Double Taxation Relief (Taxes on Income)

L.N. 286 of 2016

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(The Socialist Republic of Viet Nam) Order, 2016

IN exercise of the powers conferred by article 76 of the Income

Tax Act, the Minister for Finance has made the following order:-

The title of this order is the Double Taxation Relief (Taxes Citation.

on Income) (The Socialist Republic of Viet Nam) Order, 2016.

Article 2

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF MALTA

AND

THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIET NAM

FOR THE AVOIDANCE OF DOUBLE TAXATION AND

THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Malta and the Government of the

Socialist Republic of Viet Nam,

Desiring to conclude an Agreement for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows

Article 1

PERSONS COVERED

This Agreement shall apply to persons who are residents of one or both of the

Contracting States.

Article 2

TAXES COVERED

1. This Agreement shall apply to taxes on income imposed on behalf of a

Contracting State, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total

income, or on elements of income, including taxes on gains from the alienation of

movable or immovable property and taxes on the total amounts of wages or

salaries paid by enterprises.

It is hereby declared

Arrangements to

have effect.

(a)

that the arrangements specified in the Agreement set

out in the Schedule to this Order (hereinafter referred to as "the

Agreement") have been made with the Government of the

Socialist Republic of Viet Nam with a view to affording relief

from double taxation in relation to the following taxes imposed

by the laws of the Socialist Republic of Viet Nam

(i)

the personal income tax; and

(ii) the business income tax;

(b) that it is expedient that those arrangements should

have effect following the entry into force of the Agreement and

in accordance with the relevant provisions of the Agreement;

(c)

that the Agreement shall enter into force on such

date as may be announced by notice in the Government Gazette.

The existing taxes to which the Agreement shall apply are in particular

(a)

in Viet Nam

(i)

the personal income tax; and

(ii)

the business income tax;

(hereinafter referred to as "Vietnamese tax"); and

(b)

in Malta

the income tax;

(hereinafter referred to as "Malta tax").

The Agreement shall apply also to any identical or substantially similar

taxes that are imposed after the date of signature of the Agreement in addition to,

or in place of, the existing taxes. The competent authorities of the Contracting

States shall notify each other of any significant changes that have been made in

their taxation laws.

Article 3

GENERAL DEFINITIONS

1. For the purposes of this Agreement, unless the context otherwise

requires

(a)

the term "Viet Nam" means the Socialist Republic of Viet Nam;

when used in a geographical sense, it means its land territory, islands,

internal waters, territorial sea and airspace above them, the maritime areas

beyond territorial sea including seabed and subsoil thereof over which the

Socialist Republic of Viet Nam exercises sovereignty, sovereign rights and

jurisdiction in accordance with national legislation and international law;

(b) the term "Malta" means the Republic of Malta and, when used in

a geographical sense, means the Island of Malta, the Island of Gozo and the

other islands of the Maltese archipelago including the territorial waters

thereof, as well as any area of the sea-bed, its sub-soil and the superjacent

water column adjacent to the territorial waters, wherein Malta exercises

sovereign rights, jurisdiction, or control in accordance with international law

and its national law, including its legislation relating to the exploration of the

continental shelf and exploitation of its natural resources;

(c)

the terms "a Contracting State" and "the other Contracting State"

mean Viet Nam or Malta as the context requires;

(d) the term "person" includes an individual, a company and any

other body of persons;

(e)

the term "company" means any body corporate or any entity that

is treated as a body corporate for tax purposes;

(f)

the terms "enterprise of a Contracting State" and "enterprise of

the other Contracting State" mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident of

the other Contracting State;

(g)

the term "national", in relation to a Contracting State, means

(i) any individual

possessing

the

nationality

of

that

Contracting State; and

(ii) any legal person, partnership or association deriving its

status as such from the laws in force in that Contracting State;

(h) the term "international traffic" means any transport by a ship or

aircraft operated by an enterprise of a Contracting State, except when the

ship or aircraft is operated solely between places in the other Contracting

State; and

(i)

the term "competent authority" means

(i) in the case of Viet Nam, the Minister of Finance or his

authorised representative;

(ii) in the case of Malta, the Minister responsible for finance or

his authorised representative.

2. As regards the application of the Agreement at any time by a

Contracting State, any term not defined therein shall, unless the context otherwise

requires, have the meaning that it has at that time under the law of that State for the

purposes of the taxes to which the Agreement applies, any meaning under the

applicable tax laws of that State prevailing over a meaning given to the term under

other laws of that State.

Article 4

RESIDENT

1. For the purposes of this Agreement, the term "resident of a Contracting

State" means any person who, under the laws of that State, is liable to tax therein

by reason of his domicile, residence, place of incorporation (or registration), place

of management, or any other criterion of a similar nature, and also includes that

State or local authority thereof. This term, however, does not include any person

who is liable to tax in that State in respect only of income from sources in that

State.

2. Where by reason of the provisions of paragraph 1 an individual is a

resident of both Contracting States, then his status shall be determined as follows

(a)

he shall be deemed to be a resident only of the State in which he

has a permanent home available to him; if he has a permanent home available

to him in both States, he shall be deemed to be a resident only of the State

with which his personal and economic relations are closer (centre of vital

interests);

(b) if the State in which he has his centre of vital interests cannot be

determined, or if he has not a permanent home available to him in either

State, he shall be deemed to be a resident only of the State in which he has an

habitual abode;

(c)

if he has an habitual abode in both States or in neither of them, he

shall be deemed to be a resident only of the State of which he is a national;

(d) if he is a national of both States or of neither of them, the

competent authorities of the Contracting States shall settle the question by

mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than an

individual is a resident of both Contracting States, then it shall be deemed to be a

resident only of the State in which its place of effective management is situated. If

the State in which the place of effective management is situated cannot be

determined, or the place of effective management is in neither State, then the

competent authorities of the Contracting States shall endeavour to determine by

mutual agreement in accordance with Article 25 the Contracting State of which the

person shall be deemed to be a resident for the purpose of the Agreement, having

regard to its places of management, the place where it is registered or incorporated

and any other relevant factors. In the absence of such agreement, such person shall

not be entitled to any relief or exemption from tax provided by this Agreement.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Agreement, the term “permanent

establishment” means a fixed place of business through which the business of an

enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop; and

(f)

a mine, an oil or gas well, a quarry or any other place of

extraction of natural resources.

3. The term "permanent establishment" likewise encompasses

(a)

a building site, construction, assembly or installation project or

supervisory activities in connection therewith, but only if such site, project or

activities last more than six months;

(b) the furnishing of services, including consultancy services, by an

enterprise through employees or other personnel engaged by the enterprise

for such purpose, but only if activities of that nature continue (for the same or

a connected project) within a Contracting State for a period or periods

aggregating more than six months within any twelve-month period; and

(c)

a person conducting in a Contracting State activities (including

offshore activities) which relate to the exploration for and exploitation of

natural resources located in that Contracting State shall be considered as

carrying on business through a permanent establishment in that Contracting

State.

4. Notwithstanding the preceding provisions of this Article, the term

"permanent establishment" shall be deemed not to include

(a)

the use of facilities solely for the purpose of storage or display of

goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of storage or display;

(c)

the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the

purpose of collecting information for the enterprise;

(e)

the maintenance of a fixed place of business solely for the

purpose of carrying on, for the enterprise, any other activity of a preparatory

or auxiliary character;

(f)

the maintenance of a fixed place of business solely for any

combination of activities mentioned in sub-paragraphs (a) to (e), provided

that the overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

Notwithstanding the provisions of paragraphs 1 and 2, where a person -

other than an agent of an independent status to whom paragraph 6 applies - is

acting in a Contracting State on behalf of an enterprise of the other Contracting

State, that enterprise shall be deemed to have a permanent establishment in the

first-mentioned Contracting State in respect of any activities which that person

undertakes for the enterprise, if such a person

(a)

has and habitually exercises in that State an authority to conclude

contracts in the name of the enterprise, unless the activities of such person

are limited to those mentioned in paragraph 4 which, if exercised through a

fixed place of business, would not make this fixed place of business a

permanent establishment under the provisions of that paragraph; or

(b) has no such authority, but habitually maintains in the first-

mentioned State a stock of goods or merchandise from which he regularly

delivers goods or merchandise on behalf of the enterprise.

An enterprise of a Contracting State shall not be deemed to have a

permanent establishment in the other Contracting State merely because it carries

on business in that other Contracting 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.

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

1. Income derived by a resident of a Contracting State from immovable

property (including income from agriculture or forestry) situated in the other

Contracting State may be taxed in that other State.

2. The term "immovable property" shall have the meaning which it has

under the law of the Contracting State in which the property in question is situated.

The term shall in any case include property accessory to immovable property,

livestock and equipment used in agriculture and forestry, rights to which the

provisions of general law respecting landed property apply, usufruct of immovable

property and rights to variable or fixed payments as consideration for the working

of, or the right to work, mineral deposits, sources and other natural resources; ships

and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the

direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income

from immovable property of an enterprise and to income from immovable property

used for the performance of independent personal services.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only

in that State unless the enterprise carries on business in the other Contracting State

through a permanent establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be taxed in the other State

but only so much of them as is attributable to

(a)

that permanent establishment;

(b) sales in that other Contracting State of goods or merchandise of

the same or similar kind as those sold through that permanent establishment.

It is understood that the profits of an enterprise shall include profits

attributable to sales of goods and merchandise referred to in this sub-

paragraph only when the competent authority of the Contracting State in

which a permanent establishment of the enterprise is situated considers that

the enterprise has entered into an arrangement in relation to the sales of those

goods or merchandise to avoid taxation of those profits in that Contracting

State.

2. Subject to the provisions of paragraph 3, where an enterprise of a

Contracting State carries on business in the other Contracting State through a

permanent establishment situated therein, there shall in each Contracting State be

attributed to that permanent establishment the profits which it might be expected to

make if it were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes of the business

of the permanent establishment, including executive and general administrative

expenses so incurred, whether in the State in which the permanent establishment is

situated or elsewhere. However, no such deduction shall be allowed in respect of

amounts, if any, paid (otherwise than towards reimbursement of actual expenses)

by the permanent establishment to the head office of the enterprise or any of its

other offices, by way of royalties, fees or other similar payments in return for the

use of patents or other rights, or by way of commission, for specific services

performed or for management, or, except in the case of a banking enterprise, by

way of interest on moneys lent to the permanent establishment. Likewise, no

account shall be taken, in the determination of the profits of a permanent

establishment, for amounts charged (otherwise than towards reimbursement of

actual expenses), by the permanent establishment to the head office of the

enterprise or any of its other offices, by way of royalties, fees or other similar

payments in return for the use of patents or other rights, or by way of commission

for specific services performed or for management, or, except in the case of

banking enterprise by way of interest on moneys lent to the head office of the

enterprise or any of its other offices.

4. Insofar as it has been customary in a Contracting State to determine the

profits to be attributed to a permanent establishment on the basis of an

apportionment of the total profits of the enterprise to its various parts, nothing in

paragraph 2 shall preclude that Contracting State from determining the profits to

be taxed by such an apportionment as may be customary; the method of

apportionment adopted shall, however, be such that the result shall be in

accordance with the principles contained in this Article.

5. For the purposes of the preceding paragraphs, the profits to be attributed

to the permanent establishment shall be determined by the same method year by

year unless there is good and sufficient reason to the contrary.

6. Where profits include items of income which are dealt with separately in

other Articles of this Agreement, then the provisions of those Articles shall not be

affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise of a Contracting State from the operation of

ships or aircraft in international traffic shall be taxable only in that State.

2. The provisions of paragraph 1 shall also apply to profits from the

participation in a pool, a joint business or an international operating agency.

Article 9

ASSOCIATED ENTERPRISES

1. Where

(a)

an enterprise of a Contracting State participates directly or

indirectly in the management, control or capital of an enterprise of the other

Contracting State, or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of a Contracting State and an

enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in

their commercial or financial relations which differ from those which would be

made between independent enterprises, then any profits which would, but for those

conditions, have accrued to one of the enterprises, but, by reason of those

conditions, have not so accrued, may be included in the profits of that enterprise

and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that

State - and taxes accordingly - profits on which an enterprise of the other

Contracting State has been charged to tax in that other State and the profits so

included are profits which would have accrued to the enterprise of the first-

mentioned State if the conditions made between the two enterprises had been those

which would have been made between independent enterprises, then that other

State shall make an appropriate adjustment to the amount of the tax charged

therein on those profits. In determining such adjustment, due regard shall be had to

the other provisions of this Agreement and the competent authorities of the

Contracting States shall if necessary consult each other.

Article 10

DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting State

to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of

which the company paying the dividends is a resident and according to the laws of

that State, but if the beneficial owner of the dividends is a resident of the other

Contracting State, the tax so charged shall not exceed

(a)

where the dividends are paid by a company which is a resident of

Viet Nam to a resident of Malta -

(i) 5 per cent of the gross amount of the dividends if the

beneficial owner is a company which holds directly at least 50 per cent

of the voting power in the company paying the dividends; and

(ii) 15 per cent of the gross amount of the dividends in all

other cases;

(b) where the dividends are paid by a company which is a resident of

Malta to a resident of Viet Nam who is the beneficial owner thereof, Malta

tax on the gross amount of the dividends shall not exceed that chargeable on

the profits out of which the dividends are paid.

This paragraph shall not affect the taxation of the company in respect of the

profits out of which the dividends are paid.

3. The term "dividends" as used in this Article means income from shares,

"jouissance" shares or "jouissance" rights, mining shares, founders’ shares or other

rights, not being debt-claims, participating in profits, as well as income from other

corporate rights which is subjected to the same taxation treatment as income from

shares by the laws of the State of which the company making the distribution is a

resident.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the dividends, being a resident of a Contracting State, carries on business

in the other Contracting State of which the company paying the dividends is a

resident through a permanent establishment situated therein, or performs in that

other Contracting State independent personal services from a fixed base situated

therein, and the holding in respect of which the dividends are paid is effectively

connected with such permanent establishment or fixed base. In such case the

provisions of Article 7, or Article 15, as the case may be, shall apply.

5. Where a company which is a resident of a Contracting State derives

profits or income from the other Contracting State, that other State may not impose

any tax on the dividends paid by the company, except insofar as such dividends are

paid to a resident of that other State or insofar as the holding in respect of which

the dividends are paid is effectively connected with a permanent establishment or a

fixed base situated in that other State, nor subject the company’s undistributed

profits to a tax on the company’s undistributed profits, even if the dividends paid

or the undistributed profits consist wholly or partly of profits or income arising in

such other State.

Article 11

INTEREST

1. Interest arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in

which it arises and according to the laws of that State, but if the beneficial owner

of the interest is a resident of the other Contracting State, the tax so charged shall

not exceed 10 per cent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraphs 1 and 2, interest arising in

a Contracting State shall be exempt from tax in that State if it is paid

(a)

to the Government of the other Contracting State or the Central

Bank thereof in relation to any loan, debt-claim or credit granted by any such

bodies;

(b) in respect to a loan, debt-claim or credit guaranteed or insured by

an institution for insurance or financing of international trade transactions

which is wholly owned by the other Contracting State or by the Government

of the other Contracting State, as the case may be.

4. The term "interest" as used in this Article means income from debt-

claims of every kind, whether or not secured by mortgage, and whether or not

carrying a right to participate in the debtor's profits, and in particular, income from

government securities and income from bonds or debentures, including premiums

and prizes attaching to such securities, bonds or debentures. Penalty charges for

late payment shall not be regarded as interest for the purpose of this Article.

5. The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the interest, being a resident of a Contracting State, carries on business in

the other Contracting State in which the interest arises, through a permanent

establishment situated therein, or performs in that other Contracting State

independent personal services from a fixed base situated therein and the debt-claim

in respect of which the interest is paid is effectively connected with such

permanent establishment or fixed base. In such case the provisions of Article 7 or

Article 15, as the case may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer is

that State itself, a local authority, or entity thereof, or a resident of that State.

Where, however, the person paying the interest, whether he is a resident of a

Contracting State or not, has in a Contracting State a permanent establishment or a

fixed base in connection with which the indebtedness on which the interest is paid

was incurred, and such interest is borne by such permanent establishment or fixed

base, then such interest shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated.

7. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of

the interest, having regard to the debt-claim for which it is paid, exceeds the

amount which would have been agreed upon by the payer and the beneficial owner

in the absence of such relationship, the provisions of this Article shall apply only

to the last-mentioned amount. In such case, the excess part of the payments shall

remain taxable according to the laws of each Contracting State, due regard being

had to the other provisions of this Agreement.

Article 12

ROYALTIES

1. Royalties arising in a Contracting State and paid to a resident of the

other Contracting State may be taxed in that other Contracting State.

2. However, such royalties may also be taxed in the Contracting State in

which they arise and according to the laws of that State, but if the recipient is the

beneficial owner of such royalties the tax so charged shall not exceed

(a)

5 per cent of the gross amount of the royalties if they are paid as

consideration 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;

(b) 10 per cent of the gross amount of the royalties if they are paid as

consideration for the use of, or the right to use, a trade mark or for

information concerning commercial experience;

(c)

15 per cent of the gross amount of the royalties in all other cases.

3. The term "royalties" as used in this Article means payments of any kind

received as a consideration for the use of, or the right to use, any copyright of

literary, artistic or scientific work including cinematograph films, or films or tapes

used for radio or television broadcasting, any patent, trade mark, design or model,

plan, secret formula or process or for information concerning industrial,

commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the royalties, being a resident of a Contracting State, carries on business

in the other Contracting State in which the royalties arise through a permanent

establishment situated therein, or performs in that other Contracting State

independent personal services from a fixed base situated therein, and the right or

property in respect of which the royalties are paid is effectively connected with

such permanent establishment or fixed base. In such case the provisions of Article

7 or Article 15, as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer

is that State itself, a local authority, or entity thereof, or a resident of that State.

Where, however, the person paying the royalties, whether he is a resident of a

Contracting State or not, has in a Contracting State a permanent establishment or

fixed base in connection with which the liability to pay the royalties was incurred,

and such royalties are borne by such permanent establishment or fixed base, then

such royalties shall be deemed to arise in the State in which the permanent

establishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of

the royalties, having regard to the use, right or information for which they are paid,

exceeds the amount which would have been agreed upon by the payer and the

beneficial owner in the absence of such relationship, the provisions of this Article

shall apply only to the last-mentioned amount. In such case, the excess part of the

payments shall remain taxable according to the laws of each Contracting State, due

regard being had to the other provisions of this Agreement.

Article 13

TECHNICAL FEES

1. Technical fees arising in a Contracting State and paid to a resident of the

other Contracting State may be taxed in that other Contracting State.

2. However, such technical fees may also be taxed in the Contracting State

in which they arise and according to the laws of that State, but if the beneficial

owner of the technical fees is a resident of the other Contracting State, the tax so

charged shall not exceed 7.5 per cent of the gross amounts of the technical fees.

3. The term "technical fees" as used in this Article means payments of any

kind to any person, other than to an employee of the person making the payments,

in consideration for any services of a technical, managerial or consultancy nature.

4. The provisions of paragraphs 1 and 2 of this Article shall not apply if

the beneficial owner of the technical fees, being a resident of a Contracting State,

carries on business in the other Contracting State in which the technical fees arise

through a permanent establishment situated therein, or performs in that other

Contracting State independent personal services through a fixed base, and the

technical fees paid are effectively connected with such permanent establishment or

fixed base. In such case the provisions of Article 7 or Article 15, as the case may

be, shall apply.

5. Technical fees shall be deemed to arise in a Contracting State when the

payer is that State itself, a local authority or entity thereof, or a resident of that

State. Where, however, the person paying the technical fees, whether he is a

resident of a Contracting State or not, has in a Contracting State a permanent

establishment or a fixed base in connection with which the liability to pay the

technical fees was incurred, and such technical fees are borne by that permanent

establishment or fixed base, then such technical fees shall be deemed to arise in the

State in which the permanent establishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of

the technical fees paid exceeds, for whatever reason, the amount which would have

been agreed upon by the payer and the beneficial owner in the absence of such

relationship, the provisions of this Article shall apply only to the last-mentioned

amount. In such case, the excess part of the payments shall remain taxable

according to the laws of each Contracting State, due regard being had to the other

provisions of this Agreement.

Article 14

GAINS FROM THE ALIENATION OF PROPERTY

1. Gains derived by a resident of a Contracting State from the alienation of

immovable property referred to in Article 6 and situated in the other Contracting

State may be taxed in that other State.

2. Gains from the alienation of 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 of 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,

including such gains from the alienation of such a permanent establishment (alone

or with the whole enterprise) or of such fixed base, may be taxed in that other

State.

3. Gains derived by an enterprise of a Contracting State from the

alienation of ships or aircraft operated in international traffic, or from movable

property pertaining to the operation of such ships or aircraft, shall be taxable only

in that State.

4. Gains derived by a resident of a Contracting State from the alienation of

shares of the capital stock of a company, or of an interest in a partnership, trust or

estate deriving more than 50 per cent of their value directly or indirectly from

immovable property situated in the other Contracting State may be taxed in that

other State.

5. Gains from the alienation of shares other than those mentioned in

paragraph 4 in a company which is a resident of a Contracting State may be taxed

in that State if the alienator, at any time during the twelve month period preceding

such alienation, held directly or indirectly at least 15 per cent of the capital of that

company.

6. Gains from the alienation of any property other than that referred to in

paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which

the alienator is a resident.

Article 15

INDEPENDENT PERSONAL SERVICES

1. Income derived by an individual who is a resident of a Contracting State

in respect of professional services or other activities of an independent character

shall be taxable only in that State except in the following circumstances, when

such income may also be taxed in the other Contracting State

(a)

If he has a fixed base regularly available to him in the other

Contracting State for the purpose of performing his activities; in that case,

only so much of the income as is attributable to that fixed base may be taxed

in that other Contracting State; or

(b)

If his stay in the other Contracting State is for a period or periods

amounting to or exceeding in the aggregate 183 days within any twelve-

month period commencing or ending in the fiscal year concerned; in that

case, only so much of the income as is derived from his activities performed

in that other Contracting State may be taxed in that other Contracting State.

2. The term "professional services" includes especially independent

scientific, literary, artistic, educational or teaching activities as well as the

independent activities of physicians, lawyers, engineers, architects, dentists and

accountants.

Article 16

DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 17, 19, 20 and 21, salaries, wages

and other similar remuneration derived by a resident of a Contracting State in

respect of an employment shall be taxable only in that State unless the employment

is exercised in the other Contracting State. If the employment is so exercised, such

remuneration as is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by

a resident of a Contracting State in respect of an employment exercised in the other

Contracting State shall be taxable only in the first-mentioned State if

(a)

the recipient is present in the other State for a period or periods

not exceeding in the aggregate 183 days in any twelve-month period

commencing or ending in the fiscal year concerned, and

(b) the remuneration is paid by, or on behalf of, an employer who is

not a resident of the other State, and

(c)

the remuneration is not borne by a permanent establishment or a

fixed base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft operated in

international traffic by an enterprise of a Contracting State may be taxed in that

State.

Article 17

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.

Article 18

ENTERTAINERS AND SPORTSMEN

1. Notwithstanding the provisions of Articles 15 and 16, 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, 15 and 16 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.

Article 19

PENSIONS AND SOCIAL SECURITY PAYMENTS

1. Subject to the provisions of paragraph 2 of Article 20, 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.

2. Notwithstanding the provisions of paragraph 1, pensions paid and other

payments made under a public welfare scheme organised by the government of a

Contracting State which is part of the social security system of that State shall be

taxable only in that State.

Article 20

GOVERNMENT SERVICE

1. (a)

Salaries, wages and other similar remuneration, other than a

pension, paid by a Contracting State or a local authority thereof to an individual in

respect of services rendered to that State or authority 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 local authority thereof to an individual in respect of services rendered to

that State or authority 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 16, 17, 18 and 19 shall apply to salaries,

wages and other similar remuneration and pensions in respect of services rendered

in connection with a business carried on by a Contracting State or a local authority

thereof.

Article 21

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 first-mentioned State, provided that such

payments arise from sources outside that State.

2. Notwithstanding the provisions of Articles 15 and 16, remuneration for

services rendered by a student or a business apprentice in a Contracting State shall

not be taxed in that State up to the sum of 10,000 USD or equivalent in the

currency of that State in a fiscal year.

Article 22

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 15, as the case may be, shall apply.

Article 23

METHODS FOR ELIMINATION OF DOUBLE TAXATION

1. In the case of Viet Nam, double taxation shall be eliminated as follows

(a)

Where a resident of Viet Nam derives income which, in

accordance with the provisions of this Agreement, may be taxed in Malta

whether directly or by deduction, Viet Nam shall allow as a deduction from

the tax on the income of that resident an amount equal to the income tax paid

in Malta.

The amount of the tax to be deducted pursuant to the above provision

shall not exceed the lesser of the tax which would have been charged on the

same income in Viet Nam under the rates applicable therein.

(b) Where a resident of Viet Nam derives income which in

accordance with the provisions of this Agreement, shall be taxable only in

Malta, Viet Nam may include this income in the tax base but only for

purposes of determining the rate of tax on such other income as is taxable in

Viet Nam.

2. In the case of Malta, double taxation shall be eliminated as follows

Subject to the provisions of the law of Malta regarding the

allowance of a credit against Malta tax in respect of foreign tax, where, in

accordance with the provisions of this Agreement, there is included in a

Malta assessment income from sources within Viet Nam, the Vietnamese tax

on such income shall be allowed as a credit against the relative Malta tax

payable thereon.

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, paragraph 6 of Article 12 or paragraph 6 of Article 13, apply, interest,

royalties, technical fees 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.

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 covered in

this Agreement.

Article 25

MUTUAL AGREEMENT PROCEDURE

1. Where a person who is a resident of a Contracting State 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 that person 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 for the purpose of reaching an agreement in the sense of

the preceding paragraphs.

Article 26

EXCHANGE OF INFORMATION

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 of every kind and description imposed on behalf of the

Contracting State or local authorities, insofar as the taxation thereunder is not

contrary to the Agreement. The exchange of information is not restricted by

Articles 1 and 2.

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, 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.

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 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.

Article 28

ENTRY INTO FORCE

1. Each of the Contracting States shall notify to the other in writing

through diplomatic channels 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 receipt of the later of these notifications.

2. This Agreement shall have effect

(a)

in Viet Nam

(i) in respect of taxes withheld at source, in relation to taxable

amounts as derived on or after the first day of January following the

calendar year in which the Agreement enters into force, and in

subsequent calendar years; and

(ii) in respect of other Vietnamese taxes, in relation to income,

profits or gains arising on or after the first day of January following the

calendar year in which the Agreement enters into force, and in

subsequent calendar years; and

(b)

in Malta

in respect of taxes on income derived during any calendar year or

accounting period, as the case may be, beginning on or after the first day of

January immediately following the date on which the Agreement enters into

force.

Article 29

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)

in Viet Nam

(i) in respect of taxes withheld at source, in relation to taxable

amounts as derived on or after the first day of January following the

calendar year in which the notice of termination has been received, and

in subsequent calendar years; and

(ii)

in respect of other Vietnamese taxes, in relation to

income, profits or gains arising on or after the first day of January

following the calendar year in which the notice of termination has been

received, and in subsequent calendar years; and

(b)

in Malta

in respect of taxes on income derived during any calendar year or

accounting period, as the case may be, beginning on or after the first day of

January immediately following the date on which the notice is given.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto

by their respective Governments, have signed this Agreement.

DONE in duplicate at Ulaanbaatar this 15 th day of July of the year two

thousand and sixteen in the Vietnamese and English languages, both texts being

equally authentic.

George W. Vella

Pham Binh Minh

For the Government of

For the Government of

the Republic of Malta

the Socialist Republic of Viet Nam

€2.16