General Department of Taxation evaluates efficiency of Double Taxation Agreements

MoF reviews efficiency of Double Taxation Agreements

General Department of Taxation has just issued an Action Plan to review and evaluate efficiency of Double Taxation Agreements.

The action plan aims to implement the action plan of the Ministry of Finance issued together with Decision 662/QD-BTC dated May 6, 2022 following Decision 2072/QD-TTg dated December 10, 2021 of the Prime Minister on approval for the Project "Reviewing and evaluating the efficiency of Double Taxation Agreements the impact on Vietnam's tax policies and adjustment orientations”.

Since December 4, the Tax sector has focused on analyzing the foreign investment in Vietnam and from Vietnam to abroad to select partners that need to sign the tax agreement in the near future, and give priority based on the criteria of political relations, diplomacy, trade and investment relations; developed a plan to negotiate an Double Taxation Agreement for the 2021-2030 period.

Between January 2023 to December 2030, law enforcement units will actively promote negotiations with selected partner countries.

For the content of reforming the policy of negotiating the agreements with new partners, from April to December 2022, the Tax sector will focus on studying international trends on new provisions of the Tax Agreement, especially related to anti-tax agreement, anti-formulation of monetary policy, income from digital economic activities and bilateral agreement procedures, thereby proposing Vietnam's tax agreement policy for each partner, ensuring optimal efficiency when participating in tax agreement negotiations.

According to the plan, the General Department of Taxation will develop a Code of Principles for the negotiation of Double Taxation Agreements in the new context on the basis of comprehensive assessment of international trends and the economic situation of both Vietnam and partner countries, applying to each partner group signing the agreement; and building a form of an Open Tax Agreement for flexible negotiation in accordance with the specific characteristics of each Contracting Party.

From April 2022 to March 2023, the Tax sector will review all signed agreements; analyze and evaluate the provisions that are inconsistent with the new situation of each tax agreement, and propose to supplement provisions that’s have not been included in the agreement or abolish provisions that are no longer suitable in each signed agreement through negotiation and signing of the Protocol amending and supplementing the signed agreement.

The General Department of Taxation will revise internal laws due to the impact of the tax agreement; implement international commitments related to the Tax Agreement; focus on implementing of current tax agreements.

In December 2025, the General Department of Taxation will conduct a preliminary assessment of the implementation of the plan by 2025, thereby proposing to revise in line with the following period. December 2030, the Tax authorities will review and evaluate the implementation of the negotiation and signing of the Tax Agreement until 2030 and propose tasks and solutions for the next period.