Circular No. 37/2000/TT-BTC amends and supplements Circular No. 95/97/TT-BTC dated December 29, 1997 of the Ministry of Finance on guiding and explaining the contents of clauses in double tax avoidance contracts between Vietnam and countries that have signed and are in effect in Vietnam,

CIRCULAR

Amending and supplementing Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance on guiding and explaining the contents of the Articles of Double Taxation Avoidance Agreements between Vietnam and countries that have signed and taken effect in Vietnam.

 

In recent times, the Law on Corporate Income Tax has been enacted to replace the Law on Profits Tax and additional Double Taxation Avoidance Agreements have been signed and taken effect in Vietnam. To align with changes and supplements in tax laws and Double Taxation Avoidance Agreements, while addressing current issues in implementing Double Taxation Avoidance Agreements, the Ministry of Finance amends and supplements some points of Circular No. 95/1997/TT-BTC dated December 29, 1997 as follows:

1.Supplementing one legal basis after the first legal basis with the following content:

"Thecontent of Double Taxation Avoidance Agreements between Vietnam and countriescurrently in force"

2.According to the provisions of Decree No. 13/1999/NĐ-CP dated March 17, 1999 of the Government on the organization and operation of foreign credit institutions, offices, representative offices of foreign credit institutions in Vietnam, foreign bank branches operating in Vietnam are not Vietnamese legal entities. According to the Agreement, foreign bank branches are considered permanent establishments of foreign banks in Vietnam. Therefore, remove the phrase "foreign bank branches" in item (ii) point 2.2.b Part I, in point 2.1 and in point 8.5 Part II.

3.Point 2.2 and 2.3 Part II are amended as follows:

"2.2.In the case of determining that a foreign enterprise has a permanent establishment in Vietnam, the taxable income of the foreign enterprise obtained through such permanent establishment will be determined according to the provisions of Circular No. 99/1998/TT-BTC dated July 14, 1998 of the Ministry of Finance guiding the implementation of Decree No. 30/1998/NĐ-CP dated May 13, 1998 of the Government detailing the implementation of the Law on Corporate Income Tax.

Inthe case where such permanent establishment operates on the basis of a contractsigned between them and Vietnamese organizations or individuals, the taxableincome will be determined according to the provisions of Circular No. 169/1998/TT-BTC dated December 22, 1998 of the Ministry of Finance guiding the tax regime applicable to foreign organizations and individuals engaged in business activities in Vietnam not falling under the forms of investment under the Law on Foreign Investment in Vietnam and Circular No. 95/1999/TT-BTC dated August 6, 1999 of the Ministry of Finance amending and supplementing Circular No. 169/1998/TT-BTC."

4.In Point 3.1.b Part II, the phrase "profits tax and turnover tax" is replaced by the phrase "stamp duty".

5.In Point 3.2 Part II, the section "Circular No. 85 TC/TCT dated October 24, 1994 guiding the collection of stamp duty for foreign ships operating cargo transportation at Vietnamese seaports" is replaced by the section "Circular No. 16/1999/TT-BTC dated February 4, 1999 of the Ministry of Finance guiding the implementation of stamp duty for the business activity of cargo transportation by sea by foreign shipping companies entering Vietnam for transport operations."

6.Modifying some contents in Point 2.1a Part V regarding procedures for implementing the Agreement as follows:

"(i)Residence certificate issued by the tax authority of the country of residence (clearly stating the tax year of the resident);

(ii)Copies of business registration or tax registration certificates issued by the country of residence in the case of businesses or independent practitioners, or copies of passports in the case of dependent individuals (employees receiving wages under labor contracts);

(iv)Original tax payment receipts or copies of tax payment receipts and confirmation from the State Treasury office where the organization or individual paid the tax (according to the confirmation form prescribed in Circular No. 25/2000/TT-BTC dated March 30, 2000 of the Ministry of Finance);"

7.Modifying Point 3 Part V as follows: "In cases where, according to the Agreement and Vietnamese tax law, residents of the contracting country with Vietnam have income generated in Vietnam that must be taxed in Vietnam, based on the tax declaration, tax payment receipts, and the application of the foreign resident or their authorized representative, the provincial or municipal tax authority shall examine and issue a confirmation of taxes paid in Vietnam within 15 days from the date of receipt of the application, according to the confirmation form prescribed in Appendix A or Appendix B attached to this Circular."

8.Supplementing Point 5 Part V regarding the legalization and consular certification of documents used as bases for implementing the Agreement's provisions as follows:

"5)Signatures and seals on documents from foreign countries intended for use in Vietnam must be legalized by diplomatic representation of Vietnam abroad, as stipulated in Circular No. 01/1999/TT-NG dated June 3, 1999 of the Ministry of Foreign Affairs.

Signatures and seals on documents from Vietnam intended for use abroad may be certified by the Consular Department of the Ministry of Foreign Affairs or the Department of Foreign Affairs of Ho Chi Minh City, if required."

9.Supplementing four appendices guiding the explanation of Double Taxation Avoidance Agreements between Vietnam and Italy (Appendix 26), Indonesia (Appendix 27), Canada (Appendix 28), and Belgium (Appendix 29).

10.Modifying and supplementing Appendices XXIV and XXV as follows:

Appendix XXIV is replaced by Appendix A and Appendix B.

Appendix XXV is replaced by Appendix C.

Theordinal numbers in the appendices guiding and explaining the tax agreements issued together with Circular No. 95/1997/TT-BTC dated December 29, 1997 and Circular No. 59/1998/TT-BTC dated May 12, 1998, which were written in Roman numerals, are now revised to Arabic numerals. The ordinal numbers of the appendices concerning tax confirmation certificates according to the Agreement, which were written in Roman numerals, are now revised to alphabetical symbols (A, B, C...).

ThisCircular takes effect from the date of signature. During the implementation process, if there are any difficulties, please report to the Ministry of Finance for timely examination, resolution, and supplementary guidance.

 

ANNEX A

GENERAL DEPARTMENT OF TAXATION SOCIALIST REPUBLIC OF VIETNAM

GeneralDepartment of Taxation SOCIALIST REPUBLIC OF VIETNAM

TaxDepartment...                                     Independence - Freedom - Happiness

Departmentof Taxation of... Independence - Freedom - Happiness

Number (No.) :                                                         ------------------------------------

..., day month year

 

CERTIFICATE OF PERSONAL OR BUSINESS INCOME TAX PAYMENT IN VIETNAM

(CÁ NHÂN HOẶC DOANH NGHIỆP) TẠI VIỆT NAM

Certificate of (Personal or Business Income Tax Payment in Vietnam

Respected:

To:

 

The Taxation Department of ...certifies that it has received (and/or granted the exemption, the reduction of) the mentioned income tax amount from (to) the above taxpayer.

It is hereby certified that the Taxation Department of ...has received (and/or granted the exemption, the reduction of) the mentioned income tax amount from (to) the above taxpayer.

                                                                                                Director of Taxation Department of

Director of Taxation Department of …….

(Signed and Sealed) - Signed and sealed                                                                                                   ------------------------------------

GENERAL DEPARTMENT OF TAXATION SOCIALIST REPUBLIC OF VIETNAM

GeneralDepartment of Taxation SOCIALIST REPUBLIC OF VIETNAM

TaxDepartment...                                     Independence - Freedom - Happiness

Departmentof Taxation of... Independence - Freedom - Happiness

Number (No.) :                                                       ------------------------------------

..., day month year

 

CERTIFICATE OF TAX PAYMENT ON ROYALTY OR INTEREST OR REMITTED INCOME

CERTIFICATE OF TAX PAYMENT

ON ROYALTY OR INTEREST OR REMITTED INCOME

Respectfully submitted to: ...

             Name of Captain (vessel operator)

The Department of Taxation of ...certifies that it has received (and/or granted the exemption, the reduction of) the income tax amount from (to) the following taxpayer in respect of income on:

The Department of Taxation of ...certifies that it has received (and/or granted the exemption, the reduction of) the income tax amount from (to) the following taxpayer in respect of income on:

Royalty Payment amend        Interest from loans      Remitted income

Royalty Interest Remitted income

Beneficial Owner(Beneficial owner)

Name:...

Address (of business or residence place) : ...

Address (of business or residence place)

Tax Identification Number (or ID card/ passport):...

Number of tax identification (or I.D card/passport)

Designated Person as Beneficiary (other than the beneficial owner)(In case not being the beneficial owner)

Designated person as beneficiary (other than the beneficial owner)

Name:...

Address (of business or residence place) : ...

Address (of business or residence place)

Tax Identification Number (or ID card/ passport):...

Number of tax identification (or I.D card/passport)

 

Income Payer (Income payer)

Name:...

Address (of business or residence place) : ...

Address (of business or residence place)

Tax Identification Number (or ID card/ passport):...

Number of tax identification (or I.D card/passport)

Reason for Payment (Reason for which the payment is made):…………………………………………………………..

....................................................................................................................................

....................................................................................................................................

 

Director of Taxation Department of

Director of Taxation Department of …….

(Signed and Sealed) - Signed and sealed      

 

Annex C

GENERAL DEPARTMENT OF TAXATION SOCIALIST REPUBLIC OF VIETNAM

GeneralDepartment of Taxation SOCIALIST REPUBLIC OF VIETNAM

TaxDepartment...                                     Independence - Freedom - Happiness

Departmentof Taxation of... Independence - Freedom - Happiness

Number (No.) :                                                       ------------------------------------

..., day month year

                                                                                     

CERTIFICATE OF TAX RESIDENCE

CERTIFICATE OF TAX RESIDENCE

Respectfully submitted to:...

             To:

Pursuant to the Agreement between Vietnam and ..., the Department of Taxation of ...certifies that the following taxpayer is a resident for tax purposes in Vietnam for the tax years of ...

Pursuant to the Agreement between Vietnam and ..., the Department of Taxation of ...certifies that the following taxpayer is a resident for tax purposes in Vietnam for the tax years of ...         

Name:...

Address (of business or residence place) : ...

Address (of business or residence place)

Tax Identification Number (or ID card/ passport):...

Number of tax identification (or I.D card/passport)

 

Director of Taxation Department of

Director of Taxation Department of …….

(Signed and Sealed) - Signed and sealed      

 

ANNEX NUMBER 26

Agreement between Vietnam and Italy

(Attached Circular No. 37/2000/TT-BTC dated May 5, 2000

of the Ministry of Finance, amending and supplementing Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance)

Although there are provisions in Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance, the following guiding provisions will be applied in the implementation of the Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Italian Republic on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, which came into effect on February 20, 1999, and shall apply to taxes in Vietnam from January 1, 1996.

1. Income from share interest:

According to Clause 2 Article 10 of this Agreement, the maximum rate specified at Point 5.2 Clause 5 Section II of the Circular is:

a.         Five percent of the total amount of share interest if the beneficial owner is a company (excluding partnership organizations) directly controlling at least 70% of the capital of the company paying share interest;

b.         Ten percent of the total amount of share interest if the beneficial owner is a company (excluding partnership organizations) directly controlling between 25% and 70% of the capital of the company paying share interest;

c.         Fifteen percent of the total amount of share interest in all other cases.

2. Income from interest on loans:

2.1 According to Clause 2 Article 11 of this Agreement, the maximum rate specified at Point 6.2 Clause 6 Section II of the Circular is ten percent of the total amount of interest on loans;

2.2 Interest on loans arising from sources in Vietnam will be exempt from tax in Vietnam if:

a.         The entity paying interest on loans is either the Government of Vietnam or a local administrative agency of Vietnam;

b.         Interest from loans is paid to the Government of Italy or a local administrative agency of Italy, or any agency or organization (including a financial institution) wholly owned by the Italian State or a local administrative agency of Italy;

c.         Interest from loans is paid to any other agency or organization (including a financial institution) that has loans executed under an agreement signed between Vietnam and Italy;

3. Income from royalties and service fees:

3.1 According to this Agreement, Article 6.3 Clause 6 Section II Circular is supplemented with the following definition of Service Fees:

The term "service fees" used herein means payments of any kind made to an entity, except for payments made to employees of the entity paying the fees, for any management, technical, or advisory services performed in a Contracting State where the payer of the fees is a resident;

3.2 According to Clause 2 Article 12 of this Agreement, the tax rate specified in Point 7.2 Clause 7 Section II Circular is:

a.         Ten percent of the total royalty amount;

b.         Seven and a half percent of the total service fee amount.

4. Capital Gains:

According to the provisions of Clause 4 Article 13 of this Agreement, taxation on income from the transfer of property as stipulated in Point 8 Section II Circular also applies to the transfer of shares in a company that is a resident of a Contracting State, provided that the transferring party holds at least 25% of the company's share capital.

5. Other Income:

According to the provisions of Clause 3 Article 22 of the Agreement, if there is a special relationship between the parties conducting activities generating income as stipulated in Point 17 Section II of the Circular, any payment exceeding the amount agreed upon by independent parties will be subject to taxation in the Contracting State where the income arises, according to its domestic laws while taking into account the other provisions of this Agreement.

ANNEX NUMBER 27

Agreement between Vietnam and Indonesia

(Attached Circular No. 37 /2000/Circular No. 95/1997/TT-BTC dated May 5, 2000

of the Ministry of Finance, amending and supplementing Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance)

Although there are provisions in Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance, the following guidelines shall apply in implementing the Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Republic of Indonesia on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income which came into effect on February 10, 1999 and applied to taxes in Vietnam from January 1, 2000.

1. Permanent Establishment:

1.1 According to the provisions of Clause 3.b Article 5 of this Agreement, the period constituting a permanent establishment for the provision of services as stipulated in Point 3.2.c Clause 3 Section I of the Circular is three months within a continuous twelve-month period.

1.2 According to this Agreement, Paragraph 3.2.e Clause 3 Section I of the Circular is replaced with the following provisions:

An entity acting on behalf of a business enterprise

a. regularly performs in that State the authority to negotiate and conclude contracts in the name of the enterprise, unless such activities are merely preparatory or auxiliary as described in Point 3.3 of the Circular;

b. does not have such authority but regularly maintains in Vietnam a warehouse or other property through which goods or property are regularly delivered on behalf of the enterprise;

c. produces or processes in Vietnam goods or property belonging to the enterprise.

1.3 According to this Agreement, the activities of foreign insurance companies collecting premiums or insuring risks within Vietnam through employees or non-agent representatives with independent status are considered to have a permanent establishment in Vietnam.

2. Corporate Profits:

According to the provisions of Clause 1 b and c Article 7 of the Agreement, a foreign enterprise is not only taxed in Vietnam on profits allocated to a permanent establishment in Vietnam as stipulated in Point 2 Section II of the Circular, but also taxed on profits allocated to sales of goods or products, or allocated to business operations conducted in Vietnam similar to assets or goods, or business operations carried out through a permanent establishment in Vietnam.

3. Associated Enterprises:

According to the provisions of Clause 3 Article 9 of this Agreement, the time limit for adjusting transfer prices between associated enterprises to conform to arm's length prices as stipulated in Point 4 Section II of the Circular shall not exceed the time limits prescribed in the domestic laws of each country.

4. Income from Dividend Interest:

According to Clause 2 Article 10 of this Agreement, the tax rate specified in Point 5.2 Clause 5 Section II Circular is fifteen percent of the total dividend interest amount;

5. Income from Loan Interest:

5.1 According to Clause 2 Article 11 of this Agreement, the tax rate specified in Point 6.2 Clause 6 Section II of the Circular is fifteen percent of the total loan interest amount;

5.2 Loan interest arising from sources in Vietnam will be exempt from tax in Vietnam if:

a.         it is paid to the Government of Indonesia including local administrative agencies and grassroots administrative agencies of Indonesia;

b.         it is paid to the Central Bank or any financial institution controlled by the Government of Indonesia, where the capital of the bank or financial institution is wholly owned by the Government of Indonesia, as agreed upon periodically by the Competent Authorities of Vietnam and Indonesia.

6. Income from Royalties:

6.1 According to Clause 2 Article 12 of this Agreement, the tax rate specified in Point 7.2 Clause 7 Section II Circular is fifteen percent of the total royalty amount;

 7. Capital Gains from Transfer of Property:

Pursuant to the provision set forth in Clause 5, Article 13 of this Agreement, the taxation on income from the transfer of assets as stipulated in Point 8, Section II of the Circular shall also be applied in the case of the transfer of shares in a company that is a resident of a Contracting State.

8. Income from independent personal services:

Pursuant to the provision set forth in Clause 1.b, Article 14 of this Agreement, the limitation period for the right to tax income from independent personal services performed in Vietnam as stated at Point 9.3 and 9.4, Clause 9, Section II of the Circular is 90 days instead of 183 days as previously mentioned.

9. Income from dependent personal services:

Pursuant to the provision set forth in Clause 1.a, Article 15 of this Agreement, the limitation period for the right to tax income from dependent personal services performed in Vietnam as stated at Paragraph 10.2.a, Clause 10, Section II of the Circular is 90 days instead of 183 days as previously mentioned.

10. Income from pensions:

Pursuant to the provision set forth in Clause 1, Article 18 of this Agreement, the source country where the income from pensions as stated at Point 13.1, Clause 13, Section II of the Circular arises may tax such income.

11. Other income:

Pursuant to the provision set forth in Article 22 of this Agreement, other types of income as stated at Point 17.1, Clause 17, Section II of the Circular may be taxed in the country where the income arises. In the case where the place of origin of the income is Vietnam, Vietnam may tax such income.

 

           

ANNEX NUMBER 28

Agreement between Vietnam and Canada

(Attached Circular No. 37 /2000/Circular No. 95/1997/TT-BTC dated May 5, 2000

of the Ministry of Finance, amending and supplementing Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance)

Although there are provisions in Circular No. 95/1997/TT-BTC dated December 29, 1997 of the Ministry of Finance, the following guiding provisions will be applied in the implementation of the Agreement between the Government of the Socialist Republic of Vietnam and the Government of Canada on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income which came into effect on December 16, 1998 and applied to taxes in Vietnam from January 1, 1999:

1. General terms:

The term "person" includes individuals, companies, joint stock organizations, and any other organization, including an estate or trust.

2. Permanent establishment:

2.1. According to this Agreement, Paragraph 3.2.a, Clause 3, Section I of the Circular is replaced by the following provision:

a.         That enterprise has in Vietnam: a management office, branch, office (including a foreign trader's commercial representative office in Vietnam authorized to conclude commercial contracts), factory, production workshop, mine, oil or gas well, quarry, or any other location related to the exploration or exploitation of natural resources.

2.2. According to this Agreement, an insurance organization is considered a resident of Canada if it collects premiums or insures risks in Vietnam through an entity without independent status, except in the case of reinsurance, it will be deemed to carry out business activities in Vietnam through a permanent establishment in Vietnam.

3. Income from business operations:

According to this Agreement, no profit is allocated to a permanent establishment of a Canadian enterprise in Vietnam if such permanent establishment merely purchases goods or assets for the enterprise.

4. Determination of taxable profits of associated enterprises:

According to this Agreement, the adjustment of income of an enterprise as directed in Clause 4, Section II of the Circular will not be applied after the expiration of the time limit prescribed by national laws and in no case more than five years from the end of the year in which the income earned by the enterprise should have been subject to adjustment, however, this rule does not apply in cases of fraud, intentional deceit, or negligence.

5. Income from share dividends:

According to Clause 2, Article 10 of this Agreement, the maximum tax rate specified in Point 5.2, Clause 5, Section II of the Circular is 5%, 10%, and 15% depending on the specific circumstances as follows:

a. 5% of the total amount of dividends if the recipient is a company that controls at least 70% of the voting rights of the dividend-paying company;

b. 10% of the total amount of dividends if the recipient is a company that controls at least 25% but less than 70% of the voting rights of the dividend-paying company;

c. 15% of the total amount of dividends in all other cases.

6. Income from interest:

6.1 According to Clause 2, Article 11 of this Agreement, the maximum tax rate specified in Point 5.2, Clause 5, Section II of the Circular is 10% of the total amount of interest from loans.

6.2 In the case where Vietnam taxes income from interest paid by Vietnamese organizations or individuals to residents of foreign countries, interest paid to the Government of Canada, or to local authorities of Canada, such interest will be exempt from tax in Vietnam, or if the interest is related to a loan guaranteed or insured by any organization whose capital is wholly owned by the Government of Canada and agreed upon in the exchange of letters between the competent authorities of Vietnam and Canada, such interest will also be exempt from tax in Vietnam.

7. Income from royalties and technical service fees:

According to Clause 2, Article 12 of this Agreement, the maximum tax rate specified in Point 7.2, Clause 7, Section II of the Circular is 10% of the total amount of royalties.

According to Clause 2, Article 12 of this Agreement, in the case where technical service fees arise in Vietnam and are paid to a resident of Canada, and if the recipient of the technical service fee is the beneficial owner, the tax rate in Vietnam will not exceed 7.5% of the total amount of the fee.

8. Income from pensions:

According to Clause 2, Article 18 of this Agreement, pensions arising in Vietnam and paid to a resident of Canada may also be taxed in Vietnam. However, in the case of periodic pensions, in addition to amounts paid under social insurance law in Vietnam, the tax rate in Vietnam will not exceed 15% of the total amount of these payments.

9. Other income:

According to this Agreement, Clause 17, Section II of the Circular is replaced by the following provision:

17.1. Article 21 provides for the taxation of other income not covered by other provisions of the Agreement.

17.2. Pursuant to Article 21, where a resident of Vietnam has other income as referred to in point 17.1, regardless of where it arises, such income shall be subject to tax only in Vietnam (or if the resident is of Canada, then only in Canada).

 

ANNEX NUMBER 29

Agreement between Vietnam and Belgium

(Attached Circular No. 37/Decision No. 2000/TT/BTC dated May 5, 2000 of the Ministry of Finance amending and supplementing Circular No. 95/Decision No. 1997/TT/BTC dated December 29, 1997 of the Ministry of Finance)

Although there are provisions in Circular No. 95/1997/TT/BTC dated December 29, 1997 of the Ministry of Finance, the following guidelines will apply in the implementation of the Agreement between the Government of the Socialist Republic of Vietnam and the Government of the Kingdom of Belgium on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital which became effective from June 25, 1999 and applied to taxes in Vietnam from January 1, 2000:

1. Permanent Establishment:

Under this Agreement, paragraph 3.2.a of Section 3 of Circular No. 95 shall be replaced by the following provision:

a.         The enterprise has in Vietnam: headquarters, branch, office (including commercial representative offices of foreign traders located in Vietnam authorized to conclude commercial contracts), factory, production workshop, warehouse, mine, oil well or gas well, quarry or natural resource exploration site.

2. Business income:

2.1. Under this Agreement, no profit shall be allocated to a permanent establishment of a Belgian enterprise in Vietnam if such permanent establishment merely purchases goods or assets for the enterprise.

2.2. Under this Agreement, in relation to Article 7, paragraph 1, profits derived by a Belgian company from the purchase or sale of goods of the same or similar kind as those sold through its permanent establishment in Vietnam, or from carrying out business activities of the same or similar kind as those carried out through its permanent establishment in Vietnam, shall be allocated to that permanent establishment if it can be established that such transactions were made with the purpose of avoiding tax in Vietnam.

2.3. Under this Agreement, in relation to the taxation and allocation of taxable profits to a permanent establishment of a Belgian company in Vietnam as provided in Articles 7, paragraphs 1 and 2, in the case of survey, supply, installation or construction contracts for industrial, commercial or scientific equipment, or warehouses, or public works, the profits allocated to the permanent establishment in Vietnam through which the Belgian company carries out its business activities in Vietnam shall be calculated based on the portion of the work performed under the contract by that permanent establishment.

5. Income from share dividends:

According to Article 10, paragraph 2 of this Agreement, the tax rate limit specified in Item 5.2 of Section II of the Circular is 5%, 10%, and 15% of the total dividend income, depending on the following circumstances:

(a) 5% of the total dividend income if the recipient is a company directly or indirectly holding at least 50% of the capital of the company paying the dividend;

(b) 10% of the total dividend income if the recipient is a company directly or indirectly holding at least 25% but less than 50% of the capital of the company paying the dividend;

(c) 15% of the total dividend income in all other cases.

These tax rate limits include the tax on the repatriation of profits from Vietnam.

6. Income from interest:

According to Article 11, paragraph 2 of this Agreement, the tax rate limit specified in Item 6.2 of Section II of the Circular is 10% of the total interest income.

Where Vietnam taxes income from interest paid by Vietnamese organizations or individuals to residents of another country, such interest income shall be exempt from tax in Vietnam if:

(i) the interest is received and enjoyed by the Government of Belgium, an agency or local authority of Belgium; or

(ii) the interest is received and enjoyed by the Central Bank of Belgium or any organization whose capital is wholly owned by the Government of Belgium or an agency or local authority of Belgium.

7. Royalty income:

7.1. According to Article 12, paragraph 2 of this Agreement, the tax rate limit specified in Item 7.2 of Section 7 of Section II of the Circular is 5%, 10%, and 15% of the total royalty income, depending on the following circumstances:

a. 5% of the total royalty income if the royalties are paid for the use or right to use any patent, design, model, plan, formula, or process, or for information concerning industrial or scientific experience;

b. 10% of the total royalty income if the royalties are paid for the use or right to use trademarks or information concerning trade experience;

c. 15% of the total royalty income in all other cases.

7.2. However, in the case where a resident of Belgium performs technical services in Vietnam without having a permanent establishment or fixed place of business in Vietnam, such income shall be taxed in Vietnam at a rate not exceeding 5%.

15. Income of students and apprentices:

Under this Agreement, Item 15.2.b of Section 15 of Section II of the Circular shall be replaced by the following provision:

b. Income received by students or trainees from work in Vietnam directly related to their study or training in Vietnam shall not be taxed in Vietnam provided that such income does not exceed the equivalent amount of VND corresponding to 120,000 Belgian Francs per year.

16. Income of teachers, professors, and researchers:

The provisions of Item 16 of Section I of the Circular regarding the income of teachers, professors, and researchers shall not apply under this Agreement. 17. Other income:

17.1. Article 21 provides for the taxation of other income not covered by other provisions of the Agreement;

According to this Agreement, Clause 17, Section II of the Circular is replaced by the following provision:

17.1. Article 21 provides for the taxation of other income not covered by other Articles of the Agreement;

17.2. Pursuant to Clause 1 of Article 21, where a resident of Vietnam has other income as referred to in Point 17.1, regardless of its source, shall only be subject to tax in Vietnam (or if they are a resident of Belgium, they shall only be subject to tax in Belgium);

17.3. Pursuant to Clause 2 of Article 21, if a resident of Belgium has other income from Vietnam and carries out business activities in Vietnam through a permanent establishment in Vietnam, or carries out independent personal services through a fixed place of business in Vietnam, and such other income is effectively connected with that permanent establishment or fixed place of business, then such other income shall not be exempt from tax in Vietnam but shall be taxed according to the provisions of Article 7 Business Income and Article 14 Independent Personal Services./.