- 1
- In Vietnam double taxation shall be eliminated as follows:
- Where a resident of Vietnam derives income, profits or gains which under the law of the Netherlands and in accordance with this Agreement may be taxed in the Netherlands, Vietnam shall allow as a credit against its tax on the income, profits or gains an amount equal to the amount paid in the Netherlands. The amount of credit, however, shall not exceed the amount of Vietnamese tax on that income, profits or gains computed in accordance with the taxation laws and regulations of Vietnam.
- 2
- In the Netherlands double taxation shall be eliminated as follows:
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- a)The Netherlands, when imposing tax on its residents, may include in the basis upon which such taxes are imposed the items of income which, according to the provisions of this Agreement, may be taxed in Vietnam;
- b)However, where a resident of the Netherlands derives items of income which according to Article 6, Article 7, paragraph 6 of Article 10, paragraph 6 of Article 11, paragraph 5 of Article 12, paragraphs 1 and 2 of Article 13, Article 14, paragraphs 1 and 3 of Article 15, paragraphs 1 (subparagraph a), 2 (subparagraph a) and 4 of Article 19 and paragraph 2 of Article 22 of this Agreement may be taxed in Vietnam and are included in the basis referred to in subparagraph (a), the Netherlands shall exempt such items of income by allowing a reduction of its tax. This reduction shall be computed in conformity with the provisions of Netherlands law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the total amount of the items of income which are exempt from Netherlands tax under those provisions;
- c)Further, the Netherlands shall allow a deduction from the Netherlands tax so computed for the items of income which according to paragraph 2 of Article 10, paragraph 2 of Article 11, paragraph 2 of Article 12, paragraphs 4 and 6 of Article 13, Article 16, Article 17 and paragraph 2 of Article 18 of this Agreement may be taxed in Vietnam to the extent that these items are included in the basis referred to in subparagraph (a). The amount of this deduction shall be equal to the tax paid in Vietnam on these items of income, but shall not exceed the amount of the reduction which would be allowed if the items of income so included were the sole items of income which are exempt from Netherlands tax under the provisions of Netherlands law for the avoidance of double taxation;
- d)Where, by reason of the relief given under the provisions of Vietnamese laws for the purpose of encouraging investment in Vietnam, or by the relief given under the Agreement, the Vietnamese tax actually levied on interest arising in Vietnam or on royalties arising in Vietnam is lower than 10 per cent, then the amount of the tax paid in Vietnam on such interest and royalties shall be deemed to have been paid at the rate of 10 per cent. However, if the general tax rates under Vietnamese laws applicable to the afore-mentioned interest and royalties are reduced below those mentioned in this subparagraph, these lower rates shall apply for the purposes of this subparagraph. The provisions of this subparagraph shall only apply for a period of ten years after the date on which the Convention entered into force. This period may be extended by mutual agreement between the competent authorities.
