Status of US-Vietnam Tax Treaty

Around eighty countries have tax treaties with Vietnam, which protects businesses and citizens from those countries from double taxation. The United States is Vietnam’s only major trading partner that does not. An initial agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (Double Tax Treaty or “DTT”) between the U.S. and Vietnam was signed in 2015 and ratified by Vietnam in 2017. The U.S. is working to renegotiate parts of the agreement which became out of compliance with U.S. tax law changes in 2020. Members are invited to join our virtual meeting with U.S. Treasury Department tax policy experts to discuss the status of negotiations and next steps in this process.

Why it matters:

Vietnam recently implemented new rules under provisions of Circular No. 80/2021/TT, which may lead to double taxation for U.S. tax residents and companies due to the absence of a treaty in-force between Vietnam and the United States. If not temporarily waved, Circular 80 could extremely disadvantage U.S. citizens and U.S. companies, subjecting them to double taxation.

AmCham has urged both governments to complete the DTT negotiations quickly. Knowing that ratification is an additional step for both sides, in the interim period, we have asked for a “stand still” on Circular 80 by requesting that the Government of Vietnam not impose double tax on U.S. companies and citizens while negotiations and ratification continues.

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