Aug 2009 The comprehensive avoidance of double taxation agreement between Hong Kong and Vietnam ("HK/Vietnam DTA") has finally come into effect on 12 August 2009. The HK/Vietnam DTA will apply with effect in Hong Kong for any year of assessment beginning on or after 1 April 2010 and in Vietnam from 1 January 2010.
As far as employment income is concerned, Hong Kong employees will be exempt from Vietnamese personal income tax (and vice versa) provided that: (1) they do not spend more than 183 days in Vietnam in any 12-month period commencing or ending in the fiscal year concerned; (2) their remuneration is not paid by, or on behalf of, an employer who is a resident of Vietnam; and (3) the remuneration is not borne by a permanent establishment in Vietnam.
Similar to the other DTAs that Hong Kong has entered into so far, the Exchange of Information ("EoI") article included in the HK/Vietnam DTA is the more restrictive 1995 version of the Organisation for Economic Cooperation and Development ("OECD") model convention.
This is the fifth comprehensive DTA that Hong Kong entered into with other jurisdictions so far - the others being the Mainland China, Belgium, Thailand and Luxemburg.
