Double Tax Agreement between Thailand and Vietnam – An Overview
Thailand and Vietnam have signed a Double Taxation Agreement (DTA) that aims to eliminate double taxation on income earned by residents of one country in the other.
The agreement was signed on 11 October 1995, and has been in effect since 1 January 1997. The DTA seeks to promote cross-border investment, trade and economic relations between the two countries.
What is Double Taxation?
Double taxation occurs when a taxpayer is taxed twice on the same income by two different countries. This can happen when a resident of one country earns income in another country that has a different tax authority.
The DTA between Thailand and Vietnam ensures that residents of either country will not be taxed twice on the same income. The agreement provides a set of rules and procedures to be followed by the tax authorities of each country to avoid double taxation.
Key Provisions of the DTA
The DTA covers various types of income, including income from:
– Business profits
– Dividends
– Interest
– Royalties
– Capital gains
The agreement also defines the taxation rights of each country on different types of income, and provides for the exchange of information between the tax authorities of the two countries.
The agreement also provides for the resolution of disputes between the two countries. In case of any conflict regarding the interpretation or application of the DTA, the two countries are required to consult each other to resolve the issue amicably.
Benefits of the DTA
The DTA between Thailand and Vietnam brings several benefits for individuals and businesses operating in both countries:
1. Elimination of double taxation
The primary benefit of the DTA is that it eliminates double taxation on income earned by residents of one country in the other. This allows individuals and businesses to invest and do business in both countries without worrying about paying tax twice on the same income.
2. Promotes cross-border investment and trade
The DTA helps promote cross-border investment and trade between Thailand and Vietnam by removing tax barriers, ensuring transparency, and providing clear and predictable tax rules.
3. Enhances economic relations
The DTA is a reflection of the strong and growing economic ties between Thailand and Vietnam. The agreement promotes mutual cooperation and enhances economic relations between the two countries.
Conclusion
The Double Taxation Agreement between Thailand and Vietnam is an important agreement that seeks to eliminate double taxation on income earned by residents of one country in the other. The agreement provides clarity, predictability and transparency in tax matters, and helps promote cross-border investment, trade and economic relations between the two countries.