Footwear is a major export product of Việt Nam to the US. The Government of Việt Nam has approved the agreement of double taxation avoidance between the two countries. — VNA/VNS Photo
Viet Nam has issued a resolution to approve an agreement with the US for avoiding double taxation and preventing fiscal evasion with respect to taxes on income.
The agreement is aimed at relieving double taxation of income that is earned in one jurisdiction by a resident of the other jurisdiction.
The agreement will be applicable on personal income tax and business income tax in case of Viet Nam, and in the case of the US, the Federal income taxes imposed by the Internal Revenue Code (but excluding social security and unemployment taxes) and the Federal taxes imposed on investment income of foreign private foundations.
The Government has asked the Ministry of Foreign Affairs to publish the agreement and complete necessary procedures as per the established regulations, and the Ministry of Finance to join with relevant organisations to implement the relief.
On July 7, 2015, Deputy Minister of Finance Vu Thi Mai and US Deputy Secretary of State for Economic Growth, Energy and the Environment Catherine A. Novelli signed the agreement.
According to Statistics of the Viet Nam General Department of Taxation, Viet Nam has signed double taxation relief agreements with 75 countries and territories worldwide as of August 2016, among which 60 have been put into force.
Viet Nam has received investments from more than 100 countries and territories.
The US is among the largest investors in Viet Nam, which poured more than US$11 billion worth of investments so far into the Southeast Asian country, as of December 2016, according to the Viet Nam Foreign Investment Agency.
The US is also the second largest importer of goods from Viet Nam, earning it a revenue of $38.5 billion in 2016, accounting for 22 per cent of Viet Nam’s total export turnover.
Việt Nam ran a trade surplus of more than $25 billion with the US last year.
The US mainly imported footwear, garment, agricultural products from Viet Nam. — VNS