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Singapore-Vietnam Double Tax Treaty

Singapore-Vietnam Double Tax Treaty

The Singapore-Vietnam double tax treaty was initially signed in 1994, after which, in 2013, the two jurisdictions concluded another protocol which brought certain amendments to it. This second protocol outlined the rules for the ctaxation of corporate income double gained by businesses in Singapore and Vietnam. Our lawyers in Singapore can provide detailed information on the initial Singapore-Vietnam double tax agreement.

The second protocol of the Singapore-Vietnam double tax treaty

The second protocol of the Singapore-Vietnam double tax treaty brought numerous changes to the initial one, among which we mention:

Capital gains tax: according to Article 13(4) of the Singapore-Vietnam double tax treaty, income gained by a Singapore resident from the share disposal (shares which are not listed on the Singapore or Vietnam stock exchange) which derive in excess of 50% from their value from immovable property located in Vietnam could be taxed in Vietnam;

Withholding tax deduction for royalties: in conformity with the Singapore-Vietnam double tax treaty, the withholding tax rate on royalties for the utilization of (or the right to utilize), any patent, model or design, process or plan secret formula, commercial, industrial equipment or information on certain type of experience is commonly set at a deducted rate of 5%. For other types of royalties, the second protocol reduced the withholding tax rate from 15% to 10%. Our Singapore lawyers can offer more details on what these royalties consist of.

Exchange of data according to the second Singapore-Vietnam protocol

According to the second protocol of the Singapore-Vietnam double tax treaty, the exchange of data was also updated in line with the international agreed standard. Article 27 of the above-mentioned double tax agreement allows the exchange of data when it is “foreseeably relevant” for the management or application of local legislation regarding all types of taxes imposed by the two jurisdictions. 

For further details concerning the agreement between Singapore and Vietnam, we invite you to get in touch with our law firm in Singapore.