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Singapore – Vietnam Double Tax Treaty

Singapore – Vietnam Double Tax Treaty

The Singapore- Vietnam Double Tax Agreement (DTA) was first signed in 1994. In January 2013, the first DTA was amended when the two states have signed a new protocol, which had as a purpose to update the vision on double taxation for corporate income, arising from the business operations in Singapore and Vietnam. If you are interested in company registration in Singapore and you want to know what benefits may arise from the taxation system here, our specialists in company formation will provide you with consultancy on this matter.

The video below created by our company formation advisers in Singapore shows the most important provisions of the Singapore – Vietnam double tax agreement:

Provisions of the 2013 Singapore- Vietnam DTA

The Singapore- Vietnam double tax treaty signed in 2013 had changed many provisions of the precedent agreement. If you are interested in Singapore company formation, you can find bellow the most important changes that can affect your business:

the permanent establishment of a company was revisited under the new DTA, and, if the precedent agreement referred only to buildings or offices, the new provision states that permanent establishment refers also to furnishings of services of a company. As such, a Vietnamese company having operations in Singapore through a permanent establishment for more than 183 days in 12 months will be taxed on its resulting profits in Singapore.

the withholding tax on royalties has been reduced from 15% to 10%, but there is also an applicable withholding tax of 5% on royalties for the use of certain patents, designs or formulas; if you need to find out more on the royalties DTA provision, our company incorporation specialists can provide you with information. Vietnamese investors who want to open a company in Singapore can receive complete guidance from our local team of consultants.

Capital Gains

Under the new Protocol, the gains that are obtained from the selling of the shares of a Vietnamese company can be taxed in Singapore in the situation in which the Vietnamese corporation is not listed on the stock exchange and if at least 50% of the value of the shares are resulted from immovable property from the contracting state (Singapore).

If you need further information on the Singapore- Vietnam Double Tax Treaty, please contact our local company formation consultants, who can provide you with consultancy when opening a company in Singapore.