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The Government of Canada and the Government of the Socialist
Republic of Vietnam, desiring to conclude an Agreement
for the avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income, have agreed
as follows:
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This Agreement shall apply to persons who are residents of
one or both of the Contracting States.
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1. This Agreement shall apply to taxes on income imposed on
behalf of each Contracting State, irrespective of the manner in
which they are levied.
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2. There shall be regarded as taxes on income all taxes
imposed on total income, or on elements of income, including
taxes on gains from the alienation of movable or immovable
property, as well as taxes on capital appreciation.
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3. The existing taxes to which the Agreement shall apply are:
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(a) in the case of Canada: the income taxes imposed by the
Government of Canada under the Income Tax Act, (hereinafter
referred to as ``Canadian tax'');
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(b) in the case of Vietnam:
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(i) the personal income tax;
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(iii) the profit remittance tax;
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(hereinafter referred to as ``Vietnamese tax'').
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4. The Agreement shall apply also to any identical or
substantially similar taxes which are imposed after the date of
signature of the Agreement in addition to, or in place of, the
existing taxes. The competent authorities of the Contracting
States shall notify each other of important changes which have
been made in their respective taxation laws.
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1. For the purposes of this Agreement, unless the context
otherwise requires:
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(a) the term ``Canada'' used in a geographical sense, means the
territory of Canada, including:
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(i) any area beyond the territorial seas of Canada which, in
accordance with international law and the laws of Canada,
is an area within which Canada may exercise rights with
respect to the seabed and subsoil and their natural
resources;
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(ii) the seas and airspace above every area referred to in
subparagraph (i) in respect of any activity carried on in
connection with the exploration for or the exploitation of
the natural resources referred to therein;
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(b) the term ``Vietnam'' means the Socialist Republic of
Vietnam and, when used in a geographical sense, it means the
territory of Vietnam, including:
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(i) any area beyond the territorial seas of Vietnam which, in
accordance with international law and the laws of Vietnam,
is an area within which Vietnam may exercise rights with
respect to the seabed and subsoil and their natural
resources;
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(ii) the seas and airspace above every area referred to in
subparagraph (i) in respect of any activity carried on in
connection with the exploration for or the exploitation of
the natural resources referred to therein;
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(c) the terms ``a Contracting State'' and ``the other Contracting
State'' mean, as the context requires, Canada or Vietnam;
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(d) the term ``person'' includes an individual, a company, a
partnership and any other body of persons;
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(e) the term ``company'' means any body corporate or any
entity which is treated as a body corporate for tax purposes;
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(f) the terms ``enterprise of a Contracting State'' and
``enterprise of the other Contracting State'' mean respectively
an enterprise carried on by a resident of a Contracting State
and an enterprise carried on by a resident of the other
Contracting State;
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(g) the term ``national'' means:
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(i) any individual possessing the nationality of a
Contracting State;
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(ii) any legal person, partnership and association deriving
its status as such from the laws in force in a Contracting
State;
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(h) the term ``competent authority'' means:
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(i) in the case of Canada, the Minister of National Revenue
or the Minister's authorized representative;
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(ii) in the case of Vietnam, the Minister of Finance or the
Minister's authorized representative;
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(i) the term ``international traffic'' means any voyage of a ship
or aircraft to transport passengers or property except where the
principal purpose of the voyage is to transport passengers or
property between places within a Contracting State.
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2. As regards the application of the Agreement by a
Contracting State at any time, any term not defined therein shall,
unless the context otherwise requires, have the meaning which it
has at that time under the law of that State concerning the taxes
to which the Agreement applies.
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1. For the purposes of this Agreement, the term ``resident of
a Contracting State'' means any person who, under the laws of
that State, is liable to tax therein by reason of his domicile,
residence, place of management, place of registration, place of
incorporation or any other criterion of a similar nature.
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2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then his status
shall be determined as follows:
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(a) he shall be deemed to be a resident of the State in which he
has a permanent home available to him; if he has a permanent
home available to him in both States, he shall be deemed to be
a resident of the State with which his personal and economic
relations are closer (centre of vital interests);
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(b) if the State in which he has his centre of vital interests
cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a
resident of the State in which he has an habitual abode;
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(c) if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident of the State of which
he is a national;
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(d) if he is a national of both States or of neither of them, the
competent authorities of the Contracting States shall settle the
question by mutual agreement.
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3. Where by reason of the provisions of paragraph 1 a
company is a resident of both Contracting States, then its status
shall be determined as follows:
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(a) it shall be deemed to be a resident of the State of which it
is a national;
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(b) if it is a national of neither of the States, it shall be deemed
to be a resident of the State in which its place of effective
management is situated.
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4. Where by reason of the provisions of paragraph 1 a person
other than an individual or a company is a resident of both
Contracting States, the competent authorities of the Contracting
States shall by mutual agreement endeavour to settle the question
and to determine the mode of application of the Agreement to
such person.
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1. For the purposes of this Agreement, the term ``permanent
establishment'' means a fixed place of business through which
the business of an enterprise is wholly or partly carried on.
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2. The term ``permanent establishment'' includes especially:
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(a) a place of management;
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(f) a mine, an oil or gas well, a quarry or any other place
relating to the exploration for or the exploitation of natural
resources.
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3. The term ``permanent establishment'' shall likewise
encompass:
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(a) a building site, construction, assembly or installation
project or supervisory activities in connection therewith, but
only where such site, project or activities continue for a period
of more than six months;
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(b) the furnishing of services, including consultancy services,
by an enterprise of a Contracting State through employees or
other personnel in the other Contracting State, but only where
activities of that nature continue (for the same or a connected
project) within the country for a period or periods aggregating
more than six months within any twelve month period.
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4. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' shall be deemed not to
include:
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(a) the use of facilities solely for the purpose of storage or
display of goods or merchandise belonging to the enterprise;
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(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage or
display;
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(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
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(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting
information, for the enterprise;
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(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity of
a preparatory or auxiliary character;
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(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (a) to
(e) provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory or
auxiliary character.
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5. Notwithstanding the provisions of paragraphs 1 and 2,
where a person - other than an agent of an independent status
to whom paragraph 7 applies - is acting in a Contracting State
on behalf of an enterprise of the other Contracting State, that
enterprise shall be deemed to have a permanent establishment in
the first-mentioned State in respect of any activities which that
person undertakes for the enterprise, if such person:
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(a) has, and habitually exercises, in that State an authority to
conclude contracts in the name of the enterprise, unless the
activities of such person are limited to those mentioned in
paragraph 4 which, if exercised through a fixed place of
business, would not make this fixed place of business a
permanent establishment under the provisions of that
paragraph; or
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(b) has no such authority, but habitually maintains in the
first-mentioned State a stock of goods or merchandise from
which he regularly delivers goods or merchandise on behalf
of the enterprise.
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6. Notwithstanding the preceding provisions of this Article,
an insurance enterprise of a Contracting State shall, except in
regard to re-insurance, be deemed to have a permanent
establishment in the other Contracting State if it collects
premiums in the territory of that other State or insures risks
situated therein through a person other than an agent of an
independent status to whom paragraph 7 applies.
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7. An enterprise of a Contracting State shall not be deemed to
have a permanent establishment in the other Contracting State
merely because it carries on business in that other State through
a broker, general commission agent or any other agent of an
independent status, or merely because it maintains in that other
State a stock of goods or merchandise with an agent of an
independent status from which deliveries are made by that agent,
provided that such persons are acting in the ordinary course of
their business. However, when the activities of such an agent are
devoted wholly or almost wholly on behalf of that enterprise, he
will not be considered an agent of an independent status within
the meaning of this paragraph.
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8. The fact that a company which is a resident of a Contracting
State controls or is controlled by a company which is a resident
of the other Contracting State, or which carries on business in that
other State (whether through a permanent establishment or
otherwise), shall not of itself constitute either company a
permanent establishment of the other.
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1. Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be taxed in
that other State.
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2. For the purposes of this Agreement, the term ``immovable
property'' shall have the meaning which it has under the taxation
law of the Contracting State in which the property in question is
situated. The term shall in any case include property accessory to
immovable property, livestock and equipment used in
agriculture and forestry, rights to which the provisions of law
respecting landed property apply, usufruct of immovable
property and rights to variable or fixed payments as
consideration for the working of, or the right to work, mineral
deposits, sources and other natural resources; ships and aircraft
shall not be regarded as immovable property.
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3. The provisions of paragraph 1 shall apply to income derived
from the direct use, letting, or use in any other form of immovable
property and to income from the alienation of such property.
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4. The provisions of paragraphs 1 and 3 shall also apply to the
income from immovable property of an enterprise and to income
from immovable property used for the performance of
independent personal services.
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1. The profits of an enterprise of a Contracting State shall be
taxable only in that State unless the enterprise carries on business
in the other Contracting State through a permanent establishment
situated therein. If the enterprise carries on or has carried on
business as aforesaid, the profits of the enterprise may be taxed
in the other State but only so much of them as is attributable to
that permanent establishment.
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2. Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business in the other
Contracting State through a permanent establishment situated
therein, there shall in each Contracting State be attributed to that
permanent establishment the profits which it might be expected
to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions
and dealing wholly independently with the enterprise of which
it is a permanent establishment.
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3. In determining the profits of a permanent establishment,
there shall be allowed as deduction expenses which are incurred
for the purposes of the business of the permanent establishment
including executive and general administrative expenses so
incurred, whether in the State in which the permanent
establishment is situated or elsewhere. However, no such
deduction shall be allowed in respect of amounts, if any, paid
(otherwise than as a reimbursement of actual expenses) by the
permanent establishment to the head office of the enterprise or
any of its other offices, by way of royalties, fees or other similar
payments in return for the use of patents or other rights, or by way
of commission, for specific services performed or for
management, or, except in the case of a banking enterprise, by
way of interest on moneys lent to the permanent establishment.
Likewise, no account shall be taken in the determination of the
profits of a permanent establishment, for amounts charged
(otherwise than towards reimbursement of actual expenses), by
the permanent establishment to the head office of the enterprise
or any of its other offices, by way of royalties, fees or other similar
payments in return for the use of patents or other rights, or by way
of commission for specific services performed or for
management, or, except in the case of a banking enterprise, by
way of interest on moneys lent to the head office of the enterprise
or any of its other offices.
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4. Nothing in this Article shall affect the application of any law
of a Contracting State relating to the determination of the tax
liability of a person in cases where the information available to
the competent authority of that State is inadequate to determine
the profits to be attributed to a permanent establishment,
provided that law shall be applied, so far as the information
available to the competent authority permits, consistently with
the principles contained in this Article.
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5. Insofar as it has been customary in a Contracting State to
determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total profits
of the enterprise to its various parts, nothing in paragraph 2 shall
preclude that Contracting State from determining the profits to be
taxed by such apportionment as may be customary; the method
of apportionment adopted shall, however, be such that the result
shall be in accordance with the principles contained in this
Article.
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6. No profits shall be attributed to a permanent establishment
by reason of the mere purchase by that permanent establishment
of goods or merchandise for the enterprise.
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7. For the purposes of the preceding paragraphs, the profits to
be attributed to the permanent establishment shall be determined
by the same method year by year unless there is good and
sufficient reason to the contrary.
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8. Where profits include items of income which are dealt with
separately in other Articles of this Agreement, then the
provisions of those Articles shall not be affected by the
provisions of this Article.
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1. Profits derived by an enterprise of a Contracting State from
the operation of ships or aircraft in international traffic shall be
taxable only in that State.
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2. Notwithstanding the provisions of paragraph 1 and of
Article 7, profits derived by an enterprise of a Contracting State
from a voyage of a ship or aircraft where the principal purpose of
the voyage is to transport passengers or property between places
in the other Contracting State may be taxed in that other State.
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3. The provisions of paragraphs 1 and 2 shall also apply to
profits from the participation in a pool, a joint business or an
international operating agency.
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4. For the purposes of this Article, profits from the operation
of ships or aircraft in international traffic include:
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(a) income from the rental on a bareboat basis of ships or
aircraft; and
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(b) profits from the use, maintenance or rental of containers
(including trailers and related equipment for the transport of
containers) used for the transport of goods or merchandise,
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where such rental, use or maintenance, as the case may be, is
incidental to the operation of ships or aircraft in international
traffic.
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1. Where:
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(a) an enterprise of a Contracting State participates directly or
indirectly in the management, control or capital of an
enterprise of the other Contracting State, or
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(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a
Contracting State and an enterprise of the other Contracting
State,
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and in either case conditions are made or imposed between the
two enterprises in their commercial or financial relations which
differ from those which would be made between independent
enterprises, then any income which would, but for those
conditions, have accrued to one of the enterprises, but, by reason
of those conditions, have not so accrued, may be included in the
income of that enterprise and taxed accordingly.
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2. Where a Contracting State includes in the income of an
enterprise of that State - and taxes accordingly - income on
which an enterprise of the other Contracting State has been
charged to tax in that other State and the income so included is
income which would have accrued to the enterprise of the
first-mentioned State if the conditions made between the two
enterprises had been those which would have been made
between independent enterprises, then that other State shall make
an appropriate adjustment to the amount of tax charged therein
on that income. In determining such adjustment, due regard shall
be had to the other provisions of this Agreement and the
competent authorities of the Contracting States shall if necessary
consult each other.
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3. A Contracting State shall not change the income of an
enterprise in the circumstances referred to in paragraph 1 after the
expiry of the time limits provided in its national laws and, in any
case, after five years from the end of the year in which the income
which would be subject to such change would, but for the
conditions referred to in paragraph 1, have accrued to that
enterprise.
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4. The provisions of paragraphs 2 and 3 shall not apply in the
case of fraud, wilful default or neglect.
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1. Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State may
be taxed in that other State.
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2. However, such dividends may also be taxed in the
Contracting State of which the company paying the dividends is
a resident and according to the laws of that State, but if the
recipient is the beneficial owner of the dividends the tax so
charged shall not exceed:
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(a) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company that controls at least 70 per cent
of the voting power in the company paying the dividends;
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(b) 10 per cent of the gross amount of the dividends if the
beneficial owner is a company that controls at least 25 per cent
but less than 70 per cent of the voting power in the company
paying the dividends; and
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(c) 15 per cent of the gross amount of the dividends in all other
cases.
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The provisions of this paragraph shall not affect the taxation of
the company on the profits out of which the dividends are paid.
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3. The term ``dividends'' as used in this Article means income
from shares, ``jouissance'' shares or ``jouissance'' rights, mining
shares, founders' shares or other rights, not being debt-claims,
participating in profits, as well as income which is subjected to
the same taxation treatment as income from shares by the laws of
the State of which the company making the distribution is a
resident.
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4. The provisions of paragraph 2 shall not apply if the
beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other Contracting
State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs
in that other State independent personal services from a fixed
base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article
7 or Article 14, as the case may be, shall apply.
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5. Where a company which is a resident of a Contracting State
derives profits or income from the other Contracting State, that
other State may not impose any tax on the dividends paid by the
company, except insofar as such dividends are paid to a resident
of that other State or insofar as the holding in respect of which the
dividends are paid is effectively connected with a permanent
establishment or a fixed base situated in that other State, nor
subject the company's undistributed profits to a tax on the
company's undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income
arising in such other State.
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1. Interest arising in a Contracting State and paid to a resident
of the other Contracting State may be taxed in that other State.
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2. However, such interest may also be taxed in the Contracting
State in which it arises and according to the laws of that State, but
if the recipient is the beneficial owner of the interest the tax so
charged shall not exceed 10 per cent of the gross amount of the
interest.
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3. Notwithstanding the provisions of paragraph 2:
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(a) interest arising in a Contracting State and paid in respect
of indebtedness of the government of that State or of a political
subdivision or local authority thereof shall, provided that the
interest is beneficially owned by a resident of the other
Contracting State, be taxable only in that other State;
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(b) interest arising in a Contracting State and paid to a resident
of the other Contracting State shall be taxable only in that
other State if it is paid in respect of a loan made, guaranteed or
insured, or a credit extended, guaranteed or insured by any
institution, the capital of which is wholly owned by the
Government of that other State, which is specified and agreed
in letters exchanged between the competent authorities of the
Contracting States.
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4. The term ``interest'' as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage, and in particular, income from government securities
and income from bonds or debentures, including premiums and
prizes attaching to such securities, bonds or debentures, as well
as income which is subjected to the same taxation treatment as
income from money lent by the laws of the State in which the
income arises. However, the term ``interest'' does not include
income dealt with in Article 10.
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5. The provisions of paragraph 2 shall not apply if the
beneficial owner of the interest, being a resident of a Contracting
State, carries on business in the other Contracting State in which
the interest arises through a permanent establishment situated
therein, or performs in that other State independent personal
services from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively connected with
such permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, as the case may be, shall
apply.
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6. Interest shall be deemed to arise in a Contracting State when
the payer is a resident of that State. Where, however, the person
paying the interest, whether he is a resident of a Contracting State
or not, has in a Contracting State a permanent establishment or
a fixed base in connection with which the indebtedness on which
the interest is paid was incurred, and such interest is borne by
such permanent establishment or fixed base, then such interest
shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
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7. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and some
other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would
have been agreed upon by the payer and the beneficial owner in
the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case, the
excess part of the payments shall remain taxable according to the
laws of each Contracting State, due regard being had to the other
provisions of this Agreement.
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1. Royalties and fees for technical services arising in a
Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
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2. However, such royalties and fees for technical services may
also be taxed in the Contracting State in which they arise and
according to the laws of that State, but if the recipient is the
beneficial owner of the royalties or of the fees for technical
services the tax so charged shall not exceed:
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(a) in the case of royalties 10 per cent of the gross amount of
such royalties,
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(b) in the case of fees for technical services 7.5 per cent of the
gross amount of such fees.
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3. The term ``royalties'' as used in this Article means payments
of any kind received as a consideration for the use of, or the right
to use, any copyright of literary, artistic or scientific work
(including payments of any kind in respect of motion picture
films and works on film, tape or other means of reproduction for
radio or television broadcasting), any patent, trade mark, design
or model, plan, secret formula or process or other intangible
property, or for the use of, or the right to use, industrial,
commercial or scientific equipment, or for information
concerning industrial, commercial or scientific experience.
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4. The term ``fees for technical services'' as used in this Article
means payments of any kind to any person, other than payments
to an employee of the person making the payments, in
consideration for any services of a managerial, technical or
consultancy nature rendered in the Contracting State of which
the payer is a resident.
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5. The provisions of paragraph 2 shall not apply if the
beneficial owner of the royalties or fees for technical services,
being a resident of a Contracting State, carries on business in the
other Contracting State in which the royalties or fees for technical
services arise through a permanent establishment situated
therein, or performs in that other State independent personal
services from a fixed base situated therein, and the right, property
or contract in respect of which the royalties or fees for technical
services are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article
7 or Article 14, as the case may be, shall apply.
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6. Royalties or fees for technical services shall be deemed to
arise in a Contracting State when the payer is a resident of that
State. Where, however, the person paying the royalties or fees for
technical services, whether he is a resident of a Contracting State
or not, has in a Contracting State a permanent establishment or
a fixed base in connection with which the obligation to make the
payment was incurred, and such royalties or fees for technical
services are borne by such permanent establishment or fixed
base, then such royalties or fees for technical services shall be
deemed to arise in the State in which the permanent
establishment or fixed base is situated.
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7. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and some
other person, the amount of the royalties or fees for technical
services paid exceeds, for whatever reason, the amount which
would have been agreed upon by the payer and the beneficial
owner in the absence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In such
case, the excess part of the payments shall remain taxable
according to the laws of each Contracting State, due regard being
had to the other provisions of this Agreement.
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1. Gains derived by a resident of a Contracting State from the
alienation of immovable property situated in the other
Contracting State may be taxed in that other State.
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2. Gains from the alienation of movable property forming part
of the business property of a permanent establishment which an
enterprise of a Contracting State has in the other Contracting
State or of movable property pertaining to a fixed base available
to a resident of a Contracting State in the other Contracting State
for the purpose of performing independent personal services,
including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise) or of such a
fixed base may be taxed in that other State.
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3. Gains derived by an enterprise of a Contracting State from
the alienation of ships or aircraft operated in international traffic
or movable property pertaining to the operation of such ships or
aircraft, shall be taxable only in that State.
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4. Gains from the alienation of shares of a company that is a
resident of a Contracting State may be taxed in that State.
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5. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2, 3 and 4 may be taxed in both
Contracting States in accordance with the respective laws of
those States.
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1. Income derived by an individual who is a resident of a
Contracting State in respect of professional services or other
activities of an independent character shall be taxable only in that
State unless he has a fixed base regularly available to him in the
other Contracting State for the purpose of performing his
activities. If he has or had such a fixed base, the income may be
taxed in the other State but only so much of it as is attributable to
that fixed base.
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2. The term ``professional services'' includes especially
independent scientific, literary, artistic, educational or teaching
activities as well as the independent activities of physicians,
lawyers, engineers, architects, dentists and accountants.
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1. Subject to the provisions of Articles 16, 18 and 19, salaries,
wages and other remuneration derived by a resident of a
Contracting State in respect of an employment shall be taxable
only in that State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that other
State.
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2. Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting
State shall be taxable only in the first-mentioned State if:
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(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the fiscal year
concerned, and
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(b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the other State, and
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(c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the
other State.
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3. Notwithstanding the preceding provisions of this Article,
remuneration derived in respect of an employment exercised
aboard a ship or aircraft operated in international traffic by an
enterprise of a Contracting State, shall be taxable only in that
State unless the remuneration is derived by a resident of the other
Contracting State.
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Directors' fees and other similar payments derived by a
resident of a Contracting State in his capacity as a member of the
board of directors of a company which is a resident of the other
Contracting State, may be taxed in that other State.
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1. Notwithstanding the provisions of Articles 14 and 15,
income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or television
artiste, or a musician, or as a sportsman, from his personal
activities as such exercised in the other Contracting State, may be
taxed in that other State.
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2. Where income in respect of personal activities exercised by
an entertainer or a sportsman in his capacity as such accrues not
to the entertainer or sportsman himself but to another person, that
income may, notwithstanding the provisions of Articles 7, 14 and
15, be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.
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3. The provisions of paragraph 2 shall not apply if it is
established that neither the entertainer or the sportsman nor
persons related thereto, participate directly or indirectly in the
profits of the person referred to in that paragraph.
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4. The provisions of paragraphs 1 and 2 shall not apply to
income derived from activities performed in a Contracting State
by a resident of the other Contracting State in the context of a visit
in the first-mentioned State of a non-profit organisation of the
other State, provided the visit is substantially supported by
public funds.
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1. Pensions and annuities arising in a Contracting State and
paid to a resident of the other Contracting State may be taxed in
that other State.
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2. Pensions arising in a Contracting State and paid to a resident
of the other Contracting State may also be taxed in the State in
which they arise and according to the law of that State. However,
in the case of periodic pension payments, other than payments
under the social security legislation in a Contracting State, the tax
so charged shall not exceed 15 per cent of the gross amount of the
payment.
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3. Annuities arising in a Contracting State and paid to a
resident of the other Contracting State may also be taxed in the
State in which they arise and according to the law of that State.
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4. Notwithstanding anything in this Agreement, alimony and
other similar payments arising in a Contracting State and paid to
a resident of the other Contracting State who is subject to tax
therein in respect thereof, shall be taxable only in that other State.
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1. (a) Salaries, wages and similar remuneration, other than a
pension, paid by a Contracting State or a political subdivision or
a local authority thereof to an individual in respect of services
rendered to that State or subdivision or authority in any other
State shall be taxable only in the first-mentioned State.
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(b) However, such salaries, wages or similar remuneration
shall be taxable only in the other Contracting State if the
services are rendered in that State and the individual is a
resident of that State who:
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(i) is a national of that State; or
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(ii) did not become a resident of that State solely for the
purpose of rendering the services.
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2. The provisions of paragraph 1 shall not apply to
remuneration in respect of services rendered in connection with
a business carried on by a Contracting State or a political
subdivision or a local authority thereof.
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Payments which a student, apprentice or business trainee who
is, or was immediately before visiting a Contracting State, a
resident of the other Contracting State and who is present in the
first-mentioned State solely for the purpose of his education or
training receives for the purpose of his maintenance, education
or training shall not be taxed in that State, provided that such
payments arise from sources outside that State.
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1. Subject to the provisions of paragraph 2, items of income
of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing Articles of this Agreement shall be taxable
only in that State.
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2. However, if such income is derived by a resident of a
Contracting State from sources in the other Contracting State,
such income may also be taxed in the State in which it arises, and
according to the law of that State. Where such income is income
from an estate or a trust, other than a trust to which contributions
were deductible, the tax so charged shall, provided that the
income is taxable in the Contracting State in which the beneficial
owner is a resident, not exceed 15 per cent of the gross amount
of the income.
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1. In the case of Canada, double taxation shall be avoided as
follows:
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(a) subject to the existing provisions of the law of Canada
regarding the deduction from tax payable in Canada of tax
paid in a territory outside Canada and to any subsequent
modification of those provisions - which shall not affect the
general principle hereof - and unless a greater deduction or
relief is provided under the laws of Canada, tax payable in
Vietnam on profits, income or gains arising in Vietnam shall
be deducted from any Canadian tax payable in respect of such
profits, income or gains;
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(b) subject to the existing provisions of the law of Canada
regarding the taxation of income from a foreign affiliate and
to any subsequent modification of those provisions - which
shall not affect the general principle hereof - for the purpose
of computing Canadian tax, a company which is a resident of
Canada shall be allowed to deduct in computing its taxable
income any dividend received by it out of the exempt surplus
of a foreign affiliate which is a resident of Vietnam; and
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(c) where, in accordance with any provision of the Agreement,
income derived by a resident of Canada is exempt from tax in
Canada, Canada may nevertheless, in calculating the amount
of tax on other income, take into account the exempted
income.
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The term ``exempt surplus'' shall have the meaning that it has
under the Income Tax Act of Canada.
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2. For the purpose of subparagraph (a) of paragraph 1, tax
payable in Vietnam by a company engaged primarily in the
manufacturing or natural resources sector which is a resident of
Canada in respect of:
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(a) interest, other than interest which is exempted in Vietnam
in accordance with paragraph 3 of Article 11, or
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(b) payments of any kind received as a consideration for the
use of, or the right to use, any patent, design or model, plan,
secret formula or process, or for information concerning
industrial or scientific experience,
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paid by a company engaged primarily in the same sector which
is a resident of Vietnam shall be deemed to have been paid at the
rate of 10 per cent of the gross amount of the payment. The
provisions of this paragraph shall apply for the first five years for
which the Agreement is effective, but the competent authorities
of the Contracting States may consult with each other to
determine whether this period shall be extended.
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3. For the purposes of subparagraph (a) of paragraph 1, tax
payable in Vietnam by a company which is a resident of Canada
in respect of profits attributable to manufacturing activities or to
the exploration or exploitation of natural resources carried on by
it in Vietnam shall be deemed to include any amount which
would have been payable thereon as Vietnamese tax for any year
but for an exemption from, or reduction of, tax granted for that
year or any part thereof under specific provisions of Vietnamese
legislation and provided always that the competent authority of
Vietnam has certified that any such exemption from or reduction
of Vietnamese tax given under these provisions has been granted
in order to promote economic development in Vietnam. Relief
from Canadian tax by virtue of this paragraph shall be given for
a period of ten years only, beginning with the date on which the
Agreement entered into force.
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4. In the case of Vietnam, double taxation shall be avoided as
follows: where a resident of Vietnam derives income which, in
accordance with the provisions of this Agreement, may be taxed
in Canada, Vietnam shall allow as a deduction from the tax on the
income of that resident an amount equal to the income tax paid
in Canada. Such deduction shall not, however, exceed that part
of the income tax, as computed before the deduction is given,
which is attributable to the income which may be taxed in
Canada.
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5. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State that may be taxed in the other
Contracting State in accordance with this Agreement shall be
deemed to arise from sources in that other State.
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1. Nationals of a Contracting State shall not be subjected in the
other Contracting State to any taxation or any requirement
connected therewith which is other or more burdensome than the
taxation and connected requirements to which nationals of that
other State in the same circumstances are or may be subjected.
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2. The taxation on a permanent establishment which an
enterprise of a Contracting State has in the other Contracting
State shall not be less favourably levied in that other State than
the taxation levied on enterprises of that other State carrying on
the same activities.
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3. Nothing in this Article shall be construed as obliging a
Contracting State to grant to residents of the other Contracting
State any personal allowances, reliefs and reductions for taxation
purposes on account of civil status or family responsibilities
which it grants to its own residents.
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4. Enterprises of a Contracting State, the capital of which is
wholly or partly owned or controlled, directly or indirectly, by
one or more residents of the other Contracting State, shall not be
subjected in the first-mentioned State to any taxation or any
requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to
which other similar enterprises of the first-mentioned State, the
capital of which is wholly or partly owned or controlled, directly
or indirectly, by one or more residents of a third State, are or may
be subjected.
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5. In this Article, the term ``taxation'' means taxes which are
the subject of this Agreement.
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1. Where a person considers that the actions of one or both of
the Contracting States result or will result for him in taxation not
in accordance with the provisions of this Agreement, he may,
irrespective of the remedies provided by the domestic law of
those States, address to the competent authority of the
Contracting State of which he is a resident an application in
writing stating the grounds for claiming the revision of such
taxation. To be admissible, the said application must be
submitted within two years from the first notification of the
action which gives rise to taxation not in accordance with the
Agreement.
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2. The competent authority referred to in paragraph 1 shall
endeavour, if the objection appears to it to be justified and if it is
not itself able to arrive at a satisfactory solution, to resolve the
case by mutual agreement with the competent authority of the
other Contracting State, with a view to the avoidance of taxation
not in accordance with the Agreement.
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3. A Contracting State shall not, after the expiry of the time
limits provided in its national laws and, in any case, after five
years from the end of the taxable period in which the income
concerned has accrued, increase the tax base of a resident of either
of the Contracting States by including therein items of income
which have also been charged to tax in the other Contracting
State. This paragraph shall not apply in the case of fraud, wilful
default or neglect.
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4. The competent authorities of the Contracting States shall
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the
Agreement.
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5. The competent authorities of the Contracting States may
consult together for the elimination of double taxation in cases
not provided for in the Agreement and may communicate with
each other directly for the purpose of applying the Agreement.
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1. The competent authorities of the Contracting States shall
exchange such information as is necessary for carrying out the
provisions of this Agreement or of the domestic laws of the
Contracting States concerning taxes covered by the Agreement
insofar as the taxation thereunder is not contrary to the
Agreement. The exchange of information is not restricted by
Article 1. Any information received by a Contracting State shall
be treated as secret in the same manner as information obtained
under the domestic laws of that State and shall be disclosed only
to persons or authorities (including courts and administrative
bodies) involved in the assessment or collection of, the
enforcement in respect of, or the determination of appeals in
relation to, taxes. Such persons or authorities shall use the
information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions.
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2. Nothing in paragraph 1 shall be construed so as to impose
on a Contracting State the obligation:
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(a) to carry out administrative measures at variance with the
laws or the administrative practice of that or of the other
Contracting State;
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(b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or of
the other Contracting State;
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(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or trade
process, or information, the disclosure of which would be
contrary to public policy (ordre public).
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3. If information is requested by a Contracting State in
accordance with this Article, the other Contracting State shall
endeavour to obtain the information to which the request relates
in the same way as if its own taxation were involved
notwithstanding the fact that the other State does not, at that time,
need such information. If specifically requested by the
competent authority of a Contracting State, the competent
authority of the other Contracting State shall endeavour to
provide information under this Article in the form requested,
such as depositions of witnesses and copies of unedited original
documents (including books, papers, statements, records,
accounts or writings), to the same extent such depositions and
documents can be obtained under the laws and administrative
practices of that other State with respect to its own taxes.
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1. Nothing in this Agreement shall affect the fiscal privileges
of diplomatic agents or consular officers under the general rules
of international law or under the provisions of special
agreements.
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2. Notwithstanding Article 4, an individual who is a member
of a diplomatic mission, consular post or permanent mission of
a Contracting State which is situated in the other Contracting
State or in a third State shall be deemed for the purposes of the
Agreement to be a resident of the sending State if he is liable in
the sending State to the same obligations in relation to tax on his
total income as are residents of that sending State.
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3. The Agreement shall not apply to international
organizations, to organs or officials thereof and to persons who
are members of a diplomatic mission, consular post or permanent
mission of a third State or group of States, being present in a
Contracting State and who are not liable in either Contracting
State to the same obligations in relation to tax on their total
income as are residents thereof.
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1. Each of the Contracting States shall notify the other
Contracting State of the completion of the procedures required
by the laws of the respective Contracting State for the bringing
into force of this Agreement. This Agreement shall enter into
force on the date of the later of these notifications.
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2. The provisions of the Agreement shall have effect:
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(a) in respect of tax withheld at the source on amounts paid or
credited to non-residents on or after the first day of January in
the calendar year following that in which the Agreement
enters into force; and
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(b) in respect of other taxes for taxation years beginning on or
after the first day of January in the calendar year following that
in which the Agreement enters into force.
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This Agreement shall remain in force until terminated by a
Contracting State. Either Contracting State may terminate the
Agreement, through the diplomatic channel, by giving to the
other Contracting State a written notice of termination on or
before June 30 in any calendar year from the fifth year after the
year in which the Agreement entered into force. In such event, the
Agreement shall cease to have effect:
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(a) in respect of tax withheld at the source on amounts paid or
credited to non-residents on or after the first day of January of
the calendar year following that in which the notice of
termination is given; and
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(b) in respect of other taxes for taxation years beginning on or
after the first day of January of the calendar year following that
in which the notice of termination is given.
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IN WITNESS WHEREOF the undersigned, being duly
authorized thereto by their respective Governments, have signed
this Agreement.
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DONE in duplicate at Hanoi, this 14th day of November of the
year one thousand nine hundred and ninety-seven, in the
English, French and Vietnamese languages, each version being
equally authentic.
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FOR THE GOVERNMENT FOR THE GOVERNMENT OF
CANADA: OF THE SOCIALIST REPUBLIC OF VIETNAM:
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Diane Marleau Nguyen Sinh Hung
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At the moment of signing the Agreement between the
Government of Canada and the Government of the Socialist
Republic of Vietnam for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income, the
undersigned have agreed that the following provisions shall form
an integral part of the Agreement.
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1. It is understood that the term ``person'' also includes an
estate and a trust.
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2. It is understood that the term ``resident of a Contracting
State'' also includes the Government of that State or a political
subdivision or local authority thereof or any agency or
instrumentality of any such government, subdivision or
authority.
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3. Nothing in the Agreement shall be construed as preventing:
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(a) Canada from imposing on the earnings of a company
attributable to a permanent establishment in Canada, a tax in
addition to the tax which would be chargeable on the earnings
of a company which is a national of Canada, provided that any
additional tax so imposed shall not exceed 5 per cent of the
amount of such earnings which have not been subjected to
such additional tax in previous taxation years. This provision
shall also apply with respect to earnings derived from the
alienation of immovable property in Canada by a company
carrying on a trade in immovable property, whether or not it
has a permanent establishment in Canada, but only insofar as
these earnings may be taxed in Canada under the provisions
of Article 6 or paragraph 1 of Article 13;
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(b) Vietnam from imposing the Vietnamese profit remittance
tax, provided that the tax so imposed shall not exceed 10 per
cent of the gross amount of the profits remitted.
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4. The provisions of the Agreement shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction accorded:
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(a) by the laws of a Contracting State in the determination of
the tax imposed by that State; or
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(b) by any other agreement entered into by a Contracting
State.
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5. Nothing in the Agreement shall be construed as preventing
a Contracting State from imposing a tax on amounts included in
the income of a resident of that State with respect to a partnership,
trust, or controlled foreign affiliate, in which he has an interest.
For the purposes of this paragraph, the term ``controlled foreign
affiliate'', at any time, of a person that is a resident of a
Contracting State, means a foreign affiliate of that resident that
was, at that time controlled by
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(b) that resident and not more than four persons resident in that
Contracting State;
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(c) not more than four persons resident in that Contracting
State, other than that resident;
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(d) a person or persons with whom that resident does not deal
at arm's length; or
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(e) that resident and a person or persons with whom the
resident does not deal at arm's length.
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6. The Agreement shall not apply to any company nor to
income derived from such company by a shareholder thereof,
trust or partnership that is a resident of a Contracting State and is
beneficially owned or controlled directly or indirectly by one or
more persons who are not residents of that State, if the amount of
the tax imposed on the income or capital of the company, trust or
partnership by that State is substantially lower than the amount
that would be imposed by that State if all of the shares of the
capital stock of the company or all of the interests in the trust or
partnership, as the case may be, were beneficially owned by one
or more individuals who were residents of that State.
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7. It is understood that the provisions of Article 23 of the
Agreement shall not apply to the Vietnamese taxation of natural
resources and agricultural production activities.
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8. Irrespective of the participation of the Contracting States in
international agreements, the Contracting States in their tax
relations will be governed by the provisions of this Agreement.
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9. If, after the date of signature of this Agreement, Vietnam
concludes a bilateral Agreement for the avoidance of double
taxation with any other member State of the Organisation for
Economic Co-operation and Development and, under the
provisions of that Agreement, Vietnam may tax royalties arising
in Vietnam and paid to a resident of that State but the tax charged
is not to exceed a percentage of the gross amount of the royalties
which is lesser than the percentage specified in subparagraph (a)
of paragraph 2 of Article 12, then the lower percentage shall
apply from the date of entry into force of that Agreement;
however, such lower percentage shall apply only to royalties to
which it applies in that Agreement and only where the payments
are for the use of, or the right to use, computer software or, where
the payer and the beneficial owner of the royalties are not related
persons, for the use of, or the right to use, any patent or for
information concerning industrial, commercial or scientific
experience (but not including any such information provided in
connection with a rental or franchise agreement).
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IN WITNESS WHEREOF the undersigned, being duly
authorized thereto by their respective Governments, have signed
this Protocol.
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DONE in duplicate at Hanoi, this 14th day of November of the
year one thousand nine hundred and ninety-seven, in the
English, French and Vietnamese languages, each version being
equally authentic.
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FOR THE GOVERNMENT FOR THE
GOVERNMENT OF CANADA: O
F THE SOCIALIST REPUBLIC OF VIETNAM:
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Diane Marleau Nguyen Sinh Hung
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