INTERNATIONAL TAX AGREEMENTS ACT 1953
(Repealed by No 45 of 2011)
Sch 38A repealed by No 45 of 2011, s 3 and Sch 1 item 67, to remove the text of the Vietnamese Agreement - Exchange of Notes from this Act, effective 27 June 2011. For transitional provisions see note under s 3(1) . Sch 38A formerly read:
SCHEDULE 38A - Vietnamese Agreement - Exchange of NotesEXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM AMENDING THE AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
Paragraph 4 shall be deleted and replaced with the following:
In paragraph 3, the term " Vietnamese tax forgone " means, subject to paragraphs 5 and 6, the total amount which, under the law of Vietnam relating to Vietnamese tax and in accordance with this Agreement, would have been payable as Vietnamese tax on income but for an exemption from, or reduction of, Vietnamese tax on that income (which total amount shall be deemed to be no greater than 20 per cent of the Vietnamese taxable income that relates to the income the subject of the exemption or reduction), less the actual amount of Vietnamese tax payable on that income. "
Paragraph 5 shall be deleted and replaced with the following:
Paragraph 4 shall apply only in respect of exemptions or reductions resulting from the operation of:
(i) Articles 26, 27, 28 or 32 of the Law on Foreign Investment in Vietnam 1987; or
(ii) Articles 66, 67, 68, 69 or 72 of Decree No. 18-CP on implementing regulations of the Law on Foreign Investment in Vietnam dated 16 April 1993; or
(iii) Circular No. 48-TC-TCT on Profits Tax Rates and Exemption from and Reduction of Profits Tax dated 30 June 1993; or
(iv) Part A of Part II of Circular No. 51-TC-TCT on Taxation of Foreign Investment in Vietnam dated 3 July 1993; orto the extent those provisions were in force on, and have not been modified since, the date of this Note, or have been modified only in minor respects so as not to affect their general character; or
(v) Decree No. 87-CP on Build-Operate-Transfer (BOT) Contracts dated 23 November 1993 and the regulations issued with that Decree,
(b) any other provision which may subsequently be made granting an exemption from, or reduction of, Vietnamese tax which the Treasurer of Australia and the Minister of Finance of Vietnam determine from time to time in letters exchanged for this purpose to be provisions to which this paragraph applies. Subject to its terms, such a determination of applicable provisions shall be valid for as long as those provisions are not modified after the date of that determination or have been modified only in minor respects so as not to affect their general character. "
The following paragraphs shall be inserted after paragraph 5:
Paragraph 4 shall apply only to the extent that the exemption or reduction is granted in respect of Vietnamese tax on income from the following activities:
(a) construction of infrastructure facilities including communications, power production and supply, construction of infrastructure facilities for the export processing and industry intensive zones and information and telecommunication facilities in mountainous areas in which naturally and socio economically difficult conditions exist; or
(b) plantation of new forests for commercial exploitation; or
(c) extremely important activities listed in the investment portfolio announced by the Vietnamese State Committee for Co-operation and Investment for each period; or
(d) exploitation of natural resources except oil, gas or rare and precious natural resources; or
(e) heavy industry projects including metallurgy, mechanical engineering production, base chemical production, cement production, electrical and electronic materials manufacturing, fertiliser manufacturing and anti epidemic medicines for use in animal production or forestry; or
(f) plantation of long term industrial crops; or
(g) activities in mountainous areas in which naturally and socio economically difficult conditions exist including hotel undertaking projects; or
(h) any project satisfying at least 2 of the following criteria:
(i) employing at least 500 Vietnamese; or
(ii) applying advanced technology which satisfies the requirements listed in Article 4 of the Ordinance on the Transfer of Foreign Technology dated 5 December 1988, subject to the approval of the Ministry of Science and Technology and Environment; or
(iii) exporting at least 80% of the products manufactured by the project itself; or
(iv) the prescribed capital or contributed capital for the implementation of the business co-operation contract is at least US $10 million dollars; or
(j) projects carrying out infrastructure activities within a definite time period in which the foreign partner transfers the infrastructure to the Vietnamese Government without any compensation.
Notwithstanding the operation of paragraph 4, Vietnamese tax forgone shall not be deemed to have been paid in respect of income derived from:
(a) banking, insurance, consulting, accounting, auditing and commercial services of any kind; or
(b) the operation of ships or aircraft, other than ships or aircraft operated principally from places in Vietnam and used solely in carrying on a business in Vietnam; or
(c) any scheme entered into by an Australian resident with the purpose of using Vietnam as a conduit for income or as a location of property in order to evade or avoid Australian tax through the exploitation of the Australian foreign tax credit provisions or to confer a benefit on a person who is neither a resident of Australia, nor of Vietnam.
Paragraphs 4, 5, 6 and 7 shall not apply in relation to income derived in any year of income after the year of income that ends on:
(a) 30 June 2003; or
(b) any later date that may be agreed by the Treasurer of Australia and the Minister of Finance of Vietnam in letters exchanged for this purpose,
whichever is the later in time occurring. "
Paragraph 6 shall be renumbered as paragraph 9.
If the foregoing is acceptable to the Government of the Socialist Republic of Vietnam, the Department has the honour to propose that this Note and the Embassy ' s confirmatory Note in reply shall constitute an Agreement between the Government of Australia and the Government of the Socialist Republic of Vietnam to amend the Head Agreement. The amendment to the Head Agreement shall enter into force when the two Governments have notified each other by a further exchange of notes that they have completed their domestic requirements for the entry into force of such amendment. The amendment to the Head Agreement shall have effect in respect of Australian tax in relation to income, profits or gains of the year of income that began on 1 July 1993 and of subsequent years of income.
The Department of Foreign Affairs and Trade avails itself of this opportunity to renew to the Embassy of the Socialist Republic of Vietnam the assurances of its highest consideration.
22 November 1996
Note in Reply
The Embassy of the Socialist Republic of Vietnam presents its compliments to the Department of Foreign Affairs and Trade and has the honour to refer to the Department ' s Note No ALA 96/568 of 22 November 1996 which reads as follows:
" [ Text of Note No ALA 96/568 of 22 November 1996 of the Department of Foreign Affairs and Trade of the Government of Australia .] "
The Embassy has the honour to advise that the Department ' s proposal is acceptable to the Government of the Socialist Republic of Vietnam and that accordingly the Agreement between the Government of Australia and the Government of the Socialist Republic of Vietnam for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, done at Hanoi on 13 April 1992, is to be regarded as amended from the date when the two Governments have notified each other by a further exchange of notes that they have completed their domestic requirements for the entry into force of such amendment. The amendment to the Head Agreement shall have effect in respect of Australian tax in relation to income, profits or gains of the year of income that began on 1 July 1993 and of subsequent years of income.
The Embassy of the Socialist Republic of Vietnam avails itself of this opportunity to renew to the Department of Foreign Affairs and Trade the assurances of its highest consideration.
22 November 1996
Sch 38A inserted by No 80 of 1997.