vietnam, the Tax Agreements covers:

a) Corporate income tax;

b) Personal income tax.

2. For Contracting Parties, the taxes covered by Tax Agreements are prescribed in Article 2 of the Tax Agreements.

Section 2

REFUSAL TO APPLY TAX AGREEMENTS

Article 10. A number of cases of refusal to apply the Tax Agreements on the basis of the principle of benefits of the Tax Agreements

Unless otherwise provided in a Tax Agreement on limitation on benefits, Vietnamese tax agencies shall refuse to apply the Tax Agreement in the following cases:

1. The requester asks for the application of the Tax Agreement to the tax amount levied more than three years before the time of request for application of the Tax Agreement. The date of request for application of the Tax Agreement is the date on which the requester submits a complete dossier in accordance with Circular No. 89/2026/TT-BTC of the Minister of Finance detailing a number of articles of the Law on Tax Administration and Decree No. 252/2026/ND-CP.

2. The principal purposes of contracts or agreements are to enjoy tax exemption or reduction under the Tax Agreement.

3. The requester is not the beneficial owner of the income on which the tax amount is requested to be exempted or reduced under the Tax Agreement. The beneficial owner may be an individual, a company or an organization but must have the rights to own and control income, property or income-generating rights. When considering to identify an entity as a beneficial owner, the tax agency shall examine all factors and circumstances related to such entity on the “substance over form” principle because the purposes of Tax Agreements are to avoid double taxation, prevent fiscal evasion and not create opportunities for non-taxation in both Contracting Parties. The requester of application of a Tax Agreement shall not be regarded as the beneficial owner if falling into one of the following cases:

a) The requester is a non-resident that distributes more than 50% of its/his/her income to a resident of a third State within 12 months after receiving the income;

b) The requester is a non-resident that has no (or almost no) business activity, except the property ownership or income-generating rights;

c) The requester is a non-resident that has business activities, but the quantity of its/his/her property, the scale of business or the number of employees is not proportionate to the received income;

d) The requester is a non-resident that has no (or almost no) right to control or dispose of, and bears no or very little risks for, income, property or income-generating rights;

dd) The agreements on provision of loans or copyright or technical services between the requester being a non-resident and other entities in Vietnam contain conditions and terms in another agreement which the requester currently has with a third party and in which the requester is the recipient of loans, copyright or technical services;

e) The requester is a resident of a country or territory that levies no income tax or levies an income tax at a low rate (under 10%) not for the reasons of investment promotion provided in the Tax Agreement;

g) The requester is an agent or an intermediary company (except the case where an agent or an intermediary company is authorized by a beneficial owner to request the application of the Tax Agreement).

An intermediary agent or intermediary company is a company established in a Contracting Party only in order to have a necessary legal form to exist for the only purpose of tax avoidance or reduction or profit transfer without carrying out any essential business activities such as production, trade or service provision.

Section 3

INCOME FROM IMMOVABLE PROPERTY

Article 11. Definition of immovable property

1. Under Tax Agreements, the term immovable property is defined in accordance with the laws of Vietnam or of the Contracting Party in which the immovable property is situated. In all cases, this term covers property accessory to immovable property, livestock and equipment used in agriculture and forestry, benefits enjoyed under the land law, the rights to use immovable property, the rights to enjoy payments for the exploitation of, or the right to exploit, natural resources. Ships, boats and aircraft shall not be regarded as immovable property.

2. Under Clause 1 of this Article, immovable property in Vietnam includes:

a) Types of property listed in the definition of immovable property under the Civil Code, the Land Law, the Law on Real Estate Business and relevant law regulations, including the value of land use rights, lease rights in land lease contracts and off-plan immovable property;

b) Property accessory to the above-mentioned immovable property;

c) Livestock and equipment used in agriculture and forestry;

d) Benefits enjoyed under the land law of Vietnam;

dd) The right to enjoy payments for the exploitation of, or the right to exploit, natural resources.

Article 12. Determination of tax obligation for income from immovable property

Under the Tax Agreements, all types of income earned by a resident of a Contracting Party from the direct use, exploitation or lease of immovable property in Vietnam, including also immovable property of enterprises or independent practitioners, are liable to income tax in Vietnam in accordance with the current tax laws of Vietnam.

The above-mentioned provisions on taxation on income from immovable property are included in the Article of Income from Immovable Property of the Tax Agreements.

Section 4

BUSINESS INCOME

Article 13. Definition of business income

Under the Tax Agreements, business income means income of enterprises of the Contracting Parties (below referred to as foreign enterprises) carrying out production and business activities in Vietnam, excluding the types of income specified in Section 3 and Sections 5 thru 19, Chapter II of this Circular.

Article 14. Determination of tax obligation for business income

1. Tax obligations of foreign enterprises conducting production and business activities through permanent establishments in Vietnam.

Under the Tax Agreements, business income of a foreign enterprise will be taxed in Vietnam only if such enterprise has a permanent establishment in Vietnam and such income is directly or indirectly attributed to that permanent establishment. In this case, the foreign enterprise shall be taxed in Vietnam only on the part of income apportioned to such permanent establishment.

2. Definition of permanent establishment

a) Under the Tax Agreements, “permanent establishment” means a fixed place of business of an enterprise, through which the business of the enterprise is wholly or partly carried out.

An enterprise of a Contracting Party shall be regarded as having a permanent establishment in Vietnam if it fully satisfies the following three conditions:

a.1) Maintaining in Vietnam an “establishment”, e.g. a building, an office or part thereof, a means or equipment, including a location, place, means or equipment owned or leased by, or under the right of use of, the enterprise, also for cases where it is not owned by the enterprise but the enterprise has the right to use it in practice to conduct business activities;

a.2) This establishment is fixed, i.e. it must be established at a specified place and/or maintained on a permanent basis. The fixedness of a business establishment does not necessarily mean that such establishment must be attached to a specific geographical location for a certain length of time;

a.3) The enterprise carries out wholly or partly business activities through this establishment.

An e-commerce platform or digital platform through which a foreign enterprise carries out all or part of its activities of providing goods or services in Vietnam shall be regarded as a permanent establishment of the foreign enterprise in Vietnam because it fully satisfies the three conditions for a permanent establishment defined at Point a Clause 2 of this Article.

b) An enterprise of a Contracting Party shall be regarded as carrying out business activities through a permanent establishment in Vietnam in the following major cases:

b.1) Such enterprise has in Vietnam: place of management, branch (such as branch of a law firm, branch of a foreign office, branch of a tobacco company, branch of a bank, etc.), office (including commercial representative office authorized to negotiate and sign commercial contracts), factory, workshop, mine, oil or gas well, forwarding storehouse, a place of exploration or exploitation of natural resources, or has equipment and facilities used for the exploration and exploitation of natural resources in Vietnam;

b.2) That enterprise has in Vietnam a building site, a construction, installation or assembly project, or carries out supervisory activities in connection therewith, provided that such site, project or activities last for more than the period prescribed in each specific Tax Agreement;

A building site or construction or installation project includes a site or project for construction of buildings, roads, bridges and culverts, installation of pipelines, excavation or dredging of rivers. The period shall be calculated from the date on which the contractor commences preparatory work for the construction project in Vietnam, such as establishment of an office to prepare a construction plan, until the project is completed and handed over entirety in Vietnam, including any period during which the project is interrupted for any reason.

Subcontractors of the Contracting Party participating in the above construction, installation or assembly projects shall be also regarded as carrying out business activities in Vietnam through permanent establishments if they meet all the conditions prescribed at Point a Clause 2 of this Article.

The time of execution of projects for the determination of permanent establishments for principal contractors is the sum of the time for the execution of contractual components by subcontractors and the time of execution by the principal contractor.

b.3) That enterprise provides services including also consulting services in Vietnam through its employees or another person, provided that these services in a project or related projects last in a period or periods exceeding 183 days in any 12-month period;

In case the provision of services lasts no more than 183 days within a 12-month period but still satisfies fully the three conditions for a permanent establishment defined at Point a Clause 2 of this Article, such provision of services shall be regarded as having a permanent establishment in Vietnam.

b.4) That enterprise in Vietnam has a brokerage agent, a commission agent or any other agent, and such agents devote wholly or most of their agency activities for that enterprise (dependent agent).

b.5) That enterprise gives a person in Vietnam:

b.5.1) An authority to regularly negotiate and conclude contracts in the name of the enterprise; or sign contracts in his/her name with obligations or responsibilities binding on such enterprise; or

b.5.2) No such authority, but the right to regularly represent that enterprise in delivering goods in Vietnam.

c) A foreign enterprise is not regarded as having a permanent establishment in Vietnam in the following cases:

c.1) That enterprise uses facilities in Vietnam solely for the purpose of storage or display of its goods;

c.2) That enterprise has a stock of goods in Vietnam solely for the purpose of storage or display, of processing by another enterprise;

c.3) That enterprise has a fixed place of business in Vietnam solely for the purpose of purchasing goods or collecting information for the enterprise;

c.4) That enterprise has a fixed place of business in Vietnam solely for the purpose of carrying out preparatory or auxiliary activities for the enterprise.

d) In case a company being a resident of the Contracting Party controls, or is controlled by, a company being a resident of Vietnam, or is carrying out business activities in Vietnam (possibly through a permanent establishment or in other forms), neither of the companies may become a permanent establishment of another company.

However, in case the company being a resident of the Contracting Party contributes capital to a joint-venture enterprise or an enterprise with 100% foreign capital in Vietnam (including export processing enterprise), such company shall be regarded as having a permanent establishment in Vietnam if:

d.1) The joint-venture enterprise or enterprise with 100% foreign capital regularly negotiates or signs contracts in the name of such company; or signs contracts in its own name but with obligations or responsibilities binding on the foreign company; or

d.2) The joint-venture enterprise or enterprise with 100% foreign capital regularly represents the foreign company in delivering goods in Vietnam; or

d.3) Such foreign company has the right to dispose of the physical-technical foundations of such joint-venture enterprise or enterprise with 100% foreign capital in the course of production or business (i.e. the foreign company uses physical-technical foundations (if any) of the joint-venture enterprise or enterprise with 100% foreign capital in Vietnam in the course of production or business in Vietnam not based on the principle of market prices).

3. Determination of taxable incomes of permanent establishments

a) The determination of taxable incomes of permanent establishments of foreign enterprises, except foreign bank branches in Vietnam shall be conducted under documents guiding the implementation of the law on corporate income tax for foreign organizations and individuals engaged in business activities without forming a legal person in Vietnam or earning incomes in Vietnam;

b) When determining expenses apportioned by the headquarters or offices of a foreign enterprise to a permanent establishment in Vietnam, the permanent establishment shall be regarded as an independent enterprise jointly carrying out the same or similar activities under the same or similar conditions totally independent from the headquarters or offices of the foreign enterprise. In any circumstances, the following amounts apportioned by the headquarters or offices of the foreign enterprise to a permanent establishment in Vietnam shall not be accepted as deductible expenses:

b.1) Copyright royalties or similar payments for the utilization of inventions or similar rights;

b.2) Commissions for services or for management jobs;

b.3) Loan interests in any form.

c) The determination of taxable incomes of foreign bank branches in Vietnam shall comply with the guidance on determination of incomes liable to corporate income tax of legal persons in Vietnam. In any circumstances, the following amounts apportioned by the headquarters or offices of foreign banks to their permanent establishments in Vietnam shall not be accepted as deductible expenses:

c.1) Copyright royalties or similar payments for the utilization of inventions or similar rights;

c.2) Commissions for services or for management jobs.

The above provisions on taxation on business income are included in the Article of Business Income of the Tax Agreements.

Section 5

INCOME FROM INTERNATIONAL TRAFFIC

Article 15. Definition of international traffic

Under the Tax Agreements, international traffic means the carriage of cargo or passengers by ship or aircraft (some cases specified in each particular Tax Agreement may also include means of transport by road, rail or inland waterway, below referred to as means of transport), conducted by Vietnamese enterprises of Vietnam or the Contracting Party, except for the case these transport activities take place sole between places in Vietnam or in the Contracting Party.

Article 16. Identification of beneficial owners for incomes from international traffic

Depending on each Tax Agreement, international transport enterprises of Vietnam or of the Contracting Party shall be identified according to the following criteria:

1. Enterprises are managed by residents of Vietnam or of the Contracting Party, or

2. Enterprises have a place of effective management in Vietnam or in the Contracting Party,

provided that these enterprises own or have the rights to use at least the whole of a means of transport and use such means for cargo and/or passenger transport on international routes (referred to as means of transport directly managed by enterprises).

Article 17. Determination of income from international traffic

Depending on the provisions of each Tax Agreement, income from international traffic by the persons stated in Article 16 of this Circular is eligible for tax exemption or reduction in Vietnam or in the Contracting Party.

The scope of application of tax exemption or reduction in Vietnam to enterprises of the Contracting Party covers:

1. Income from international traffic by means of transport directly managed by enterprises and from activities incidental to the international traffic, specifically:

a) Turnover from international traffic by means of transport directly managed by enterprises which issue transport documents (tickets, bills of lading or passenger and cargo transport manifests);

b) Turnover from the charter of part of means of transport (also referred to as space charter) or from the charter of the whole of means of transport by shipment directly managed by enterprises;

c) Turnover from the carriage of cargo or passengers when the enterprises enter into partnerships to operate on international routes, provided that the enterprises enter into the partnerships on the basis of contributing means of transport directly managed by the enterprises or contributing funds for the operation of the means of transport directly managed by the partnerships and the involved parties use separate transport documents. In this case, turnover shall be determined on the basis of transport documents issued by the enterprises of the partnerships but must not exceed the space limits of the means of transport which the enterprises may exploit in accordance with the partnership agreements.

d) Turnover from the carriage of passengers or cargoes by means of transport managed by other enterprises, with international transport documents issued by the enterprises under either of the following two conditions:

d.1) Such carriage stage is part of the international trip by the ship or aircraft directly managed by the enterprises and is stated in the transport documents issued by the enterprises themselves;

d.2) That carriage is conducted on the basis of the agreement on the swapping of a space aboard a means of transport (referred to as space swapping) directly managed by an enterprise for a corresponding space aboard another means of transport managed by another enterprise. In this case, turnover shall be determined on the basis of transport documents issued by the enterprise itself but must not exceed the space limit the enterprise is allowed to exploit free of charge aboard the means of the counterpart company in accordance with the space swapping agreement.

dd) Income from the short-term letting (retention) of containers as an activity incidental to the operation of the means of transport directly managed by enterprises, if prescribed in the Tax Agreements.

The nature of incidentality of an activity to the operation of means of transport of the short-term letting (retention) of containers shall be determined to be containers accompanying the means of transport entering a Vietnamese port, containers currently containing imported cargo and the container use cost is included in the freight; income from the short-term letting of containers arises because the cargo recipients retain containers beyond the time limit for free-of-charge use.

e) Turnover from the bareboat charter of ships or dry lease of aircraft (referred to as bareboat charter) which is incidental to the international traffic of the means of transport directly managed by the enterprises, if it is specified in the Tax Agreements and simultaneously meets the following three conditions:

e.1) The means of transport is being used by the enterprise in international traffic;

e.2) The total chartering time is shorter than the time the means of transport is operated for international traffic by the enterprise itself within 12 months starting or ending the calendar year;

e.3) The charterer does not change the name and call signals of the means of transport.

Bareboat charter means that the charter of a ship whereby the shipowner provides the charterer with a ship, without crew.

Turnover mentioned at Points d and e of this Clause shall not be regarded as turnover from activities incidental to international traffic for application of the Tax Agreements if enterprises do not derive any turnover stated at Points a, b, c or d of this Clause.

2. Where two or more enterprises carry out partnership activities in order to form a partnership without legal person status to carry out international traffic with means of transport directly managed by the partnership and transport documents issued in the name of such partnership, the identification of the scope of tax exemption or reduction under an Tax Agreement shall be made separately for each party to the partnership under the Tax Agreement between Vietnam and the State of which the party to the partnership is a resident or in which the party to the partnership has its place of effective management. The bases for determination of turnover eligible for tax exemption or reduction are similar to those specified in Clause 1 of this Clause and such turnover shall be apportioned according to the percentage of turnover divided to the party to the partnership under the partnership contract or agreement.

When declaring their tax obligations, the above enterprises shall separately account the above incomes for consideration of corporate income tax exemption or reduction in accordance with the provisions on income from international traffic. In any circumstances, turnover considered for tax exemption or reduction must not exceed the corporate income tax-liable turnover of international traffic in accordance with relevant regulations.

The above provisions on taxation on income from international traffic are included in the Article of Ships and Aircraft of the Tax Agreements.

Section 6

INCOME FROM DIVIDENDS

Article 18. Definition of dividends

Under the Tax Agreements, dividends means amounts deducted from after-tax incomes of limited liability companies or joint-stock companies and paid to members of the limited liability companies or shareholders of the joint-stock companies, amounts deducted from after-tax incomes of joint-venture enterprises or wholly foreign-owned enterprises and paid to foreign parties, incomes derived from offshore (indirect) investment activities (excluding loan interests prescribed in Section 7, Chapter II of this Circular) by residents of Vietnam, and Vietnamese enterprises’ divided incomes from offshore direct investment activities, which are treated by the Contracting Parties like dividends.

Article 19. Determination of tax obligation for income from dividends

1. Under Tax Agreements, Vietnam is entitled to tax dividends arising in Vietnam. In case the beneficial owner of the dividends is a resident of a Contracting Party, the tax rate applicable in Vietnam shall not exceed the limit rate prescribed in the Tax Agreement.

2. In case a resident of Vietnam receives dividends from a company that is a resident of a Contracting Party, the Contracting Party is entitled to tax such income as guided in Clause 1 of this Article. Vietnam is also entitled to tax such income in accordance with the current tax laws of Vietnam but, at the same time, Vietnam shall apply methods for elimination of double taxation on this income as prescribed in Section 20 of this Chapter.

3. In case a resident of the Contracting Party receives dividends which, under Vietnam’s current tax law, are not taxed or are taxed at a rate lower than that prescribed in the Tax Agreement, it/he/she shall fulfill the tax obligation prescribed by Vietnam’s current tax law.

Article 20. Identification of beneficial owners under the Agreements for income from dividends

1. Under the Tax Agreements, the provisions on taxation on dividends are applicable only to residents that are concurrently the recipients and beneficial owners of shares, i.e., shareholders.

2. In addition to some cases not eligible for benefits of the Tax Agreements as defined in Article 10 of this Circular, the reduction of tax on income from dividends under the Tax Agreements is not applicable to:

a) Recipients of paid dividends that are neither shareholders nor residents of Vietnam or of a Contracting Party;

b) Dividends paid by a company being a resident of Vietnam to a Vietnam-based permanent establishment of a resident of the Contracting Party;

c) Dividends paid by a company being a resident of Vietnam to another Vietnamese company’s permanent establishment based in the Contracting Party.

3. The above-said provisions on taxation on income from dividends are included in the Article Dividends of the Tax Agreements.

Section 7

INCOME FROM LOAN INTEREST

Article 21. Definition of loan interest

Under the Tax Agreements, “loan interest” means income from loans provided in any forms, secured or not secured by mortgage and with or without the borrower’s right to enjoy profits, including also income from government securities and income from bonds or corporate bonds, including also premiums and prizes attaching to such securities, bonds or debentures.

Article 22. Identification of tax obligation for income from loan interest

1. Under the Tax Agreements, Vietnam is entitled to tax loan interest arising in Vietnam. In case the beneficial owner of loan interest is a resident of a Contracting Party, the tax rate applicable in Vietnam shall not exceed the limit rate prescribed in the Tax Agreements.

Loan interest arising in Vietnam means loan interest which is borne and paid by any resident of Vietnam, including interests borne and paid by the Vietnamese Government and local authorities or Vietnam-based permanent establishments or fixed places of foreign residents.

2. In case a resident of Vietnam receives loan interest arising in the Contracting Party, the Contracting Party is entitled to tax such income as guided in Clause 1 of this Article. Vietnam is also entitled to tax such income in accordance with the current tax laws of Vietnam but, at the same time, Vietnam shall apply methods for elimination of double taxation on this income as prescribed in Section 20 of this Chapter.

3. In case Vietnam’s current tax law does not provide taxation on this type of income or provides taxation at a rate lower than that prescribed in the Tax Agreement, the subject shall fulfill the tax obligation in accordance with Vietnam’s current tax law.

Article 23. Identification of beneficial owners for income from loan interest

1. Under the Tax Agreements, the provisions on taxation on income from loan interests are applicable only to entities that directly provide loans and receive loan interests and are concurrently beneficial owners of such interests, i.e., lenders.

2. In addition to some cases not eligible for benefits of the Tax Agreements as defined in Article 10 of this Circular, the reduction of or exemption from tax on income from the loan interest under the Tax Agreements is not applicable to:

a) Recipients of paid loan interest that are not the lenders;

b) Loan interest arising in Vietnam and paid to a Vietnam-based permanent establishment of a resident of the Contracting Party;

c) Loan interest arising in Vietnam and paid to another Vietnamese company’s permanent establishment based in the Contracting Party;

d) Loan interest arising in Vietnam and paid to a third party’s enterprise’s permanent establishment based in the Contracting Party;

dd) Loans not directly transferred from an account of the lender being a resident of the Contracting Party.

3. The above provisions on taxation on income from loan interest are included in the Article Loan Interest of the Tax Agreements.

Section 8

INCOME FROM ROYALTIES

Article 24. Definition of royalties

Under the Tax Agreements, royalties means amounts paid for the use of or the right to use:

1. Copyright of literary, artistic or scientific works, including cinematographic films and tapes or discs used for radio or television broadcasting.

2. Patents.

3. Brand.

4. Designs, models, plans, secret formulas or processes.

5. Computer software.

6. Industrial, commercial and scientific equipment.

7. Information related to industrial, scientific and commercial experience.

Article 25. Identification of tax obligation for income from royalties

1. Under Tax Agreements, Vietnam is entitled to tax royalties arising in Vietnam. In case the beneficial owner of royalties is a resident of a Contracting Party, the tax rate applicable in Vietnam shall not exceed the limit rate prescribed in the Tax Agreement.

Royalties arising in Vietnam means royalties borne and paid by any resident of Vietnam, including those borne and paid by the Vietnamese Government and local authorities or Vietnam-based permanent establishments or fixed places of foreign residents.

2. In case a resident of Vietnam receives royalties arising in the Contracting Party, the Contracting Party is entitled to tax such income as guided in Clause 1 of this Article. Vietnam is also entitled to tax such income in accordance with the current tax laws of Vietnam but, at the same time, Vietnam shall apply methods for elimination of double taxation on this income as prescribed in Section 20 of this Chapter.

3. In case Vietnam’s current tax law does not provide taxation on this type of income or provides taxation at a rate lower than that prescribed in the Tax Agreement, the subject shall fulfill the tax obligation in accordance with Vietnam’s current tax law.

Article 26. Identification of beneficial owners of income from royalties

1. Under the Tax Agreements, the provisions on taxation on royalties are applicable only to entities that are concurrently recipients and beneficial owners of royalties, i.e., persons having the right to own, use and exploit copyright.

2. The provisions on taxation of income from royalties shall not apply in any of the following cases:

a) Recipients of paid royalties that are not persons having the right to own, use and exploit copyright;

b) Royalties arising in Vietnam and directly related to a Vietnam-based permanent establishment of the beneficial owner being a resident of the Contracting Party;

c) Royalties arising in Vietnam and paid to another Vietnamese company’s permanent establishment based in the Contracting Party.

3. The above-said provisions on taxation on income from royalties are included in the Article Royalties of the Tax Agreements.

Section 9

INCOME FROM THE PROVISION OF TECHNICAL SERVICES

Article 27. Definition of technical service charges

Under the Tax Agreements, technical service charges mean payments in any forms and made to any entities, other than employees of the payers, for any technical, managerial or consultancy services.

Article 28. Determination of tax obligation for income from technical services

1. Under Tax Agreements, Vietnam is entitled to tax technical service charges arising in Vietnam. In case the beneficial owner of technical service charges is a resident of a Contracting Party, the tax rate applicable in Vietnam shall not exceed the limit rate prescribed in the Tax Agreement.

Technical service charges arising in Vietnam means payments borne and made in any forms by a resident of Vietnam, including those borne and paid by the Vietnamese Government and local authorities or Vietnam-based permanent establishments or fixed places of foreign residents.

2. In case a resident of Vietnam receives technical service charges arising in the Contracting Party to a Tax Agreement with Vietnam, such Contracting Party is entitled to tax the income in accordance with Clause 1 of this Article; Vietnam is entitled to tax the income in accordance with Vietnam’s current tax law but, at the same time, Vietnam shall apply methods for elimination of double taxation on this income prescribed in Section 20 of this Circular.

The above provisions on taxation on income being technical service charges are included in the Article Technical Service Charges of the Tax Agreements.

Section 10

INCOME FROM THE ALIENATION OF PROPERTY

Article 29. Definition of income from the alienation of property

Income from the alienation of property means income in any forms from the sale or alienation (of the whole or part of) or exchange of the property and rights over the property, including the case in which the property is brought into a business establishment in exchange for the rights therein.

Article 30. Determination of tax obligation for income from the alienation of property

1. Tax obligation for income from the alienation of immovable property in Vietnam

Under the Tax Agreements, Vietnam is entitled to tax income derived from the alienation of immovable property in Vietnam by a resident of the Contracting Party in accordance with Vietnam’s current tax law.

2. Tax obligation for income from the alienation of movable property being business property of a Vietnam-based permanent establishment.

Under the Tax Agreements, Vietnam is entitled to tax income earned from the alienation of business property by a permanent establishment or the transfer of a Vietnam-based permanent establishment of a resident of the Contracting Party in accordance with Vietnam’s current tax law.

3. Tax obligation with respect to income from the alienation of ships, boats and aircraft operating in international traffic.

Under Tax Agreements, income from the alienation of ships, boats and aircraft operating in international traffic (as prescribed in Article 16 of this Circular) and operated by international transport enterprises of the Contracting Party is not taxed in Vietnam.

4. Tax obligation for income from the (direct or indirect) alienation of capital of foreign investors in foreign-invested enterprises, trusts or partnerships in which the value of immovable property accounts for a major percentage to the total property of enterprises

Most of the Tax Agreements between Vietnam and other countries provide that Vietnam is entitled to collect income tax in case the foreign parties alienate their capital in enterprises, trusts or partnerships being residents of Vietnam in which the value of immovable property accounts for a major percentage to the total property of enterprises.

The percentage of the value of immovable property in the total property of an enterprise is the simple average of the percentages of the residual values of immovable property in the total residual values of property of the enterprise whose capital is directly or indirectly alienated at the time of alienation, the beginning and the end of the tax year immediately preceding the year of alienation. The value of immovable property shall be determined based on the enterprise’s audited financial statements at the beginning and the end of the tax year immediately preceding the year of alienation and the financial statements prepared by the enterprise at the time of alienation.

In such case, the major percentage of the value of immovable property to the total property of an enterprise shall be determined as follows:

a) In case the Tax Agreement specifies a percentage or major percentage, the percentage specified in the Tax Agreement shall apply;

b) In case the Tax Agreement does not specify a percentage or the method of determining a major percentage, the applicable percentage shall be over 50%.

This provision does not apply to Tax Agreements that do not refer to the criterion of a major percentage but only define the general provisions on the taxation rights of the country in which the immovable property is situated.

5. Tax obligation for income from the (direct or indirect) alienation of shares in a Vietnam-based company.

Several Tax Agreements provide that income from the alienation of shares of a resident of the Contracting Party in a company being a resident of Vietnam must be taxed in Vietnam.

6. Tax obligation for income from the alienation of other property in Vietnam.

Under the Tax Agreements, income earned from the alienation of property other than the kinds of property specified in Clauses 1 thru 5 of this Article in Vietnam by a resident of the Contracting Party shall not be taxed in Vietnam.

The above provisions on taxation on income from the alienation of property are included in the Article Income from the Alienation of Property of the Tax Agreements.

Section 11

INCOME FROM INDEPENDENT PERSONAL SERVICES

Article 31. Definition of income from independent personal services

Under the Tax Agreements, income from independent personal services means income earned by an individual who is a resident of the Contracting Party from independent activities of providing professional services such as scientific, literary, artistic, education or teaching services, particularly independent professional services of physicians, lawyers, engineers, architects, dentists, accountants and auditors.

Income from independent personal services does not include remuneration from employment (prescribed in the Article Income from Dependent Personal Activities), directors’ fees (prescribed in the Article Directors’ Fees), pensions (prescribed in the Article Pensions), government services (prescribed in the Article Income from Government Services), income of pupils and students (prescribed in the Article Income of Students), teachers and professors (prescribed in the Article Income of Professors, Teachers and Researchers), and independent performances of artists and athletes (prescribed in the Article Income of Artists and Athletes).

Article 32. Determination of tax obligation for income from independent personal services

Under the Tax Agreements, a resident of the Contracting Party who provides independent personal services in Vietnam is liable to pay personal income tax in Vietnam in the following cases:

1. Such person conducts independent professional practice through a fixed place.

The term “fixed place” refers to a place or an address of a habitual or stable nature within the territory of a nation, through which a person provides professional services (e.g., a medial counseling room, an architect’s or lawyer’s office, etc.). The principle for determination of a “fixed place” is similar to that for determination of a “permanent establishment” of an enterprise as stated at Clause 2, Article 14 of this Circular.

2. Such person is present in Vietnam for 183 days or more in the tax year or within 12 months from the date he/she arrives in Vietnam, depending on each Tax Agreement.

3. Such person earns a certain income, depending on each Tax Agreement, from independent professional practice in Vietnam for a given period of time.

The above provisions on taxation on income from independent personal services are included in the Article Independent Personal Services of the Tax Agreements.

Section 12

INCOME FROM DEPENDENT PERSONAL SERVICES

Article 33. Definition of income from dependent personal services

Under the Tax Agreements, income from dependent personal services means income in the form of remuneration earned by an individual who is a resident of the Contracting Party from his/her employment in Vietnam and vice versa. Income from dependent personal services does not include income of individuals in the capacity as independent practitioners (prescribed in the Article Independent Personal Services), members of enterprises’ directorates (prescribed in the Article Directors’ Fees), artistes and athletes (prescribed in the Article Income of Artistes and Athletes), employees serving foreign governments (prescribed in the Article Income from Government Services), and remuneration in the form of pensions (prescribed in the Article Pensions).

Article 34. Determination of tax obligation for incomes from dependent personal services

1. Under the Tax Agreements, an individual, who is a resident of the Contracting Party, earns income from his/her employment in Vietnam, shall pay income tax in Vietnam in accordance with Vietnam’s current regulations on personal income tax.

2. If the individual stated in Clause 1 fully satisfies all the following three conditions, his/her remuneration from the employment in Vietnam shall be exempt from income tax in Vietnam:

a) That individual is present in Vietnam for less than 183 days in a period of 12 months starting or ending within the tax year;

b) The employer is not a resident of Vietnam, regardless of whether that remuneration is directly paid by the employer or through the employer’s representative;

c) This remuneration is not borne and paid by the Vietnam-based permanent establishment set up by the employer.

3. The term “employer” used at Point b Clause 2 of this Article refers to real employer. Normally, a person shall be regarded as real employer if he/she has following rights and obligations:

a) That person has rights over the products and services created by the employee and bearing responsibility as well as risks for such labor;

b) That person gives instructions and supplies working tools to the employee;

c) That person is entitled to control and bears responsibility for the workplace.

4. Income earned by a Vietnamese being a resident of the Contracting Party not from his/her employment in Vietnam but from his/her employment overseas shall not be taxed in Vietnam.

5. Income earned by individuals employed aboard ships, boats or aircraft (crews) operating in international traffic by enterprises that are residents of, or have places of effective management in Vietnam shall be taxed in Vietnam in accordance with the laws of Vietnam.

The above provisions on taxation on income from dependent personal services are included in the Article Dependent Personal Services of the Tax Agreements.

Section 13

DIRECTORS’ FEES

Article 35. Definition of directors’ fees

Under the Tax Agreements, directors’ fees mean incomes received in Vietnam by a resident of the Contracting Party in the capacity as a member of the Board of Directors or Managing Board of a company or as a senior manager of an enterprise being a resident of Vietnam; and vice versa. This income does not include salaries received by such members for other functions performed by them as employee, consultant or advisor, salaries of foreigners holding a post in Vietnam-based representative offices of foreign companies. These normal incomes shall be regarded as incomes from dependent personal services (prescribed in Section 12, Chapter II of this Circular).

Article 36. Determination of tax obligation for directors’ fees

Under the Tax Agreements, individuals who are residents of the Contracting Party receive remuneration in the capacity as members of the Board of Directors, Managing Board or as senior managers of a company being a resident of Vietnam shall pay tax on such type of income in accordance with the regulations on personal income tax in Vietnam (regardless of whether they are present in Vietnam or not).

The above provisions on taxation on directors’ fees are included in the Article Directors’ Fees of the Tax Agreements.

Section 14

INCOME FROM PERFORMANCES OF ARTISTES AND ATHLETES

Article 37. Definition of income from performances of artistes and athletes

Under the Tax Agreements, income from performances in Vietnam by artistes and athletes means income from art or sport performances in Vietnam by artistes or athletes themselves, who are residents of the Contracting Parties to the Tax Agreements; and vice versa.

Article 38. Determination of tax obligation for income from performances of artistes and athletes

1. Notwithstanding the provisions of Sections 11 and 12 Chapter II of this Circular, income earned by an individual being a resident of the Contracting Party, from his/her art, sport performance in Vietnam shall pay income tax in accordance with the laws of Vietnam.

2. Notwithstanding the provisions of Sections 4, 11 and 12 Chapter II of this Circular, in case income from artistic or sports performances in Vietnam by an individual being a resident of the Contracting Party to an Agreement concluded with Vietnam is not paid to the performer but to another subject, such income shall be taxed in Vietnam in accordance with the laws of Vietnam.

3. In case the art or sport performances carried out by an individual or a company that is a resident of the Contracting Party within the framework of a program of cultural exchanges between the governments of the two countries or financed by public funds of the Contracting Party, income earned from performances in Vietnam by such foreign individual or company is exempt from tax in Vietnam if the Tax Agreement between Vietnam and the Contracting Party has such provisions.

The above provisions on taxation on income of artistes and athletes are included in the Article Artistes and Athletes of the Tax Agreements.

Section 15

PENSIONS

Article 39. Definition of pensions

Under the Tax Agreement, pensions mean pensions received by a resident of the Contracting Party from his/her past employment in Vietnam; and vice versa. This income does not include pensions paid by the governments and local authorities of Vietnam and the Contracting Party because such income is regarded as income from Government services (prescribed in Section 16 Chapter II of this Circular).

Article 40. Determination of tax obligation for pensions

1. Depending on each particular Tax Agreement, pensions shall be taxed:

a) Only in the State of which the pension recipients are residents; or

b) Only in the State where pensions are paid; or

c) Both in the State of which the pension recipients are residents and in the State where the pensions arise, if the pension payers are residents of, or permanent establishments in, such States.

2. The above provisions on taxation of income from pensions are included in the Article Pensions of the Tax Agreements.

Section 16

INCOME FROM GOVERNMENT SERVICES

Article 41. Definition of Government services

Under the Tax Agreements, income from Government services means wages, salaries or pensions paid by the Government or local authorities of the Contracting Party to an individual for the tasks performed for that Contracting Party.

Article 42. Determination of tax obligation for salaries from Government services

1. In case a foreigner sent by the Government of the Contracting Party to work in Vietnam for a Vietnam-based organization of that Government or for a program of economic or cultural cooperation or aid between the two States, his/her salary or wage paid by that foreign Government is exempt from income tax in Vietnam even though such person has become a resident of Vietnam for the purpose of performing such jobs.

2. Salaries or wages paid by the Government of the Contracting Party shall only be taxed in Vietnam if they are paid to an individual being a resident of Vietnam for the tasks performed for that foreign Government in Vietnam and this individual satisfies one of the following two conditions:

a) Holds the Vietnamese nationality;

b) Was a resident of Vietnam before performing the tasks in Vietnam for the foreign Government.

Article 43. Determination of tax obligation for salaries from Government services

A pension paid to an individual from a fund set up by the Vietnamese State or local authorities (below referred collectively to as the Vietnamese State) or paid directly by the Vietnamese State for his/her previous work for the Vietnamese State shall only be taxed in Vietnam, unless the above-said individual is concurrently a resident of the Contracting Party and holds the nationality of that Contracting Party. In case the above-said individual is a resident of the Contracting Party and concurrently holds the nationality of that Contracting Party, his/her pension shall only be taxed in that Contracting Party.

Article 44. Determination of tax obligation for salaries and pensions from Government business services

Notwithstanding the provisions of Articles 42 and 43 of this Circular, salaries, wages or pensions paid by a foreign Government to an individual for his/her participation in the foreign Government’s business activities in Vietnam, such as activities of railway transport enterprises, postal enterprises or State performance companies, shall be taxed according to Sections 12, 13, 14 and 15 Chapter II of this Circular, depending on each case.

The above provisions on taxation of income from Government services are included in the Article Government Services of the Tax Agreements.

Section 17

INCOME OF STUDENTS, INTERNS AND APPRENTICES

Article 45. Definition of income of students, interns and apprentices

Under the Tax Agreements, income of students, interns and apprentices in Vietnam in service of their education, study or vocational training in Vietnam, falling within the scope of regulation of this Article, only includes:

1. Income received from overseas sources for the purpose of their learning and maintenance in Vietnam.

2. Income received from their employment in Vietnam directly related to the education, study or vocational training in Vietnam (in the case it is specified in the Tax Agreement). In some Tax Agreements, only a certain level of this income is exempt from tax.

Article 46. Determination of tax obligation for income of students, interns and apprentices

If immediately before visiting Vietnam for education, study or vocational training, foreign students, interns or apprentices were residents of the Contracting Party, they shall be exempt from income tax in Vietnam on the types of income stated in Article 45 of this Circular.

The above provisions on taxation on income of students, interns and apprentices are included in the Article Students, Interns and Apprentices of the Tax Agreements.

Section 18

INCOME OF TEACHERS, PROFESSORS, AND RESEARCHERS

Article 47. Definition of income of teachers, professors, and researchers

Some Tax Agreements specifically provide the taxation of income earned by foreign teachers, professors and researchers from teaching, lecturing and researching activities in Vietnam. This income includes income earned from teaching, lecturing or researching activities at universities or educational establishments recognized by the Vietnamese Government.

Article 48. Determination of tax obligation for income of teachers, professors and researchers

1. Income of foreign teachers, professors and researchers from teaching, lecturing or researching activities in Vietnam under Article 47 of this Circular shall be exempt from tax in Vietnam (within the time prescribed in the Tax Agreement) if concurrently satisfying the following conditions:

a) Immediately before visiting Vietnam for teaching, lecturing or researching activities, foreign teachers, professors or researchers are residents of the Contracting Party;

b) To teach, give lecture or conduct research at universities or educational establishments recognized by the Vietnamese Government.

2. The tax exemption under Clause 1 of this Article shall not apply to teaching or researching activities for the own purposes of an individual or a private organization.

The above provisions on taxation on income of teachers, professors and researchers are included in the Article Teachers, Professors and Researchers of the Tax Agreements.

Section 19

OTHER INCOME

Article 49. Definition of other income

Under the Tax Agreements, other income means all other income not mentioned in other provisions of the Tax Agreements, such as: income from lottery win, amounts won from gambling at casinos, financial support from familial or marital obligations, income from inheritance and income from gifts.

Article 50. Determination of tax obligation for other income

1. Depending on each particular Tax Agreement, a resident of a Contracting Party who earns other income from Vietnam, shall pay tax under Vietnam’s current tax law. Nevertheless, in some Tax Agreements, Vietnam commits to grant tax exemption for other income in this case.

2. In case other income is related to a Vietnam-based permanent establishment of a resident of the Contracting Party to an Tax Agreement concluded with Vietnam, Vietnam is entitled to tax such income in accordance with the provisions of Vietnam’s current tax law and Sections 4 and 11, as the case may be, Chapter II of this Circular.

The above provisions on taxation on other income are included in the Article Other Income of the Tax Agreements.

Section 20

RELIEF FROM DOUBLE TAXATION IN VIETNAM

Under the Tax Agreements, when a taxpayer being a resident of Vietnam derives an income from the Contracting Party and has paid tax in that State (under the provisions of the Tax Agreement and that State’s laws), Vietnam may still tax such income but, at the same time, it is also obliged to apply methods for elimination of double taxation so that that taxpayer does not have to pay double tax. Vietnam may apply one or a combination of the methods for elimination of double taxation prescribed in Articles 51, 52, and 53 of this Circular.

Article 51. Tax credit

In case a resident of Vietnam derives an income from and has paid tax in the Contracting Party, if in that Tax Agreement, Vietnam commits to apply tax credit, then, when this resident makes income tax declaration in Vietnam, such income shall be included in his/her taxable income in Vietnam in accordance with Vietnam’s tax law and the tax amount already paid in the Contracting Party shall be credited against the tax amount payable in Vietnam. The tax credit is effected on the following principles:

1. Tax already paid in the Contracting Party to be credited means a tax prescribed in the Tax Agreements.

2. The credited tax amount must not exceed the tax amount payable in Vietnam, which is computed on the income derived in the Contracting Party in accordance with Vietnam’s tax law, but the credit or refund of the tax amount overpaid overseas is not allowed.

3. The tax amount paid in the Contracting Party to be credited means a tax amount arising during the period of a tax year in Vietnam.

Article 52. Method of credit for tax amounts eligible for tax exemption or reduction in the Contracting Party

In case a resident of Vietnam derives income from and must pay tax in the Contracting Party (a reduced or exempted tax as a special preference), if, in that Tax Agreement, Vietnam commits to apply the method of credit of tax amount eligible for tax exemption or reduction in the Contracting Party, when this resident makes income tax declaration in Vietnam, such income shall be included in his/her taxable income in Vietnam in accordance with Vietnam’s current tax law and the tax amount eligible for tax exemption or reduction shall be deducted from the tax amount payable in Vietnam. The tax amount eligible for tax exemption or reduction in the Contracting Party is the tax amount which should have been paid by a resident of Vietnam in the Contracting Party on the income derived in that Contracting Party, which, however, according to that Contracting Party’s law, is exempted or reduced as a special preference.

The tax credit is effected on the following principles:

1. Tax already paid or regarded as having been paid in the Contracting Party to be credited means a tax prescribed in the Tax Agreements.

2. The creditable tax amount must not exceed the tax amount payable in Vietnam, which is computed on the income derived in the Contracting Party in accordance with Vietnam’s current tax law.

3. The tax amount paid in the Contracting Party to be credited means a tax amount arising during the period of a tax year in Vietnam.

Article 53. Method of indirect credit

1. In case a resident of Vietnam derives income in the Contracting Party, for which a corporate income tax has been paid before it is divided to him/her/it, and if under such Tax Agreement, Vietnam committed to apply the method of indirect tax credit, when carrying out income tax declaration in Vietnam, such income will be included in the taxable income in Vietnam according to Vietnam’s tax law, and the indirect tax amount already paid in the Contracting Party will be credited against the tax amount payable in Vietnam. However, in all circumstances, the credited tax amount must not exceed the tax amount payable in Vietnam for the overseas income according to Vietnam’s tax law.

The creditable indirect tax amount is the tax amount paid by a joint-stock company being a resident of the Contracting Party in such Contracting Party in the form of corporate income tax before paying dividends to a resident of Vietnam, provided that the resident of Vietnam controls directly a minimum percentage of the voting power of that joint-stock company, depending on each Tax Agreement.

2. Although under the above provision, Vietnam applies the method of indirect tax credit under the Tax Agreement’s commitments, if according to the laws of Vietnam, overseas incomes of a resident of Vietnam are subject to indirect tax credit, this provision may still apply.

Notwithstanding the above provisions on application of methods for elimination of double taxation, if under the Tax Agreements, overseas incomes of a resident of Vietnam are exempted from tax in Vietnam, such incomes will be exempted from tax and the tax amount already paid overseas will not be credited (which means such incomes are taxed only once and not subject to the methods for elimination of double taxation).

The above provisions on methods for elimination of double taxation are included in the Article methods for elimination of Double Taxation of the Tax Agreements.

Section 21

SPECIAL PROVISIONS

Article 54. Settlement of disputes in the application of Tax Agreements

1. For residents of Contracting Parties to Tax Agreements concluded with Vietnam

a) In case a resident of a Contracting Party (below in this Article referred to as complainant) sees that Vietnamese tax agencies determine its/his/her tax obligations at variance with the Tax Agreement, it/he/she may request the competent authority of the Contracting Party of which it is a resident for taxation to commence the mutual agreement procedure under the Tax Agreement.

This provision does not preclude the complainant from lodging a complaint according to the order prescribed by the laws of Vietnam on settlement of complaints or law on administrative procedures;

The competent authority of Vietnam shall not settle a complaint in case the complaint is being or has been settled by a court; or the time limit for lodging the complaint prescribed in Clause 3 of this Article has expired.

b) To lodge a complaint under Point a of this Clause, the complainant shall fulfill the due obligations notified in the taxation decisions (tax-related administrative decisions, tax notices) of the tax agency before and during the course of lodging the complaint. If lodging a complaint about the tax amount calculated or assessed by the tax agency, the complainant shall still fully pay such tax amount, unless the competent state agency decides to suspend the execution of the decision on tax calculation or tax assessment of the tax administration agency.

2. For residents of Vietnam

In case a resident of Vietnam sees that a Contracting Party determines its/his/her tax obligations at variance with the Tax Agreement, it/he/she may request the competent authority of Vietnam to commence the mutual agreement procedure provided in the Tax Agreement. Before requesting the competent authority of Vietnam to do so, the complainant shall fulfill the obligations notified in the taxation decisions of the tax agencies of Vietnam and the Contracting Party, if the law of such State so requests.

3. The complaint under Clauses 1 and 2 of this Article must be lodged within 3 years after the tax agency issues the first notice leading to the taxation which is judged to be incompliant with the Tax Agreement by the complainant.

4. The order and procedures for processing MAP under Tax Agreements shall comply with the guidance in Chapter III of this Circular.

Article 55. Information exchange

1. Principles of exchange of tax information under Tax Agreements and other tax-related treaties to which Vietnam is a contracting party or tax-related international agreements concluded by Vietnam.

a) The collection, provision and exchange of tax information between the Department of Taxation and the competent authorities of partner countries or territories shall be carried out on the principle of reciprocity and in conformity with Tax Agreements, other tax-related treaties or tax-related international agreements;

b) The exchange of tax information shall be carried out in accordance with the scope, methods, conditions and confidentiality requirements prescribed in Tax Agreements, other tax-related treaties or tax-related international agreements, ensuring that information is used for its proper purposes and in compliance with the laws of Vietnam.

2. Collection and exchange of information under Tax Agreements

a) The collection and exchange of information under Tax Agreements shall be carried out through the exchange mechanism between the competent authorities of the Contracting Parties for the application and enforcement of domestic tax laws or Tax Agreements, as the case may be;

b) Information to be exchanged is information that is foreseeably relevant to:

b.1) Applying the provisions of domestic tax laws or Tax Agreements, as the case may be;

b.2) Administering and determining tax obligations;

b.3) Preventing and combating tax fraud and tax evasion.

c) During the processing of MAP dossiers or bilateral or multilateral APA dossiers, when the competent authority of a Contracting Party requests the provision of or explanation regarding information, taxpayers shall provide information at the request of tax agencies to serve the exchange with foreign tax agencies in accordance with the law on tax administration;

d) Tax agencies may use information received from foreign tax agencies for analysis, appraisal and negotiation during the processing of MAP or APA dossiers in accordance with Tax Agreements and the laws of Vietnam;

dd) The request, provision and exchange of information shall not be carried out in respect of requests that are speculative, general, without reasonable grounds or without a clear connection to the tax administration or determination of tax obligations of the relevant subjects.

3. Collection and verification of domestic information

a) To fulfill information exchange obligations under Tax Agreements and serve the processing of MAP and APA procedures, tax agencies shall request state agencies, organizations, individuals and taxpayers to provide relevant information in accordance with law;

b) State agencies, organizations and individuals shall coordinate and provide, explain and supplement information at the request of tax agencies in accordance with law;

c) Tax agencies may apply measures prescribed by law to:

c.1) Collect information;

c.2) Examine, compare and verify information;

c.3) Request explanations or additional information.

d) The collection of information for the exchange of information under Tax Agreements shall not depend on whether such information directly serves domestic tax administration purposes;

dd) Information requested to be provided may include information held by the following organizations and individuals:

dd.1) Banks;

dd.2) Credit institutions and financial institutions;

dd.3) Trustees and agents;

dd.4) Other organizations and individuals holding information in accordance with law regulations.

e) The provision of information under this Article shall not be refused solely because such information constitutes confidential customer information of credit institutions or foreign bank branches;

g) Tax agencies may exercise their information collection powers under the laws of Vietnam to fulfill information exchange obligations under Tax Agreements;

h) For bilateral or multilateral APA dossiers, taxpayers shall provide tax agencies with information similar to that provided to the tax agencies of the Contracting Party to ensure that the competent authorities of the Parties have sufficient grounds to process the dossiers;

i) In case tax agencies have applied necessary lawful measures to collect information but determine that the information no longer exists under the record retention regime or cannot be collected in accordance with the laws of Vietnam, the Department of Taxation shall notify the competent authority of the Contracting Party of its inability to provide the information.

4. Automatic exchange of tax information

a) The collection, administration and exchange of tax information by automatic means shall be carried out in accordance with Tax Agreements, other tax-related treaties or tax-related international agreements concerning the exchange of tax information;

b) Tax agencies shall conduct the automatic exchange of tax information in accordance with the scope, subjects of application, methods of exchange, time limits, data formats and technical requirements prescribed in Tax Agreements, other tax-related treaties, tax-related international agreements and the laws of Vietnam;

c) Relevant agencies, organizations and individuals shall provide information in accordance with law to serve the implementation of automatic tax information exchange mechanisms.

5. Confidentiality and use of information

a) Information received or provided under Tax Agreements, other tax-related treaties or tax-related international agreements must be kept confidential in accordance with the laws of Vietnam and the provisions of Tax Agreements, other tax-related treaties or tax-related international agreements;

b) Information exchanged may only be used for the following purposes and must comply with the provisions of Tax Agreements, other tax-related treaties or tax-related international agreements:

b.1) Applying Tax Agreements;

b.2) Administering and determining tax liabilities;

b.3) Verifying and handling violations of tax laws;

b.4) Settling tax-related complaints, disputes or legal proceedings;

b.5) Implementing MAP or APA procedures.

c) Information exchanged may only be provided to:

c.1) Foreign tax agencies;

c.2) Competent state management agencies;

c.3) Proceeding-conducting agencies;

c.4) Agencies, organizations and individuals directly involved in the determination, collection or enforcement of tax collection or settlement of tax-related disputes. Agencies, organizations and individuals having access to information shall maintain information confidentiality in accordance with law regulations.

d) Information received from foreign tax agencies shall be administered and protected under a confidentiality regime similar to that applicable to information collected by Vietnamese tax agencies in accordance with the laws of Vietnam;

dd) Information may only be used for purposes other than those prescribed at Point b Clause 5 of this Article when permitted by the laws of both Contracting Parties and consented to by the competent authority of the information-providing Party, except for the cases where Tax Agreements or other tax-related treaties permit the use of information without the consent of the information-providing Party.

Article 56. Assistance in tax collection

Vietnam and the Contracting Party shall assist each other in collecting taxes in accordance with the Article Assistance in tax collection of the Tax Agreements concluded by Vietnam, according to the following principles:

1. Vietnam shall request the Contracting Party to assist in expediting the collection of tax debts of individuals, enterprises and organizations in Vietnam when such individuals or legal representatives of such enterprises or organizations in Vietnam reside in the Contracting Party.

2. Vietnamese tax agencies shall assist in expediting tax collection at the request of the Contracting Party in respect of tax debts payable of individuals, enterprises and organizations in the Contracting Party when such individuals or legal representatives of such enterprises or organizations in the Contracting Party reside and conduct production and business activities in Vietnam, in accordance with the law on tax administration and in conformity with Vietnam’s tax administration practices.

3. Vietnamese tax agencies shall assist the Contracting Party in collecting tax by notifying and expediting the payment of tax debts of taxpayers in respect of which the Contracting Party requests tax collection assistance.

4. During the provision of tax collection assistance, Vietnamese tax agencies shall give priority to the collection of tax debts arising in Vietnam.

5. Vietnamese tax agencies shall not provide tax collection assistance at the request of the Contracting Party in the following cases: The tax debt for which collection assistance is requested is under dispute; the provision of assistance requires the application of administrative measures different from those prescribed by the laws or administrative management practices of Vietnam or the Contracting Party; the provision of tax collection assistance is contrary to the laws of Vietnam; the Contracting Party has not applied reasonable measures to recover or secure the tax debt in accordance with its laws; or the administrative burden imposed on Vietnam is disproportionate to the benefits of the Contracting Party.

6. Vietnamese tax agencies shall open temporary collection accounts at the State Treasury and coordinate with the State Treasury in formulating procedures for collection of the tax amounts and transfer of amounts collected under the tax collection assistance mechanism.

Article 57. Immunities of members of diplomatic missions and consular posts

1. Under the Tax Agreements, the provisions of the Tax Agreements do not affect the immunities of members of a diplomatic mission or consular post prescribed in the international treaties which the Socialist Republic of Vietnam has signed or acceded to.

2. The above-said provisions on immunities of members of diplomatic missions or consular posts are included in the Article Members of Diplomatic Missions and Consular Posts of the Tax Agreements.

Chapter III

MUTUAL AGREEMENT PROCEDURES (MAPs)

Section 1

CASES OF REFUSAL OF MAPs

Article 58. Cases in which the competent authority of Vietnam shall refuse requests for application of MAPs

1. The dossiers of request for application of MAPs are not within the competence of the competent authority of Vietnam.

2. A dossier of request for application of a MAP is submitted after the time limit of 03 years (or 02 years, depending on the provisions of the Tax Agreement) from the date on which the Vietnamese tax agency or the Contracting Party, as the case may be, issues a notification of taxation and a resident of the Contracting Party or Vietnam considers that it is inconsistent with the provisions of the Tax Agreement between Vietnam and the Contracting Party.

3. The requester of application of a MAP has not fully performed the obligations notified in the taxation decisions of the Vietnamese tax agency or the Contracting Party, as the case may be, before and during the process of requesting application of the MAP, unless a competent state agency decides to suspend the execution of the tax calculation decision or tax assessment decision of the tax agency.

4. The requester of application of MAP or the related party is undergoing tax examination and no official tax examination record has been issued.

5. There are grounds to determine that the requester of application of MAP abuses or requests application of MAP to obtain tax benefits contrary to the object and purpose of the Tax Agreement or to commit tax avoidance or tax evasion.

6. The Department of Taxation determines that the tax obligations of the requester of application of MAP are consistent with the provisions of the Tax Agreement.

In case of refusal of a request for application of MAP, the competent authority of Vietnam shall issue a Notice on refusal of the MAP application request, made according to the Form No. 03/MAP in the Appendix issued together with this Circular (or a letter of refusal of the MAP application request to the competent authority of the Contracting Party).

Section 2

PROCESS FOR HANDLING REQUESTS FOR APPLICATION OF MAP

Article 59. Order of handling requests for application of MAPs

The order of handling requests for application of a MAP includes the following stages:

1. Receiving dossiers of request for MAP (from taxpayers and foreign tax agencies).

2. Reviewing and analyzing dossiers of request for MAP.

3. Exchanging positions, conducting MAP negotiation and obtaining taxpayers’ written confirmation of the exchange results.

4. Concluding and implementing MAP.

Article 60. Receipt of dossiers of request for application of MAPs

1. Receiving dossiers of request for application of MAPs from taxpayers being residents of Vietnam:

a) Taxpayers shall submit dossiers of request for application of MAPs to the Department of Taxation. Such a dossier must comprise:

a.1) A written request for application of the mutual agreement procedure, made according to the Form No. 01/DTA-MAP in the Appendix issued together with this Circular;

a.2) Financial statements and tax declarations relating to the request for application of MAP;

a.3) Documents relating to the notification of determination of tax obligations of a foreign tax agency or Vietnamese tax agency;

a.4) The taxpayer’s related-party transaction pricing dossier for the tax period for which application of MAP is requested (for a MAP concerning transfer pricing);

a.5) Information, documents, contracts and detailed factual descriptions of transactions and activities relating to the determination of tax obligations; the basis for the arguments of the requester of application of MAP that the foreign tax agency’s application of a provision of the Tax Agreement is inconsistent with the Tax Agreement; and the requester’s analysis relating to the determination of tax obligations;

a.6) Documents proving tax payment in case the requester has paid the tax amount relating to the request for application of MAP;

a.7) A copy of the written request for application of the MAP procedure and accompanying documents in case the requester has submitted or will submit a request for application of MAP to a foreign tax agency;

a.8) A copy of the written complaint and accompanying documents in case the requester has submitted or will submit a written complaint under another complaint settlement mechanism within or outside Vietnam, and the complaint settlement result (if any).

b) After receiving a complete dossier of request for application of MAP from a taxpayer being a resident of Vietnam, the Department of Taxation shall conduct MAP with the foreign tax agency in accordance with the Tax Agreement and the order and procedures guided in this Circular.

In case the taxpayer is unable to provide all information and documents as required for the dossier of request for application of MAP, the taxpayer shall provide a written explanation, made according to Form No. 01/DTA-MAP in the Appendix issued together with this Circular for consideration and decision by the Department of Taxation.

2. Receiving requests for MAPs from tax agencies of Contracting Parties:

In case the competent authority of Vietnam receives a request for MAP from the tax agency of a Contracting Party, the competent authority of Vietnam shall send the competent authority of the Contracting Party a confirmation letter on receipt of the request for application of MAP.

Article 61. Review and analysis of dossiers of request for MAPs

1. For a dossier of request for MAP from a taxpayer:

a) Reviewing the dossier of request for MAP

The Department of Taxation shall examine the completeness and validity of the dossier and clarify the information and documents necessary to determine whether the request for MAP falls within the scope of, and satisfies the conditions for, application of MAP under the Tax Agreement.

Upon completion of the review, the Department of Taxation shall:

a.1) Notify the taxpayer in writing of the acceptance of the request for application of MAP, using the Form No. 02/MAP in the Appendix issued together with this Circular; or

a.2) Notify the refusal of the request for application of MAP, using the Form No. 03/MAP in the Appendix issued together with this Circular; or

a.3) Issue a Notice on request of additional information and documents, made according to the Form No. 01/TB-BSTT-NNT issued together with Circular No. 89/2026/TT-BTC.

b) The Department of Taxation shall analyze the dossier of request for application of MAP on the basis of a comprehensive review of information and documents provided by the taxpayer and comparison thereof with the provisions of Tax Agreements and domestic tax laws for assessment of the reasonableness, completeness and grounds of the request. During this process, the Department of Taxation may request the taxpayer or the competent authority of the Contracting Party to the Tax Agreement to provide additional information and documents, and shall proactively coordinate with units within the tax sector and relevant agencies, organizations and individuals to collect, examine and verify information and factual evidence, as well as refer to international practices and experience in handling similar MAP cases, to ensure the objective handling of dossiers in conformity with law regulations and international standards.

2. For a request for MAP from a tax agency of the Contracting Party

a) The Department of Taxation shall conduct exchanges with the tax agency of the Contracting Party to process the request for MAP in accordance with the relevant Tax Agreement;

b) Taxpayers in Vietnam and relevant agencies, organizations and individuals shall provide information and documents at the request of the Department of Taxation to serve the processing of the request for MAP.

Article 62. Unilateral resolution of requests for application of MAPs

1. Unilateral resolution means the Department of Taxation’s determination that a request for application of MAP from a taxpayer being a resident of Vietnam is consistent with the provisions of the relevant Tax Agreement and that it is not necessary to exchange position papers or conduct negotiations with the tax agency of the Contracting Party.

2. The Department of Taxation shall notify the taxpayer and the tax agency of the Contracting Party in case the request for application of MAP has been resolved unilaterally.

Article 63. Exchange of position papers, MAP negotiation and opinions of taxpayers

1. Exchange of position papers: The Department of Taxation shall exchange with the competent authority of the Contracting Party the position paper of each Party to resolve taxation that is inconsistent with the provisions of the relevant Tax Agreement.

2. MAP negotiation: After exchanging position papers, in case no agreement has been reached through written exchanges, the Department of Taxation shall conduct negotiations with the competent authority of the Contracting Party in person, online or by telephone.

3. In case a request for MAP is made by a taxpayer: after the process of exchanging position papers and conducting MAP negotiation is completed and the two competent authorities reach a mutual agreement, the Department of Taxation shall send a written request to the taxpayer to state whether it objects or does not object to the above-mentioned draft mutual agreement.

In case the mutual agreement does not resolve the double taxation or taxation inconsistent with the provisions of the Tax Agreement in respect of the taxpayer’s case, the Department of Taxation shall notify the taxpayer thereof in writing.

The taxpayer may not accept only part of the draft mutual agreement (certain issues or tax periods in the draft mutual agreement). In complex cases, if the Department of Taxation and the competent authority of the Contracting Party consider that it’s difficult to reach a mutual agreement, they may divide the proposed agreement into separate parts.

Article 64. Closure of dossiers of request for application of MAPs

A dossier of request for a MAP shall be closed in the following cases:

1. Unilateral resolution as guided in Article 62 of this Circular.

2. Withdrawal of a request for MAP

a) The Department of Taxation shall close a MAP dossier in case the taxpayer submits a written request for withdrawal of the MAP dossier or when receiving a notification from the competent authority of the Contracting Party that the taxpayer of the Contracting Party has withdrawn its request for MAP;

b) A request for MAP may be withdrawn at any time before the mutual agreement on MAP is concluded. The taxpayer may not withdraw partially the request for MAP.

3. The request for application of MAP is closed on the basis of the results of negotiations between the competent authority of Vietnam and the competent authority of the Contracting Party.

4. Any other reason that prevents the dossier of request for MAP from being processed, including the following reasons: the taxpayer becomes bankrupt, is dissolved or ceases to exist; or although a MAP agreement has been reached, it cannot be implemented under the relevant Tax Agreement or the domestic tax laws of either Contracting Party.

Upon closing the MAP dossier, the Department of Taxation shall send a notice to the taxpayer, made according to the Form No. 04/MAP in the Appendix issued together with this Circular.

Section 3

IMPLEMENTATION OF MAPs

Article 65. Implementing MAPs and monitoring and supervising the implementation of MAPs

On the basis of the mutual agreement agreed upon in writing between the two competent authorities and the taxpayer’s consent, a MAP shall be implemented as follows:

1. The Department of Taxation shall send an official letter to the tax agency directly managing the taxpayer, requesting it to implement tax administration measures in accordance with regulations, and concurrently send the letter to the relevant taxpayer for information and implementation.

2. The tax agency directly managing the taxpayer shall adjust the tax base or implement other necessary tax administration measures in accordance with the written guidance of the Department of Taxation. The relevant taxpayer shall comply with the guidance of the tax agency.

3. In case the implementation of a MAP agreement results in paid amounts of tax, other amounts, late-payment interest or fines exceeding the payable amounts, the tax agency shall adjust the tax obligations, determine the overpaid amounts and handle them in accordance with the law regulations on tax administration regarding the handling of overpaid amounts of tax, other amounts payable, late-payment interest and fines.

4. The Department of Taxation shall monitor and supervise the implementation of MAPs.

5. A MAP agreement shall apply only to the specific case and relevant tax periods and shall not constitute a precedent for application to other cases, taxpayers or tax periods.

Chapter IV

ADVANCE PRICING AGREEMENT

Section 1

REQUESTS FOR APPLICATION OF APAs

Article 66. Subjects requesting the application of APAs

Organizations producing and trading in goods and services that pay corporate income tax based on declaration, have transactions with their related parties, and file requests to tax agencies for the application of APAs. Related parties are specified in Article 5 of Decree No. 255/2026/ND-CP.

Article 67. Transactions requested for application of APAs

1. Transactions requested for application of APAs are related-party transactions specified in Clause 1, Article 4 of Decree No. 255/2026/ND-CP.

2. Transactions requested for application of an APA under Clause 1 of this Article must concurrently meet the following conditions:

a) The transactions have actually arisen in production and business activities of the concerned taxpayer and will continue to occur in the period during which the application of the APA is requested;

b) There are grounds to determine the substance of the transactions deciding tax liability and grounds to analyze and compare transactions and select independent comparables according to Articles 6 and 7 of Decree No. 255/2026/ND-CP on the basis of the information and data specified in Clause 3, Article 31 of the Law No. 108/2025/QH15 on Tax Administration;

c) The transactions are not involved in tax-related disputes or complaints concerning such related-party transaction;

d) The transactions are carried out transparently and not for the purpose of tax evasion or avoidance or abusing the concerned Tax Agreement.

Article 68. Types of APAs

1. Unilateral APA means an agreement concluded between a Vietnamese tax agency and a taxpayer requesting the application of the APA.

2. A bilateral APA means an agreement concluded between a Vietnamese tax agency and a counterpart tax agency on the basis of a Tax Agreement to determine the method for determining prices of related-party transactions covered by the APA of the taxpayer requesting application of the APA.

3. A bilateral APA means an agreement concluded between a Vietnamese tax agency and multiple counterpart tax agency on the basis of Tax Agreements to determine the method for determining prices of related-party transactions covered by the APA of the taxpayer requesting application of the APA.

Article 69. Competence to process APA dossiers

1. Bilateral and multilateral APAs:

a) The Department of Taxation shall assume the prime responsibility for receiving dossiers, reviewing and analyzing them, and formulating plans for the negotiation, conclusion, revision, extension, revocation or cancellation of APAs.

In case an APA is complex, involves multiple countries or concerns matters within the management scope of multiple state agencies, the Department of Taxation shall report to the Ministry of Finance for its opinions on the APA negotiation plan before conducting official exchange and negotiation with counterpart tax agencies;

b) The tax agency directly managing the taxpayer requesting application of APA shall examine and supervise the implementation of the concluded APA.

2. Unilateral APAs: The competence to receive, review, analyze and process dossiers of request for application of unilateral APAs shall be decided by the Department of Taxation and assigned to units within tax agencies to perform such tasks in accordance with regulations.

Section 2

PROCESS FOR HANDLING REQUESTS FOR APPLICATION OF APAs

Article 70. Order of handling requests for application of APAs

Before submitting an official dossier, a taxpayer may request the tax agency to hold a consultation meeting for preliminary discussion of the scope of transactions, methods for determining prices of related-party transactions, dossiers, documents and information and data relating to the request for application of APA. A consultation meeting is not a mandatory procedure before submission of a dossier of request for application of APA.

A request for application of APA shall be processed in the following order:

1. Submission of an official dossier.

2. Review, analysis and formulation of a negotiation plan.

3. Talks and negotiations on the contents of APA.

4. Conclusion and circulation of APA.

Article 71. Submission of official dossiers

1. Taxpayers shall submit official requests for application of APA, made according to the Form No. 01/APA-DN in the Appendix issued together with this Circular.

2. A dossier of request for application of APA shall be prepared in Vietnamese; in case of a dossier of request for application of a bilateral or multilateral APA, the dossier shall be prepared in Vietnamese and accompanied by an English translation; original documents written in another language must be accompanied by Vietnamese translations and English translations (for bilateral or multilateral APA dossiers) together with the original documents. The taxpayer shall sign and affix the seal to the translations and be held responsible before law for the contents thereof.

In case a dossier contains a large volume of attachments and the translation of all contents of the attachments into Vietnamese for submission within the same time limit as the dossier of request for application of APA is inappropriate, the taxpayer shall summarize the contents, explain the reasons and specify the place and method of document storage so that the tax agency may access and examine the documents upon request.

3. For bilateral or multilateral APAs, the information and data contained in dossiers submitted to Vietnamese and foreign tax agencies must be consistent and no less than the information and data prescribed in this Article.

Article 72. Review and analysis of dossiers of request for application of APAs

1. Tax agencies shall review and analyze taxpayers’ dossiers of request for application of APAs so as to inspect, compare, determine and evaluate the adequacy, accuracy, lawfulness, reasonability and validity of information and data provided by taxpayers; and, on that basis, determine methods for determining prices of related-party transactions and comparables suitable for the determination of prices, profit ratios or profit allocation ratios with regard to the transactions covered by the APAs requested for application.

2. In the course of review and analysis, tax agencies may apply the following measures:

a) Requesting taxpayers and other related organizations and individuals to explain and clarify information in dossiers of request for application of APAs;

b) Applying tax administration measures to taxpayers to verify the adequacy, accuracy, lawfulness, reasonability and validity of information and data provided by taxpayers.

3. During the review and analysis of dossiers, tax agencies and taxpayers shall make minutes recording the results of meetings or on-site surveys at taxpayers’ offices; the representatives of the tax agencies responsible for processing the APA dossiers or the heads of the survey teams shall sign the minutes.

4. For a dossier of request for application of bilateral or multilateral APA, if the tax agency of a Contracting Party requests a taxpayer to provide or explain information or data (regardless of whether such information or data is included in the initially submitted dossier or the subsequently supplemented dossier), the taxpayer shall provide such documents to the tax agency to ensure that the competent authorities of all tax agencies participating in the APA are provided with consistent and sufficient information for processing the dossier.

5. In case, during the processing of a dossier, a tax agency needs to exchange information with the tax agency of a Contracting Party, the taxpayer shall also be generally notified of the contents of the information exchanged, and information received shall be used as documents and evidence in the negotiation and conclusion of the APA, except where such information may not be disclosed to the taxpayer under the provisions on exchange of information under the Tax Agreement. Information exchanged must be kept confidential in accordance with Clause 5 Article 55 of this Circular.

Article 73. Mutual agreement procedure

1. A taxpayer being a tax resident of Vietnam that requests application of a bilateral or multilateral APA and requires the tax agency to contact and initiate discussion and negotiation with the tax agency of a Contracting Party shall, upon submission of the official dossier, complete the information according to Form No. 01/APA-DN in the Appendix issued together with this Circular, including:

a) An explanation of the reasons for requesting application of bilateral or multilateral APA;

b) A summary of the reasons for requesting implementation of the mutual agreement procedure;

c) Relevant documents issued by the tax agency of the Contracting Party (including but not limited to: notices or decisions on retrospective tax collection or adjustment of tax obligations that may result in double taxation of income from related-party transactions).

2. After receiving the request for implementation of the mutual agreement procedure and the official dossier of request for application of APA, the competent authority of the Department of Taxation shall contact and conduct exchanges with the competent authority of the tax agency of the Contracting Party in accordance with the provisions on the mutual agreement procedure under the relevant Tax Agreement.

Article 74. Talks and negotiations on the contents of APAs

1. Tax agencies shall talk and negotiate APA contents with taxpayers in case of requests for application of unilateral APAs or with tax agencies of Contracting Parties in case of requests for application of bilateral or multilateral APAs to reach agreement on methods for determining prices of related-party transactions, comparables, critical assumptions and other contents covered by the APAs.

Talks and negotiations shall be conducted through meetings, in-person discussions, telephone calls, videoconferences or written correspondence. The results of each talk or negotiation shall be acknowledged in writing by related parties.

2. While bilateral or multilateral talks and negotiations are carried out among related tax agencies, when necessary and permitted by the Department of Taxation and counterpart tax agencies of the Contracting Parties, taxpayers may appoint their representatives to attend these talks and negotiations at the invitation of tax agencies to give explanations about related issues.

Tax agencies shall talk to taxpayers about the progress of dossier processing and may notify taxpayers of summarized information on negotiation results in conformity with the provisions on information confidentiality and the scope of talks with tax agencies of Contracting Parties; and may concurrently request taxpayers to explain relevant contents.

3. During talks and negotiations concerning new APA dossiers or dossiers of request for extension of APAs, tax agencies may refer to information, data and contents exchanged during the processing of previous APA dossiers that are appropriate to the actual circumstances of taxpayers and the periods for which application of APAs is requested.

Article 75. Cessation of the processing of dossiers of request for application of APAs before conclusion

1. A tax agency shall cease the processing of a dossier of request for application of APA upon occurrence of any of the following cases:

a) Continued processing of the request for application of APA fails to satisfy the principles of application of APA prescribed in Article 4 of this Circular;

b) The relevant parties fail to reach agreement on the APA contents before the end of the stage of request for application of APA;

c) The tax agency applies tax administration measures and discovers that the taxpayer has provided incorrect, incomplete or untruthful information affecting the determination of prices of related-party transactions or the APA results, without appropriate grounds or documents for explanation or substantiation;

d) The taxpayer or counterpart tax agency requests cessation of the processing of the request for application of APA.

2. The tax agency shall notify the concerned taxpayer (for unilateral APAs) or notify the concerned taxpayer, concurrently notify or certify the cessation of the processing of the request for application of APA to/with foreign tax agencies (for bilateral or multilateral APAs).

Article 76. Conclusion and circulation of APAs

1. A draft APA, after all of its contents have been agreed upon by the tax agency and the taxpayer or by the relevant tax agencies, shall be referred to as the final draft and shall be concluded and circulated.

2. The final draft APA must include at least the following contents:

a) Names and addresses of the related parties participating in the APA;

b) Description of the related-party transactions covered by the APA;

c) The method for determining prices of related-party transactions as the basis for tax calculation; methods for determining and calculating data on prices, gross profit ratios, net profit ratios and profit allocation ratios as the basis for tax calculation in relation to related-party transactions covered by the APA (including the range of arm’s length transaction values, if appropriate);

d) Assumptions that may have material and significant effects on the implementation of the APA (including analyses and forecasts);

d) Provisions on the responsibilities and obligations of the taxpayer;

e) Provisions on the responsibilities and obligations of the tax agency;

g) Provisions on the effect;

h) Other provisions consistent with legal provisions on the performance of tax obligations relating to the APA;

i) Appendices (if any).

3. For a unilateral APA, the final draft shall be sent by the tax agency together with a written notice of its official conclusion; the at-law representative of the taxpayer shall sign and affix the seal to the final draft APA and return it to the tax agency for signature and circulation.

4. For a bilateral or multilateral APA, the Department of Taxation shall prepare the final draft based on the terms agreed upon between the Department of Taxation and the tax agency of the Contracting Party and send it to the taxpayer together with an official letter requesting the taxpayer to respond in writing regarding its acceptance of the contents of the final draft. The competent authorities of the tax agencies participating in the APA shall conclude the bilateral or multilateral APA. The Department of Taxation shall notify and organize the implementation of the bilateral or multilateral APAs.

5. The official language used in a unilateral APA is Vietnamese; the official language used in a bilateral or multilateral APA is English, accompanied by a Vietnamese translation.

Section 3

IMPLEMENTATION OF APAs

Article 77. Adjustment of taxable income during the implementation of APAs

1. During the validity period of an APA, the taxpayer shall adjust its taxable income in conformity with the price, gross profit ratio, net profit ratio or profit allocation rate prescribed in the APA for tax declaration and payment in accordance with regulations.

2. In case events arising during the implementation of an APA change or no longer satisfy the critical assumptions of the concluded APA, the taxpayer shall promptly report them to the tax agency and request modification or cancellation of the APA in accordance with Articles 79 and 80 of this Circular.

3. During the validity period of an APA, the taxpayer shall periodically provide APA compliance reports and relevant information and documents for the tax agency to monitor and supervise the implementation of the APA within the time limit for submission of corporate income tax finalization dossiers prescribed by the law on tax administration. An annual APA compliance report shall include at least the following contents:

a) Application of the method for determining prices of related-party transactions and implementation of the APA terms during the tax period;

b) Results of transactions covered by the APA compared with the prices, profit ratios, profit allocation ratios or indicators agreed upon in the APA;

c) Financial information, production and business results and information relating to transactions covered by the APA according to the contents of the concluded APA;

d) Continued satisfaction of the critical assumptions of the APA and material changes (if any) affecting the APA.

Article 78. Extension of APAs

1. An APA may be extended for no more than 03 years.

2. An APA may be considered for extension in the following cases:

a) There are no material changes to the scope of related-party transactions and the related parties;

b) There are no material changes to the assumptions;

c) The range of arm’s length transaction values or profit ratios serving as the basis for comparability analysis remains appropriate for continued application during the period for which extension is requested, based on the critical assumptions of the APA.

3. Procedures for extension of an APA:

a) A taxpayer requesting extension of an APA shall submit a request, made according to the Form No. 01/APA-DN in the Appendix issued together with this Circular and submit the APA extension dossier to the tax agency at least 6 months before the concluded APA expires;

b) The procedures for processing an APA extension dossier shall be carried out in the same manner as the procedures for an official request for application of APA.

Article 79. Revision of APAs

1. An APA shall be revised at the request of the taxpayer or the tax agency.

2. Cases of revision of an APA:

a) The critical assumptions change, affecting the implementation of the APA;

b) Changes in law affect the APA;

c) The competent authority of the tax agency of the Contracting Party requests revision of the APA and the Department of Taxation consents thereto.

3. The procedures for processing a request for revision of an APA shall be carried out in the same manner as the procedures for processing a request for application of APA.

Article 80. Cancellation of APAs

1. An APA may be canceled in the following cases:

a) The taxpayer or any related party involved in a related-party transaction fails to comply with the terms and conditions of the APA;

b) The taxpayer makes an error or material fault in the dossier of request for application of APA that affects the implementation of the APA;

c) The taxpayer and the tax agency fail to reach agreement on the APA’s contents subject to revision;

d) The taxpayer fails to fulfill its obligations to report or provide information under the APA at the request of the tax agency, affecting the monitoring, supervision or implementation of the APA;

dd) The tax agency of the Contracting Party requests the cancellation of the APA and the Department of Taxation consents thereto;

e) The taxpayer submits a dossier of request for cancellation of the APA on reasonable grounds.

2. A taxpayer requesting cancellation of an APA shall submit a request made according to the Form No. 01/APA-DN in the Appendix issued together with this Circular.

3. The tax agency shall issue a written notice of cancellation of the APA. Such a document shall include:

a) The reason for cancellation;

b) The effective date of cancellation of the APA.

4. From the effective date of cancellation of an APA, the taxpayer shall fulfill tax obligations arising from the transactions referred to in the canceled APA in accordance with current regulations on the determination of prices of related-party transactions.

Article 81. Revocation of APAs

1. An APA may be revoked in the following cases:

a) The taxpayer intentionally provides false information or commits fraud affecting the determination, conclusion or implementation of the APA;

b) The tax agency of the Contracting Party requests revocation of the APA and the Department of Taxation consents thereto.

2. The tax agency shall issue a written notice of revocation of the APA. The notice shall include the following contents:

a) The reason for revocation;

b) The effective date of revocation of the APA (calculated from the first day of the APA application period).

3. From the effective date of revocation of an APA, the taxpayer shall fulfill tax obligations arising from transactions covered by the revoked APA in accordance with current regulations on the determination of prices of related-party transactions.

Article 82. Information confidentiality

1. Tax agencies, taxpayers and related agencies, organizations shall keep confidential information and data used throughout the course of processing APA dossiers according to provisions on confidentiality of taxpayers’ information in Article 7 of the Law No. 108/2025/QH15 on Tax Administration and guiding documents and relevant Tax Agreements.

2. Information and data provided by taxpayers during the request, exchange, negotiation, conclusion, revision, extension and implementation of APAs shall be administered and used by tax agencies for processing, monitoring and supervising the implementation of APAs; and shall not be used directly as evidence, documents or grounds for tax examination or tax assessment in respect of taxpayers, except for the cases where such information and data have been publicized by taxpayers or collected by tax agencies from independent information sources in accordance with law regulations.

Article 83. Effect of APAs

1. Concluded APAs are binding on tax agencies and taxpayers.

2. Taxpayers may request application of APAs for a continuous period of up to 05 tax years commencing from the year of submission of dossiers of request for application of APAs or the immediately following tax year, but not exceeding the actual number of years during which taxpayers have conducted production and business activities and declared and paid corporate income tax in Vietnam.

3. The validity period of a concluded APA shall be up to 03 tax years commencing from the tax period in which the APA is concluded or from the year immediately following the year of conclusion, as agreed upon by the tax agency and the taxpayer in the APA.

CHAPTER V

IMPLEMENTATION PROVISIONS

Article 84. Effect

1. This Circular takes effect on July 01, 2026.

2. This Circular replaces Circular No. 205/2013/TT-BTC dated December 24, 2013 of the Minister of Finance guiding the implementation of the Agreements on avoidance of double taxation avoidance and prevention of fiscal evasion with respect to taxes on income and property between Vietnam and other countries currently in force in Vietnam; and Circular No. 45/2021/TT-BTC dated June 18, 2021 of the Minister of Finance guiding the application of the Advance Pricing Agreement mechanism in tax administration for enterprises having related-party transactions.

3. The procedures for application of Tax Agreements shall comply with the Law on Tax Administration and Circular No. 89/2026/TT-BTC.

4. Dossiers of request for application of APAs submitted before the effective date of this Circular but for which APAs have not yet been concluded and in which the period of request for application of APAs has not ended by the effective date of this Circular shall continue to be processed in accordance with the Law on Tax Administration No. 108/2025/QH15 and the guidance in this Circular.

5. Any difficulties arising in the course of implementation should be promptly reported to the Ministry of Finance for research and resolution./.

* All Appendices are not translated herein