Công văn 1664/TCT-HTQT

To : Department of Taxes of provinces and cities under the central authority

In order to implement the Treaties for avoidance of double taxation which the Government of Vietnam has entered into with governments of foreign countries :

Pursuant to the contents provided in the Treaties and in exercising the powers provided for in paragraph 1, Article 3 of the Treaties;

The General Department of Taxes hereby explains and provides guidance for implementation of the Treaties as follows :

A - MAIN CONTENTS OF TREATIES

I. SCOPE OF APPLICATION :

Pursuant to the provisions of Article 1,2 and paragraph 1(a) and 1(b) of Article 3 of the Treaties for avoidance of double taxation, the scope of application covers :

1. Taxes of the nature of direct taxation which are levied on profits or income. This refers to the current taxes in Vietnam which are profits tax, income tax for high income earners, profit remittance tax, income tax in respect of royalties and other taxes of a similar nature to the foregoing taxes which Vietnam will from time to time introduce (if any). Indirect taxes such as turnover tax, VAT, special sales tax, export duties, import duties are not covered in the Treaties (they are covered by the domestic laws of Vietnam).

2. All entities comprising individuals, companies, enterprises or any organizations considered as a company or an enterprise (from a tax point of view) etc. which are subject to taxation in accordance with provisions of tax laws of Vietnam as well as tax laws of other Contracting States.

3. A Treaty only has effect within the national territories of Vietnam and the other Contracting State.

II. CONTENTS OF THE TREATIES :

The Treaties for avoidance of double taxation which Vietnam has signed with other countries generally comprise 30 Articles. In certain Treaties, there may be a Protocol or Exchange of Notes attached to the Treaty to explain the content of a number of provisions in the Treaty if such provisions require greater detail.

The protocol forms a part of the Treaty and has the same legal binding as other provisions of the Treaty. The Exchange of Notes is of lower legal standing which may be amended or added without following the procedures for Treaty amendment and addition.

The provisions of the Treaty include the following :

1. Article 1 and Article 2 contain provisions which specify the persons to whom the Treaty applies and the taxes it covers.

2. Article 3 contains the definition of terms used in the Treaty. Therefore, terms which may be construed differently in different provisions are to be interpreted in accordance with the meaning defined in this Article. Terms which are not defined in this Article are to be interpreted in accordance with the laws of Vietnam and laws of the other Contracting State as the context requires.

3. Article 4 contains provisions concerning standards for determination whether an individual, enterprise or company etc. is a resident of Vietnam or the other Contracting State.

For proper implementation, first of all determine whether a person is a resident of one of either two States i.e. determine whether or not such person is a tax resident of Vietnam or the other Contracting State. Secondly, determine the State of which such person is a resident because according to the provisions of the Treaties certain items of income are only taxable in the State of which the person is a resident or taxable in both States. However, in a State where the person is not a resident and a beneficiary, taxation is only carried out in accordance with the rate prescribed in the Treaties such as items of income specified in Article 10 "Dividends", Article 11 "Interest" and Article 12 "Royalties".

a- Where a person is an individual and is a resident of both States,  the following criteria will be used to determine whether or not such a person is a resident of Vietnam under the Treaty

+ If the individual has a habitual abode in Vietnam then he will be considered as a resident of Vietnam;

+ If the individual has a habitual abode in both States and however, has closer economic and personal relations (parents, spouse, children) with Vietnam then he will be considered as a resident of Vietnam;

+ If above situations are not considered and these individual resides permanently in Vietnam then he will be considered as a resident of Vietnam.

+ If the individual resides permanently in both States or in neither Sates then he will be considered as a resident of a [third] State of which he is a citizen and in which case the Ministry of Finance of Vietnam and the Ministry of Finance of the other Contracting State will determine through mutual agreement which State the individual is a resident of.

b- Where an entity is a company, enterprise, association etc. (other than an individual) and is a resident of both States, the following criteria will be used to determine whether or not such entity is a resident of Vietnam;

+ If the business of such entity is incorporated or registered in Vietnam then it will be considered as resident of Vietnam;

+ If the business of such entity is incorporated or registered in both States, it will be considered as a resident of Vietnam if it has an actual place of management in Vietnam.

4. Article 5 provides the criteria for determination of permanent establishment. This is an important factor in the implementation of Treaties. Per Article 7, a foreign company is only subject to profits tax in Vietnam if it operates in Vietnam through a permanent establishment.

According to the Treaties, the term "permanent establishment" is used to refer to a fixed place through which a foreign company or enterprise carries on its business wholly or partly in Vietnam.

With the exception of special cases, in general a foreign company will be considered as a resident of Vietnam if :

a) It has in Vietnam a place of management, a branch, an office, a factory, a production plant, a mine, an oil or gas well etc. or a quarry or any other place of extraction of natural resources;

b) It has in Vietnam a building site or construction or installation project or an operation to supervise such building site or construction or installation project where it lasts more than 183 days;

c) It has in Vietnam a broker, general commission agent or any other agent provided that such agents are acting wholly or mostly on its behalf;

d) It has in Vietnam a person (including individual, company and any organization) acting on its behalf in the following capacities:

+ The person has the authority to enter into contracts in its name and exercises that authority on regular basis;

+ The person has no authority to enter into contracts in the company's name but regularly represents the company in carrying out delivery of goods in Vietnam;

e) It is carrying on a service including consultancy service in Vietnam through its employees or any other persons in Vietnam appointed by itself provided that such service lasts for a period or an aggregate of more than 183 days in 12 consecutive months;

5. Article 6 "Income from Immovable Property" provides that all income items derived from direct use and/or lease of all types of immovable property shall be subject to tax in the State where the immovable property is situated. Therefore, if an immovable property is situated in Vietnam then the income derived from such property will be chargeable to tax in Vietnam regardless the question that whether or not the beneficiary of such income is a resident of Vietnam or whether or not the company has a permanent establishment in Vietnam.

6. Main contents of Article 7 provide that a foreign company will be only liable to Vietnam's tax if it has a permanent establishment in Vietnam and its profits tax liability is assessed only on the profit earned by the foreign company from such permanent establishment.

In practice, however, determination of profits of a permanent establishment is usually difficult. Therefore, the Article 7 of the Treaties for avoidance of double taxation which have been entered into between Vietnam and other States often contains the provisions below which differ from the above principles :

a) Profits of a foreign company may be attributed to its permanent establishment in Vietnam using certain simple methods for determination such as revenue, quantity of works etc.

For example. A is foreign company which has a permanent establishment in Vietnam. It has a revenue derived from the permanent establishment of 100. Gross revenue of the company is 1000 and its gross profits is 300. The profit of Company A which is attributable to its permanent establishment in Vietnam is to be determined as follows :

Profits attributable    Revenue derived

to Company A's          from the permanent

permanent establishment in Vietnam

in Vietnam                                     Gross profit

=                       ------------------  X  Company A

                        Gross revenue of

                         Company A

Profit attributable to the permanent establishment = 100/1000 * 3000 = 30

b) Where a permanent establishment fails to provide a sufficient and adequate basis for taxation another method may be used such as apportionment of profits based on revenue in accordance with the existing regime provided in Circular 30 TC/TCT dated 18 July 1992 and the tax regime that applies to foreign contractors who carry on business in Vietnam in accordance with the law on Foreign Investment in Vietnam and Circular No. 07 TC/TCT dated 30 March 1992 regarding taxation of foreign subcontractors in oil and gas industry.

7. Article 8, "Shipping and Air Transport" provides that profits derived from the operation of international transport (of cargo and passengers) by airlines or shipping companies will be taxable only in the State of which the airlines/companies are a resident or in which the airlines/companies have an actual place of management.

For example:

Although Vietnam National Airlines has passenger and cargo flights from Vietnam to Singapore and vice versa, It is chargeable to profits tax only in Vietnam because It is a resident of Vietnam. Similarly, Singapore Airlines is chargeable to profits tax only in Singapore.

8. Article 9, "Associated Enterprises" provides that Vietnam and the States contracting to a Treaty for avoidance of double taxation with Vietnam have the right to impose their respective provisions dealing with movement of costs between associated enterprises and enterprises which have economic relations which differ from those which would be made between independent enterprises.

For example :

The economic relation between a foreign company and its enterprises with 100% foreign owned capital in Vietnam will not be considered as a relation between two independent enterprises and under the Treaty, Vietnam has the right to redetermine such economic relation in accordance with the market price for adjustment of profits derived from the operation in Vietnam of such enterprise with 100% foreign owned capital.

9. Contents of Article 10 "Dividends", Article 11 " Interest" and Article 12 "Royalties" provide that Vietnam and the other Contracting State have the right to charge income tax on dividends, interest and royalties in accordance with the principle that tax is to be charged at source.

Example 1: If Company A, a Vietnam joint stock company pays dividends to its shareholder (a Thai company or individual) who is a resident of Thailand, then Vietnam has the right to tax these dividends. Although the shareholder is not a resident in Vietnam, the dividends are however derived from Vietnam.

Example 2: Company A, a resident of Vietnam has borrowed from Company B, a resident of Thailand a loan of 1,000 dong at 10% per annual interest rate. The annual interest derived from such loan is 100 dong. Upon payment to Company B by Company A, Vietnam has the right to tax this interest because such interest is derived from Vietnam.

Example 3: Company A, a resident of Thailand has engaged in a transfer of technology to Company B, a resident of Vietnam. Upon Company B's payment to Company A for the acquisition or use of the foresail technology, Vietnam has the right to impose tax in Vietnam on the such payment.

In addition to the above, contents of Article 10, Article 11 and Article 12 provide the tax rate limits which are to be applied in each State where the recipient is the beneficiary i.e. in respect of dividends, interest and royalties, a State has the right to tax these items if they are derived in that State but such taxation must not exceed the rate prescribed in the Treaty. In the Treaties between Vietnam with other States, this tax rate limit is usually 10%. This rate is usually stated in paragraph 2 of Article 10, 11 and 12 of the Treaties for avoidance of double taxation.

10. Contents of Article 13 "Capital gains" provides that gains from the alienation of property may be taxed in both States. However, a few types of such against may be taxed only in the State of which the alienator is a resident such as the following cases :

* Gains from the alienation of ships or aircraft and movable property used in the operation of international traffic or from the alienation of movable property pertaining to the operation of such ships or aircraft.

* Gains from the alienation of debentures or shares (excluding the alienation of shares or debentures of a company whose property mainly comprises immovable property).

11. Contents of Article 14 "Independent Personal Services" provide that income derived by an individual from professional activities including scientific, literary, artistic, educational or teaching activities as well as activities of physicians, surgeons, lawyers, architects, dentists and accountants shall be taxable in both States if:

- That individual has in the other State one or more fixed places of business (office or base which is available to him on regular or irregular basis) for the purpose of performing his activities; or - His stay in the other State is for a period or periods amounting to or exceeding the aggregate 183 days in any twelve consecutive months.

12. Contents of Article 15 "Dependent personal services" provide that salary, wages and other remuneration of salary or wage nature shall be taxable in both States if the individual falls into one of the three following cases :

* His stay in the other State is for a period or periods amounting to or exceeding in aggregate 183 days in any twelve consecutive months;

* His stay in the other State is for less than 183 days but his employer or the representative of his employer pays him salary and wage as if he is a resident of the other State;

* His stay in the other State is for less than 183 days but his salary and wage are paid by a permanent establishment or a fixed place of business in the other State which belongs to his employer.

13. Contents of Article 16 "Directors' fee" provide that fees and other similar payments paid by a company, enterprise or any other similar organization of a State to an individual who is a resident of the other State, being remuneration for his capacity as a director or member of the board of directors of a company may be taxable in both States.

Example : An enterprise with 100% foreign owned capital or a joint venture in Vietnam in which a member of the board of directors is a foreigner. This foreigner who is not a resident of Vietnam (his stay in Vietnam is for less than 183 days or zero day in a year) but in accordance with the provisions of this Article, Vietnam has the right to tax the fees payable to him by the aforesaid enterprise with 100% foreign owned capital or joint venture.

14. Contents of the Article 17 "Artistes and athletes" provide as follows :

* Income derived from the performance of an artiste or athlete of a State in another State may be taxable in both States, including the case where the income derived in that other State is paid to the artiste or athlete directly or through other persons such as show company or organizer.

* Income derived by an artiste or athlete of a State from his show in the other State where the show expenses including remuneration for him are funded by the government of his State shall be taxable only in his State.

15. Contents of Article 18 "Pensions" provide that any amount of pensions (other than the pension provided in Article 19) shall be taxable only in the State of which the pensioner is a resident.

16. Contents of Article 19 "Government Services" provide that pensions payable to an individual for his service to the government of a State in another State shall be taxable only in one State in according with the following rules :

1. Pensions :

Pensions shall be taxable only in the other State if the individual is both a resident and a citizen of that other State.

2. Remuneration :

Remuneration shall be taxable only in the other State if the individual is both a resident and a citizen of that other State or if he does not hold citizenship of that other State but is carrying on other services (in addition to the main service rendered to the government of that State, for example working for a company or carrying on private business activities in that other State) for doing which he has become a resident of that other State.

3. Remuneration and pensions payable to an individual for services rendered in connection with a business carried on by the government of a State in another State shall not be subject to taxation only in one State in accordance with the above rules but subject to taxation in both States in according to the rules provided in Article 15, 16 and 18 of the Treaties.

17. Contents of Article 20 "Income of Students and Apprentices" provide that a student or an apprentice who is a resident of a State visiting another State for the purpose of his education and training shall be exempt from tax in that other State in respect of :

- Payments which the student or apprentice receives from a source outside that other State for purpose of his maintenance and education in that other state;

- Certain annual payments specified in the Treaties (which vary from Treaty to Treaty) derived by the student or apprentice from his service rendered in that other State provided that such services are directly connected to his education or training of such student or apprentice.

For example : A visiting Australian student is undertaking practical training in a legal consulting office in Vietnam. He is supported by his family in Australia with USD 3,000 and has earned form work in Vietnam an income of USD 2,000 in which USD 1,000 is paid by the legal consulting office for his consulting work in the office and USD 1,000 is paid by a factory. Then he will be exempt form tax in Vietnam in respect of USD 3,000 which he received from Australia and USD 1,000 which he has received from the legal consulting office. However, the USD 1,000 derived from his factory work shall be taxable in Vietnam.

18. Contents of Article 22 "Other Income" provide that other items of income which are not dealt with in the Treaty shall be taxable in the State of which the person is a resident.

19. Contents of Article 23 "Avoidance of double taxation" provide methods for avoidance of double taxation to be carried out in Vietnam and the other Contracting State. There are several methods for avoidance of double taxation in the Treaties between Vietnam and other State such as full deduction, deduction of common taxes, indirect deduction, full exemption, exemption from progressive taxes and deduction of deemed taxes. Application of these methods vary from State to State. In all Treaties for avoidance of double taxation which Vietnam has signed with other States, Vietnam applies the following two methods for avoidance of double taxation :

1. Full education :

The content of this method is that where a resident of Vietnam receives income from another State contracting to a Treaty with Vietnam under which such income is taxable in both States, Vietnam will allow a deduction of tax paid in that other State in respect of such income from the tax payable in Vietnam provided, however, that such deduction does not exceed the amount of tax payable in Vietnam.

Example 1 :

A Vietnamese company, Company A has a permanent establishment in Thailand. In 1993 the company has derived a taxable profit of 1,000 of which 300 is the taxable profit derived in Thailand. The rates of profits tax applicable to the company are 45% in Vietnam and 30% in Thailand. This method for avoidance of double taxation will be applied as follows :

- Computation of Company A's tax in Thailand is : 300 x 30% = 90

- Computation of Vietnam's tax chargeable in respect of income derived from overseas is : 300 x 45% = 135

- Computation of Vietnam's tax chargeable in respect of total income less tax already paid overseas is : (1000 x 45%) - 90 = 360

Example 2 :

Same as the above example except that the profits tax rate applicable to Company A in Vietnam is 25%. Avoidance of double taxation will be carried out as follows :

- Computation of Vietnam's tax payable in respect of income derived from overseas is : 300 x 25% = 75

Therefore, the amount of tax paid abroad (90) exceeds the amount of tax payable in Vietnam. Company A is therefore only allowed for a deduction from Vietnam's tax in an amount equal to the Vietnam's tax in respect of income derived overseas is 75.

- Computation of tax payable in Vietnam in respect of total income with deduction of tax already paid overseas is : (1000 x 25%) - 75 = 175

2. Deduction of deemed tax :

The content of this method is that where income derived by a resident of Vietnam from another State contracting to a Treaty with Vietnam, if such income is taxable in both States under the Treaty but is exempt from tax under the law of that other State then Vietnam will allow a deduction of the tax deemed to be paid in that other State from the amount of tax payable in Vietnam despite the fact that such income is actually exempt from tax in that other state. However, the tax which is deemed to be paid overseas and is being claimed for deduction must not exceed the tax liability in Vietnam.

Example 1 :

Similar situation of the example in point 1 above but under the investment law of Thailand the permanent establishment of Company A in Thailand is exempt from profits tax then avoidance of double taxation will be carried out as follows :

- Computation of tax deemed to be paid in Thailand is : 300 x 30% = 90

- Computation of Vietnam's tax liability in respect of income derived from overseas is : 300 x 35% = 135

- Computation of Vietnam' s tax liability in respect of the total income less the tax deemed to have been paid overseas is : (1000 x 45%) - 90 = 360

Example 2 :

Similar to example 2 of point 1 above, where Company A is exempt from Thailand's tax, deduction of the Company's deemed tax in Vietnam may be allowed only 75 rather than as 95, the amount of tax deemed to have been paid in Thailand.

20. Contents of Article 24 "Non - discrimination", Article 25 "Mutual agreement procedure", and Article 26 "Exchange of Information" provide the following :

1. Article 24 " Non-discrimination" provides that all nationals, permanent establishments or subsidiary companies of an enterprise of a State contracting to a Treaty with Vietnam shall not be subjected to any income taxation or any other determination of taxable income, tax rates, exemption and deduction which are more burdensome than the same circumstances to which Vietnamese nationals or enterprises are or may be subjected.

2. Article 25 "Mutual agreement procedure" provides that when a resident of Vietnam of the States contracting to a Treaties with Vietnam feels that the tax imposed on him is not in accordance with the provisions of the Treaty he may appeal directly to the Ministry of Trade or the General Department Taxes in the State of which he is a resident rather than presenting the appeal to the authorities specified in the tax laws of the States.

Example 1 :

A French individual who worked in Vietnam for a period less than 183 days in a year. In this case he is a resident of France. if he feels that he is not being taxed in Vietnam in respect of his income in accordance with the Treaty, he may appeal to the Ministry of Finance of France.

Example 2 :

Similar to the above example but the individual is a resident of Vietnam in Vietnam and has stayed in Vietnam for a period longer than 183 days in a year. If he feels that he is not being taxed in France in respect of his income in accordance with the Treaty, he may appeal to the Ministry of Finance or the General Department of Taxes of Vietnam.

To resolve such as appeal the Ministry of Finance or the General Department of Taxes of both States shall consult with each other for the purpose of reaching a mutual agreement and final decision.

3. Article 26 "Exchange of Information" provides that with a view to proper implementation of the provisions of the Treaty in both States and especially for avoidance of double taxation in a State or in both States, the two Ministries of Finance or General Department of Taxes shall carry out the exchange of information on a regular basis or upon a request arising from a particular case or both for the purposes of exchanging the following information :

- Tax laws or laws (including documents) relating to the taxes covered in the Treaty

- Relevant information relating to determination of taxable income of a resident of a State in the other State (for purposes of preventing tax evasion, avoiding unfair taxation or serving as reference in court disputes etc.).

21. Contents of the Articles numbered from 27 to 30 are provisions setting the dates of entry into force and termination of the Treaty. The general provisions are :

- A Treaty normally enters into force on the first day of the following calendar year of fiscal year in which both States have completed all procedures for approval and rectification of the Treaty.

- The Treaty will remain in force indefinitely but after the expiration of a period of five years following the date of its entry into force either contracting State may terminate the Treaty by serving a written notice of termination to the other State through a diplomatic channel.

B- GUIDANCE FOR IMPLEMENTATION OF TREATIES

I. IMPLEMENTING EXISTING TAXATION OF VIETNAM WITHIN THE SCOPE OF TREATIES

1. Profits tax :

a. Vietnamese enterprises and companies, joint venture with foreign parties, enterprises with 100% foreign owned capital, branches of foreign banks, joint venture banks, main contractors to oil and gas contracts and foreign enterprises operating in the export processing zones of Vietnam shall be subject to profits tax accordance with the existing provisions and be allowed to deduct amounts of overseas tax paid in respect of overseas income in accordance with the methods for avoidance of double taxation provided in this memorandum.

b. Foreign contractors, subcontractors, organizations and individual other than the entities mentioned in point (a) above which (or who) are carrying on business in Vietnam and are persons subjects to tax in accordance with the provisions in Circular 30 TC/TCT dated 18 July 1992, Circular 07 TC/TCT dated 30 March 1992 and Circular 7 TC/TCT dated 30 August 1993 shall be dealt with as follows :

* If it is determined that such foreign organization or individual is carrying on business in Vietnam through a permanent establishment (in respect of a company) or a fixed place of business (in respect of individual) then taxation shall be applied in accordance with the existing provision of the aforesaid Circular.

* If it is determined that such foreign organization or individual is not carrying on a business in Vietnam through a permanent establishment or a fixed place of business then :

 In respect of entities which carry on business in Vietnam through an agent (in accordance with the guidance in Circular 73 TC/TCT dated 30 August 1993), withholding tax shall be payable only at the place where the turnover tax is incurred and there shall be no withholding in respect of profits tax.

 Entities which carry on business in any form other than a form of foreign investment in Vietnam (in accordance with guidance of Circular 30 TC/TCT dated 18 July 1992 and Circular 07 TC/TCT dated 30 March 1992) shall be subject to withholding tax at the place where the turnover tax is incurred, at a proportion of 50% of the tax collected in accordance with provisions of the above mentioned Circulars.

2. Income tax for high income tax earners :

a. If a Vietnamese citizen has become a resident of a State (contracting to a Treaty with Vietnam) while working in that State then his regular income derived from overseas during the fiscal year in which he became a resident of that State shall not be taxable.

b. Where a resident of Vietnam (Vietnamese citizens, other individuals setting in Vietnam and foreigners working in Vietnam etc.) is in receipt of overseas income which has been subjected to overseas tax, he will be allowed to deduct the overseas tax from his Vietnam income tax in accordance with the methods for avoidance of double taxation provided in this memorandum.

3. Profits remittance tax and royalties tax :

Provisions for these two types of tax are set out in Article 10 and Article 12 of the Treaties. When carrying out assessment, it is necessary to identity the State in which the person, who is the actual recipient of the profit or the royalties is a resident and make reference to the rate limits set out in the Treaty. If the rates of remittance tax or royalties tax of Vietnam is equal to or lower than rate limits set out in the Treaty than taxation will be carried out in normal procedure. Otherwise, taxation will based on the rate limits stated in the Treaty.

The guidelines in set out at [B] point 1 and 2 of Part I shall apply to only foreign organizations which and individuals who are residents of a State which has signed a Treaty with Vietnam and the Treaty has entered into force in Vietnam.

II. ORGANIZATIONS RESPONSIBLE FOR IMPLEMENTING THE TAX TREATIES :

For the purpose of proper and comprehensive implementation of the provisions of the Treaties for avoidance of double taxation which Vietnam has entered into with other States, the General Department of Taxes hereby stipulates and provides guidance on organization of implementation to be carried out by the tax organizations as follows :

1. The General Department of Taxes :

In addition to the duty to participate in discussion and assist in the signing of Treaties for avoidance of double taxation with other States, the Department of International Cooperation of the General Department of Taxes shall take the lead in assisting the General Department of Taxes in carrying out the following tasks :

* Research and draft instructions and guidelines for implementation of each Treaty for Avoidance of Double Taxation which has entered into force for submission to the Ministry or the General Department of Taxes, whichever authority is concerned.

* Provide guidance to an supervision on the Department of Taxes in regard to the implementation of the Treaties.

* Conduct research and take part to discuss with foreign tax authority on disruptions, appeal appearing during on implementation agreements which must be solved by negotiate between Vietnam tax authority and foreign tax authority.

* Exchange of information to foreign tax authority in accordance with provisions of agreements.

* Provide explanation of the Treaties to Department of Taxes and taxpayers in respect of specific issues.

2. Provincial and city Department of Taxes

Every provincial/city Department of Taxes shall be required to designate a team form two to three officers from the Office of Foreign Investment (of the Departments which have the approval of the Ministry of Finance to establish a such office) or the tax collection office of the State owned enterprises (where the Department of Taxes has granted approval for setting up an office of foreign investment) to carry out the following duties :

* Conduct research on Treaties for avoidance of double taxation which Vietnam has signed with other States and research on documents concerning with guidance for implementation of these Treaties to provide regular assistance to Departments of Taxes as well as tax offices for purpose of comprehension of each Treaty's details and proper implementation.

* Act as a contact of the relevant Department of Taxes to provide explanation on the Treaties to all tax entities in the concerned province and city.

* Issue proof of payment of Vietnam's tax to foreign organizations and individuals (upon request) for purpose of their tax deduction abroad.

* Assume the responsibility for gathering information for purpose of exchange of information with foreign tax foreign tax authorities upon request of the General Department of Taxes.

The above information presents general guidance on Treaties for avoidance of double taxation and their application. All Departments of Taxes are requested to carry out immediate implementation. Any difficulties experienced in the course of implementation should be reported to the General Department of Taxes for immediate guidance. Issues which have not been addressed in this memorandum shall be dealt by the General Department of Taxes in a separate document.