Vietnam - Austria Tax Treaty
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Article 16 DIRECTORS' FEES Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.
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Article 17 ARTISTES AND SPORTSMEN (1) Notwithstanding the provisions of Articles 7, 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. (2) Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised. (3) Notwithstanding the provisions of paragraphs 1 and 2, income derived by entertainers or sportsmen who are residents of a Contracting State from activities in the other Contracting State under a plan of cultural exchange between the Governments of both Contracting States shall be exempt from tax in that other Contracting State.
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Article 18 PENSIONS Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
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Article 19 GOVERNMENT SERVICE (1)
a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political subdivision, a local authority or a statutory body thereof to an individual in respect of services rendered to that State or subdivision, authority or body shall be taxable only in that State. b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services.
(2)
a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision, a local authority or a statutory body thereof to an individual in respect of services rendered to that State or subdivision, authority or body shall be taxable only in that State. b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
(3) The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision, a local authority or a statutory body thereof.
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Article 20 STUDENTS AND APPRENTICES (1) Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State. (2) Remuneration which a student or business apprentice who is or was formerly a resident of a Contracting State derives from an employment which he exercises in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned shall not be taxed in that other State if the employment is directly related to his studies or apprenticeship carried out in the first-mentioned State.
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Article 21 OTHER INCOME (1) Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement shall be taxable only in that State. (2) The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. (3) Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Agreement and arising in the other Contracting State may also be taxed in that other State. (4) Income derived by a resident of a Contracting State from the other Contracting State under a legal claim to maintenance may not be taxed in the first-mentioned State if such income would be exempt from tax according to the laws of the other Contracting State.
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Article 22 CAPITAL (1) Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State. (2) Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or by movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State. (3) Capital represented by ships and aircraft operated in international traffic by an enterprise of a Contracting State and by movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that Contracting State. (4) All other elements of capital of a resident of a Contracting State shall be taxable only in that State.
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Article 23 ELIMINATION OF DOUBLE TAXATION
(1) In Austria, double taxation shall be eliminated as follows: a)
Where a resident of Austria derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Vietnam, Austria shall, subject to the provisions of subparagraphs b) and c), exempt such income or capital from tax.
b)
Where a resident of Austria derives items of income which, in accordance with the provisions of Articles 10, 11, 12, paragraphs 4 and 5 of Article 13 and paragraph 3 of Article 21, may be taxed in Vietnam, Austria shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Vietnam. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Vietnam.
c)
Where in accordance with any provision of the Agreement income derived or capital owned by a resident of Austria is exempt from tax in Austria, Austria may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.
(2) In Vietnam, double taxation shall be eliminated as follows: a)
Where a resident of Vietnam derives income, profits or gains which under the law of Austria and in accordance with this Agreement may be taxed in Austria, Vietnam shall allow as a credit against its tax on the income, profits or gains an amount equal to the tax paid in Austria. The amount of credit, however, shall not exceed the amount of the Vietnamese tax on that income, profits or gains computed in accordance with the taxation laws and regulations of Vietnam.
b)
Where in accordance with any provision of the Agreement income derived or capital owned by a resident of Vietnam is exempt from tax in Vietnam, Vietnam may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.
(3) For the purposes of sub-paragraphs 1(a) and 1(b) of this Article, the income derived by a resident of Austria from sources in Vietnam and taxable in Vietnam, but which is exempted from Vietnamese tax fully or partly under the Vietnamese legislation on investment or development incentives, will be considered as fully or partly taxed in Vietnam.
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Article 24 NON-DISCRIMINATION (1) Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. (2) The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents. (3) Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11 or paragraph 6 of Article 12 apply, interest, royalties, fees for technical services and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State. (4) Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected. (5) The provisions of this Article shall apply only to the taxes which are the subject of this Agreement.
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Article 25 MUTUAL AGREEMENT PROCEDURE (1) Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement. (2) The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. (3) The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. (4) The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.
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Article 26 EXCHANGE OF INFORMATION (1) The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws concerning taxes covered by the Agreement, insofar as the taxation thereunder is not contrary to the Agreement. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred to in the first sentence. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. (2) In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public) or to the fundamental rights granted by a State, in particular in the area of data protection.
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Article 27 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.
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Article 28 ENTRY INTO FORCE (1) The Governments of the Contracting States shall notify each other of the completion of the procedures required by its law for the entry into force of this Agreement. This Agreement shall enter into force on the first day of the third month after receipt of the latter of these notifications and shall thereupon have effect: (2) a) in the case of taxes withheld at source on dividends, interest, royalties and fees for technical services, in respect of amounts paid or credited on or after the first day of January of the calendar year next following that in which the Agreement enters into force; b) in the case of other taxes, in respect of taxes levied for fiscal years beginning on or after the first day of January of the calendar year next following that in which the Agreement enters into force.
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Article 29 TERMINATION (1) This Agreement shall continue in effect indefinitely but either Contracting State may, on or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State, through diplomatic channels, written notice of termination and, in such event, the Agreement shall cease to have effect: (2) a) in the case of taxes withheld at source on dividends, interest, royalties and fees for technical services, in respect of amounts paid or credited on or after the first day of January of the calendar year next following that in which the notice of termination is given; b) in the case of other taxes, in respect of taxes levied for fiscal years beginning on or after the first day of January of the calendar year next following that in which the notice of termination is given.
IN WITNESS WHEREOF the undersigned, duly authorised thereto by their respective Governments, have signed this Agreement. DONE in duplicate at Vienna on 2 June, 2008, in the German, Vietnamese and English languages, each text being equally authentic. In case of divergence of interpretation the English text shall prevail.
For the Government of the Republic of Austria: Hans Winkler m.p.
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For the Government of the Socialist Republic of Vietnam: Phạm Sỹ Danh m.p.
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PROTOCOL At the moment of signing the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital, this day concluded between the Government of the Republic of Austria and the Government of the Socialist Republic of Vietnam, the undersigned have agreed that the following provisions shall form an integral part of the Agreement.
- With respect to Articles 10, 11 and 12: If after the entry into force of this Agreement, Vietnam has signed an Agreement or Convention for the avoidance of double taxation with a third State which is a member of the European Union, and that Agreement or Convention contains lower withholding tax rates (including zero rates) than those provided for under this Agreement, these rates will automatically replace the rates of this Agreement, from the date of entry into force of the Convention or Agreement between Vietnam and that third State.
- With reference to Article 11: Notwithstanding the provisions of paragraph 2 of Article 11, as long as, according to the Austrian tax law, the Republic of Austria does not levy a tax at source on interest paid to a resident of Vietnam, the percentage provided for in this paragraph shall be reduced to 5 per cent of the gross amount of the interest.
- With reference to paragraph 4 of Article 21: The income mentioned in this paragraph shall not be taken into consideration when applying the exemption with progression method.
IN WITNESS WHEREOF the Undersigned, duly authorised thereto by their respective Governments, have signed this Protocol.
DONE in duplicate at Vienna on 2 June, 2008, in the German, Vietnamese and English languages, each text being equally authentic. In case of divergence of interpretation the English text shall prevail.
For the Government of the Republic of Austria: Hans Winkler m.p.
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For the Government of the Socialist Republic of Vietnam: Phạm Sỹ Danh m.p.
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ANNEX
With reference to Article 7: a)
In the determination of the profits of a building site or construction, assembly or
installation project there shall be attributed to that permanent establishment in the Contracting State in which the permanent establishment is situated only the profits resulting from the activities of the permanent establishment as such. If machinery or equipment is delivered from the head office or another permanent establishment of the enterprise or a third person in connection with those activities or independently therefrom there shall not be attributed to the profits of the building site or construction, assembly or installation project the value of such deliveries. b) Income derived by a resident of a Contracting State from planning, project, construction or research activities, as well as income from technical services exercised in that State in connection with a permanent establishment situated in the other Contracting State, shall not be attributed to that permanent establishment.
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