S.I. No. 453/2008 - Double Taxation Relief (Taxes on Income) (Socialist Republic of Vietnam) Order 2008

1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes covered by this Agreement, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Article 1.

2. Any information received under paragraph 1 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 paragraph 1, or the oversight of the above. 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.

3. In no case shall the provisions of paragraphs 1 and 2 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).

4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

ARTICLE 28

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.

ARTICLE 29

Entry into Force

Each of the Contracting State shall notify to the other in writing through diplomatic channels of the completion of the procedures required by its legislation for the entry into force of this Agreement. This Agreement shall enter into force on the date of the later of these notifications. The Agreement shall thereupon have effect

(

a

) with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of January in the calendar year next following that in which the Agreement enters into force; and

(

b

) with regard to other taxes, in respect of taxable periods beginning on or after the first day of January in the calendar year next following that in which the Agreement enters into force.

ARTICLE 30

Termination

This Agreement shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving to the other Contracting State written notice of termination at least six months before the end of any calendar year beginning after the expiry of five years from the date of entry into force of the Agreement. In such event, the Agreement shall cease to have effect

(

a

) with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of January in the calendar year next following that in which such notice is given; and

(

b

) with regard to other taxes, in respect of taxable periods beginning on or after the first day of January in the calendar year next following that in which such notice is given.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective Governments, have signed this Agreement.

DONE in duplicate at Dublin this 10th day of March of the year Two Thousand and Eight in the English and Vietnamese languages, both texts being equally authentic.

FOR THE GOVERNMENT OF IRELAND

FOR THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM

Brian Cowen

Tran Xuan Ha

GIVEN under the Official Seal of the Government,

29 October 2008

BRIAN COWEN.

Taoiseach.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This Order gives the force of law to the Agreement between Ireland and Vietnam for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes and income, which is set out in the Schedule to the Order. The effect of the Agreement is summarised below.

This Agreement with Vietnam, which was signed in Dublin on 10 March 2008, is comprehensive in scope and is based on the OECD Model Convention.

The taxes covered by the Agreement are, for Ireland, Income Tax, Corporation Tax and Capital Gains Tax: for Vietnam, the Personal Income Tax and the Business Income Tax.

The Agreement provides for the allocation of taxing rights between Ireland and Vietnam and for the granting of relief from double taxation with regard to items of income and capital gains which, under the laws of Ireland and the laws of Vietnam, may under the terms of the Agreement be taxed in both countries.

Where both countries continue to have taxing rights, for example in the case of dividend, interest and royalty income, business profits arising through a permanent establishment which a person resident in one country has in the other country, or in the case of capital gains arising from the disposal of immovable property, the Agreement provides that the country of residence of the recipient of the income or gain will give credit against its tax on the income or gains for the tax paid in the other country on the same income or gains. Irish direct investors (i.e. Irish companies holding 10% or more of the shares of the paying company) in receipt of dividends from a Vietnamese company are granted credit for the tax paid by the Vietnamese company on the profits out of which the dividends are paid (known as credit for underlying tax). Vietnam operates a range of fiscal incentives in order to encourage inward investment, which Ireland has agreed to support in the Agreement. Accordingly, Ireland has agreed to give a deemed credit for the Vietnamese tax which would have been paid but for any exemption or reduction of tax granted under incentive provisions in Vietnamese law designed to promote industrial, commercial scientific or educational development in Vietnam. These deeming provisions (known as “tax sparing”) will operate for a period of 10 years from the commencement of the Agreement.

Reduced rates of withholding tax are provided for in the case of dividend, interest, royalty and technical fees income. With respect to dividend income, the Agreement provides for a reduced rate of 5% of the gross dividend where the recipient is a company that owns 70% of the company paying the dividends; and 10% otherwise. Exemption from source state taxation on interest is provided where interest is derived and beneficially owned by the Government of a Contracting State, Central Bank, agency, or statutory body or institution wholly or mainly owned by the Government of a Contracting State; otherwise source country taxation of interest is limited to 10%. In the case of royalties the rate may not exceed 5% where they are paid for the use of or the right to use any patent, design or model, plan, secret formula or process, or for information concerning industrial or scientific experience and a rate of 10% for the use of or the right to use, a trade mark or for information concerning commercial experience; a rate of 15% applies in all other cases. Source state taxation on technical fees is restricted to 7.5%.

The Agreement also provides for safeguarding nationals and enterprises of one country against discriminatory taxation in the other country, for consultation between the competent authorities of the two countries for the purpose of resolving any doubts or difficulties arising as to the interpretation or application of the Agreement and for the exchange of such information between these authorities as is necessary for carrying out the provisions of the Agreement or of the domestic law of either country in relation to the taxes covered by the Agreement.

The Agreement will enter into force when each country notifies the other of the completion of its procedures for bringing the Convention into force. It will thereupon have effect in both countries for tax periods beginning in the following year.

6. For the purpose of subparagraph (

b

) of paragraph 2, the term “Vietnamese tax payable” shall be deemed to include any amount which would have been payable as Vietnamese tax for any year but for an exemption or reduction of tax granted for that year or any part thereof under any of the following provisions of Vietnamese law

(

a

) Articles 17, 18 and 19 of the Law on Business Income Tax of Vietnam 2003 and the regulations made thereunder, as amended, in so far as they were in force on, and have not been modified since the date of signature of this Agreement, or have been modified since then only in minor respects so as not to affect their general character, and provided always that the competent authority of Vietnam has certified that any such exemption from or reduction of Vietnamese tax given under these Articles has been granted in order to promote industrial, commercial, scientific or educational development in Vietnam and the competent authority of Ireland has accepted that such exemption or reduction has been granted for such purpose; or

(

b

) any other provisions of Vietnamese law granting exemption from or reduction of Vietnamese tax which may subsequently be introduced to promote economic development in Vietnam and which the competent authorities of the Contracting States agree are of a substantially similar character to the provisions named in subparagraph (

a

), if they have not been modified thereafter or have been modified only in minor respects so as not to affect their general character, and subject always to certification and acceptance having taken place as provided for in subparagraph (

a

).

7. Relief from Irish tax by virtue of paragraph 6 shall be given for a period of 10 years only, beginning on the date on which this Agreement entered into force.

ARTICLE 25

Non-discrimination

8. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, and conditions are made or imposed between that enterprise and the agent in their commercial and financial relations which differ from those which would have been made between independent enterprises, he will not be considered an agent of an independent status within the meaning of this paragraph.

9. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE 6

Income from Immovable Property

S.I. No. 453 of 2008

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (SOCIALIST REPUBLIC OF VIETNAM) ORDER 2008

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

4

th November

, 2008.

WHEREAS it is enacted by section 826(1) (as amended by

section 35

of the

Finance Act 2007

(No. 11 of 2007)) of the

Taxes Consolidation Act 1997

(No. 39 of 1997) that where the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax, corporation tax in respect of income and chargeable gains, capital gains tax or any taxes of a similar character imposed by the laws of the State or by the laws of that territory and, in the case of taxes of any kind or description imposed by the laws of the State or the laws of that territory, in relation to exchanging information for the purposes of the prevention and detection of tax evasion or granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax, and that it is expedient that those arrangements should have the force of law, and the order so made is referred to in Part 1 of Schedule 24A of the

Taxes Consolidation Act 1997

, then subject to section 826 of that Act the arrangements shall, notwithstanding anything in any enactment, have the force of law as if such order were an Act of the Oireachtas on and from the date of the insertion of a reference to the order into Part 1 of Schedule 24A

AND WHEREAS it is further enacted by section 826(6) of the

Taxes Consolidation Act 1997

that where such an order is proposed to be made, a draft of the order shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann

AND WHEREAS a draft of the following Order has been laid before Dáil Éireann and a resolution approving of the draft has been passed by Dáil Éireann

NOW, the Government, in exercise of the powers conferred on them by section 826(1) (as amended by

section 35

of the

Finance Act 2007

(No. 11 of 2007)) of the

Taxes Consolidation Act 1997

(No. 39 of 1997) hereby order as follows