The Double Taxation Relief (Taxes on Income) (Vietnam) Order 1994

His Excellency Mr Ho Te

Minister of Finance

8 Phan Huy Chu

Hanoi

9th April 1994

Excellency,

In am in receipt of your Note dated 9th April which states as follows:

“I have the honour to refer to the Agreement between the Government of the Socialist Republic of Vietnam and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains which has been signed today and to propose on behalf of the Government of the Socialist Republic of Vietnam:

in relation to Article 12

If, before or after the entry into force of this Agreement, Vietnam concludes an Agreement for the avoidance of double taxation with any other member State of the Organisation for Economic Cooperation and Development and, under the provisions of that Agreement Vietnam may tax royalties arising in Vietnam and paid to a resident of that State but the tax charged is not to exceed a lower percentage of the gross royalties than that specified in paragraph (2) of Article 12, then:

• where that lower percentage applies, subject to the same exceptions as are provided in Article 12, to income of the same description as that to which paragraph (2) of Article 12 applies, the lower percentage shall be substituted for that specified in paragraph (2) of Article 12 with effect from the date of entry into force of that Agreement or of this Agreement, whichever is the later;

in relation to Article 22

If, before or after the entry into force of this Agreement, Vietnam introduces a withholding tax on dividends or interest that the United Kingdom competent authority will undertake that a provision to promote economic development in Vietnam which grants an exemption from or reduction of that Vietnamese tax will fall to be considered as of a substantially similar character within the meaning of paragraph (4)(b) of Article 22;

in relation to Article 23

For so long as Vietnam continues to grant to investors licences under the Law on Foreign Investment in Vietnam, which specify the taxation to which the investor shall be subject, the imposition of such taxation shall not be regarded as breaching the terms of paragraph (2) of Article 23.”

The foregoing proposals being acceptable to the Government of the United Kingdom of Great Britain and Northern Ireland, I have the honour to confirm that Your Excellency’s Note and this Reply shall be regarded as constituting an agreement between the two Governments in this matter which shall enter into force at the same time as the entry into force of the Agreement.

I take this opportunity to renew to Your Excellency the assurances of my highest consideration.

For the Government of the United Kingdom of Great Britain and Northern Ireland

Alastair Goodlad

Minister of State for Foreign and Commonwealth Affairs