Australian Tax Treaties

Vietnamese Agreement  

Vietnamese Notes (No 1)  

SECTION III  

III    
The following paragraphs shall be inserted after paragraph 5:

" 6.
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.

7.
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.

8.
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. "