• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 12/9/2013

Vietnam - Interest income under tax treaty with France 

December 9:  Vietnam provided guidance on certain tax provisions under the Vietnam-France income tax treaty.

Because the Vietnam-France income tax treaty does not contain separate provisions with respect to the taxation of interest income from loan transactions:

  • Interest income of French enterprises arising from loans repurchased from their branches in Vietnam would be considered to be “other income” and subject to the rules under the treaty’s Article 20 (i.e., only taxable in France, and effectively providing a tax exemption in Vietnam).

  • However, if interest income is from loan transactions of a French enterprise conducted through a permanent establishment in Vietnam, such interest income would be taxable in Vietnam.

Read a November 2013 report [PDF 360 KB] prepared by the KPMG member firm in Vietnam: Technical Update (November 2013)

The KPMG report also provides discussions of the following topics:

  • Corporate tax treatment of increased income due to expansion
  • Value added tax (VAT) deduction and refund invoice issuance
  • Letters of authorisation for individuals in transactions with the tax authorities

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