Double Taxation Avoidance Agreement between Viet Nam and Hong Kong

The Viet Nam Chamber of Commerce and Industry (VCCI) and the Hong Kong Economic and Trade Office in Singapore have recently co-organised a seminar on double taxation avoidance agreement between Viet Nam and Hong Kong.

 

The seminar was aimed at introducing regulations on the agreement in order to help Vietnamese and Hongkongese enterprises prepare and know clearly about the aforementioned agreement prior to the agreement coming into effect, bringing real benefit to enterprise community in the two sides.

 

The double taxation avoidance agreement and the agreement on preventing taxation evasion with income-related taxes were signed between Viet Nam and the Hong Kong Special Administrative Region on December 16, 2008 in Ha Noi and will come into effect on January 1, 2010. Enterprises and people in the two sides will benefit once the agreements come into effect. Accordingly, if Vietnamese and Hongkongese enterprises and people pay taxes for their incomes and profit that they earned in Viet Nam or Hong Kong to the state budget of Viet Nam or Hong Kong, respectively, tariffs that they must pay to their mother countries will be deducted.

 

The agreement was signed in order to foster the trade and investment relations between Viet Nam and Hong Kong, creating a clearly and stably legal environment on tax for Vietnamese and Hongkongese investors. 

 

Procedures applied to the double taxation avoidance agreement between Viet Nam and Hong Kong are the same as agreements that Viet Nam clinched with other countries, said Le Hong Hai, deputy general director of the General Department of Taxation under the Vietnamese Ministry of Finance. However, the biggest current difference is that enterprises and individuals may base on regulations stipulated by the agreement to fill in declarations and to self-responsible for information that they declared in the declarations. Previously, enterprises and individuals had to draw up their complaints and hand in them to Vietnamese taxation offices. The offices will give their decisions to the enterprises and individuals after considering their complaints.

 

Therefore, enterprises and individuals are objects of the agreement, Hai attributed, adding that if enterprises and individuals send their taxation evasion announcements and related documents to Vietnamese taxation offices prior to 15 days they implement their business contracts in Viet Nam, they will be allowed to apply the tax regulations stipulated on the agreement.

 

Once the agreement comes into effect, it will bring the same benefit to enterprises and people in the two sides, as well as foster strongly the trade and investment activities between Viet Nam and Hong Kong, said Alice Lau, a representative from the Taxation Office in the Hong Kong Special Administrative region.

 

The Hong Kong Special Administrative Region (China) currently ranks eighth among countries and territories investing in Viet Nam. In 2008, the bilateral trade turnover between Viet Nam and Hong Kong reached USD 4 billion.