case, only so much of the income as is attributable to that fixed base
may be taxed in that other Contracting State; or

(b) If his stay in the other Contracting State is for a period or periods
amounting to or exceeding in the aggregate 183 days within any
twelve-month period commencing or ending in the taxable year
concerned; in that case, only so much of the income as is derived from
his activities performed in that other Contracting State may be taxed
in that other Contracting State.

2. The term “professional services” includes especially independent
scientific, literary, artistic, educational or teaching activities as well as the
independent activities of physicians, lawyers, engineers, architects, dentists
and accountants.

ARTICLE 15
DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16 (Directors’ Fees), 18 (Pensions,
Social Security, Annuities, Alimony, and Child Support) and 20
(Government Service), salaries, wages and other similar remuneration
derived by a resident of a Contracting State in respect of an employment
shall be taxable only in that State unless the employment is exercised in the
other Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that other
Contracting State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a
resident of a Contracting State in respect of an employment exercised in
the other Contracting State shall be taxable only in the first-mentioned
Contracting State ift

a) the recipient is present in the other Contracting State for a period or
P’ P ig Pp
periods not exceeding in the aggregate 183 days in any twelve-month
period commencing or ending in the taxable year concerned,

(b) the remuneration is paid by, or on behalf of, an employer who is not a
resident of the other Contracting State, and

(c) the remuneration is not borne by a permanent establishment or a fixed
base which the employer has in the other Contracting State.

3. Notwithstanding the preceding provisions of this Article, remuneration
described in paragraph 1 that is derived in respect of an employment as a
member of the regular complement of a ship or aircraft operated by an

20



(a) with respect to taxes withheld at source on amounts paid or credited
on or after the first day of January of the year immediately following
the year in which the notice of termination has been given; and

(b) with respect to other taxes:

(i) in Viet Nam, for taxable years beginning on or after the first day
of January of the year immediately following the year in which
the notice of termination has been given;

(ii) in the United States, for taxable periods beginning on or after the
first day of January of the year immediately following the year in
which the notice of termination has been given.

IN WITNESS WHEREOF the undersigned, being duly authorized thereto by
their respective Governments, have signed this Agreement.

ts,

DONE at 1N9.T00.. in duplicate, in the English language, this ..f...... day
of .July......, 2016 A Vietnamese language text shall be prepared which shall
be considered equally authentic upon an exchange of diplomatic notes between
the Contracting States confirming its conformity with the English language text.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF THE SOCIALIST REPUBLIC OF
AMERICA VIET NAM

Lrkvinel Yoke
“ib

37



business in the other Contracting State, of which the company paying the
dividends is a resident, through a permanent establishment situated therein,
or performs in that other Contracting State independent personal services
from a fixed base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7
(Business Profits) or Article 14 (Independent Personal Services), as the
case may be, shall apply.

Where a company which is a resident of a Contracting State derives profits
or income from the other Contracting State, that other Contracting State
may not impose any tax on the dividends paid by the company, except
insofar as such dividends are paid to a resident of that other Contracting
State or insofar as the holding in respect of which the dividends are paid is
effectively connected with a permanent establishment or a fixed base
situated in that other Contracting State, nor subject the company’s
undistributed profits to a tax on the company’s undistributed profits,
except as provided in paragraph 7, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income arising in
such other Contracting State.

(a) A company that is a resident of one of the Contracting States and that
has a permanent establishment in the other State or that is subject to
tax in the other Contracting State on a net basis on its income that
may be taxed in the other Contracting State under Article 6 (Income
from Immovable Property (Real Property)) or under paragraph 1 of
Article 13 (Gains from the Alienation of Property) may be subject in
that other Contracting State to a tax in addition to the tax allowable
under the other provisions of this Agreement.

(b) Such tax, however, may be imposed:

(i) on only the portion of the business profits of the company
attributable to the permanent establishment and the portion of the
income referred to in subparagraph (a) that is subject to tax
under Article 6 (Income from Immovable Property (Real
Property)) or under paragraph 1 of Article 13 (Gains from the
Alienation of Property) that, in the case of the United States,
represents the dividend equivalent amount of such profits or
income and, in the case of Viet Nam, is an amount that is
analogous to the dividend equivalent amount; and

(ii) at a rate not in excess of the rate specified in paragraph 2(a).

14



in that Contracting State and the individual is a resident of that
Contracting State who:

(i) is a national of that Contracting State; or

(ii) did not become a resident of that Contracting State solely for the
purpose of rendering the services.

Notwithstanding the provisions of paragraph 1 of Article 18 (Pensions,
Social Security, Annuities, Alimony, and Child Support):

(a) Pensions and other similar remuneration paid by, or out of funds
created by, a Contracting State or a political subdivision or a local
authority thereof to an individual in respect of services rendered to
that Contracting State or subdivision or authority (other than a
payment to which paragraph 2 of Article 18 (Pensions, Social
Security, Annuities, Alimony, and Child Support) applies) shall,
subject to the provisions of subparagraph (b) of this paragraph, be
taxable only in that Contracting State;

(b) Such pensions or other similar remuneration, however, shall be
taxable only in the other Contracting State if the individual is a
resident of, and a national of, that other Contracting State.

The provisions of Articles 15 (Dependent Personal Services), 16
(Directors’ Fees), 17 (Entertainers and Sportsmen) and 18 (Pensions,
Social Security, Annuities, Alimony, and Child Support) shall apply to
salaries, wages, and other similar remuneration and to pensions and other
similar remuneration, in respect of services rendered in connection with a
business carried on by a Contracting State or a political subdivision or a
local authority thereof.

ARTICLE 21
STUDENTS AND APPRENTICES

Payments, other than compensation for personal services, that a student or
business apprentice who is or was immediately before visiting a
Contracting State a resident of the other Contracting State and who is
present in the first-mentioned Contracting State solely for the purpose of
his education or for his training receives for the purpose of his
maintenance, education or training shall not be taxed in that Contracting
State, provided such payments arise from sources outside that Contracting
State. The exemption from tax provided by this paragraph shall apply to a
business apprentice only for a period of time not exceeding two year(s)

24



(g) the term “national” of a Contracting State means:

(i) any individual possessing the nationality or citizenship of that
Contracting State; or

(ii) any legal person, partnership or association deriving its status as
such from the laws in force in that Contracting State;

(h) the term “international traffic” means any transport by a ship or
aircraft operated by an enterprise of a Contracting State, except when
such transport is solely between places in the other Contracting State;

(i) the term “competent authority” means:

(i) in Viet Nam, the Minister of Finance or his authorized
representative;

(ii) in the United States, the Secretary of the Treasury or his
delegate; and

(j) the term “pension fund” means any person established in a
Contracting State that is:

(i) generally exempt from income taxation in that Contracting State;
and

(ii) substantially all of the activity of which is either:
(A) to administer or provide pension or retirement benefits; or

(B) to earn income for the benefit of one or more persons
established in the same Contracting State that are generally
exempt from income taxation in that Contracting State and
substantially all of the activity of which is to administer or
provide pension or retirement benefits.

As regards the application of the Agreement at any time by a Contracting
State, any term not defined therein shall, unless the context otherwise
requires, or the competent authorities agree to a common meaning pursuant
to the provisions of Article 26 (Mutual Agreement Procedure), have the
meaning that it has at that time under the law of that State for the purposes
of the taxes to which the Agreement applies, any meaning under the
applicable tax laws of that State prevailing over a meaning given to the
term under other laws of that Contracting State.



If information is requested by a Contracting State in accordance with this
Article, the other Contracting State shall use its information gathering
measures to obtain the requested information, even though that other
Contracting State may not need such information for its own tax purposes.
The obligation contained in the preceding sentence is subject to the
limitations of paragraph 3 but in no case shall such limitations be construed
to permit a Contracting State to decline to supply information solely because
it has no domestic interest in such information.

In no case shall the provisions of paragraph 3 be construed to permit a
Contracting State to decline to supply information requested by the other
Contracting State because the information is held by a bank, other financial
institution, nominee or person acting in an agency or a fiduciary capacity
or because it relates to ownership interest in a person.

If specifically requested by the competent authority of a Contracting State,
the competent authority of the other Contracting State shall provide
information under this Article in the form of depositions and authenticated
copies of unedited original documents (including books, papers,
statements, records, accounts, and writings), to the extent such depositions
and documents can be obtained under the laws and administrative practice
of such other Contracting State with respect to its own taxes.

Each of the Contracting States shall endeavor to collect on behalf of the
other Contracting State such amounts as may be necessary to ensure that
relief granted by the Agreement from taxation imposed by that other
Contracting State does not inure to the benefit of persons not entitled
thereto. This paragraph shall not impose upon either of the Contracting
States the obligation to carry out administrative measures that would be
contrary to its sovereignty, security, or public policy.

ARTICLE 28
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall affect the fiscal privileges of members of
diplomatic missions or consular posts under the general rules of international
law or under the provisions of special agreements.

ARTICLE 29
ENTRY INTO FORCE

This Agreement shall be subject to ratification or approval in accordance

35



enterprise of a Contracting State in international traffic shall be taxable only
in that Contracting State.

ARTICLE 16
DIRECTORS’ FEES

Directors’ fees and other similar payments derived by a resident of a
Contracting State in his capacity as a member of the board of directors of a
company that is a resident.of the other Contracting State may be taxed in that
other Contracting State.

ARTICLE 17
ENTERTAINERS AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 (Independent Personal
Services) and 15 (Dependent Personal Services), income derived by a
resident of a Contracting State as an entertainer, such as a theater, motion
picture, radio or television artiste, or a musician, or as a sportsman, from
his personal activities as such exercised in the other Contracting State, may
be taxed in that other Contracting State, except where the amount of the
gross receipts derived by such entertainer or sportsman, including expenses
reimbursed to him or borne on his behalf, from such activities does not
exceed five thousand United States dollars ($5,000) or its equivalent in
Viet Nam Dong for the taxable year of the payment.

2. Where income in respect of personal activities exercised by an entertainer
or a sportsman in his capacity as such accrues not to the entertainer or
sportsman himself but to another person, that income may, notwithstanding
the provisions of Articles 14 (Independent Personal Services) and 15
(Dependent Personal Services), be taxed in the Contracting State in which
the activities of the entertainer or sportsman are exercised unless that other
person or the entertainer or sportsman establishes that neither the
entertainer or sportsman nor any person related thereto participate directly
or indirectly in the receipts or profits of that other person in any manner,
including the receipt of deferred remuneration, bonuses, fees, dividends,
partnership distributions, or other distributions.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derived by
entertainers or sportsmen who are residents of a Contracting State from
activities in the other Contracting State under a plan of cultural exchange

21



(e)

3. (a)

(b)

(A) of clause (ii) of subparagraph (j) of paragraph | of Article 3
(General Definitions), more than 50 percent of the person's
beneficiaries, members or participants are individuals resident in
either Contracting State; or

a person other than an individual, if:

(i) on at least half the days of the taxable year, persons who are
residents of that Contracting State and that are entitled to the
benefits of this Agreement under subparagraph (a),
subparagraph (b), clause (i) of subparagraph (c), or subparagraph
(d) of this paragraph own, directly or indirectly, shares or other
beneficial interests representing at least 50 percent of the
aggregate voting power and value (and at least 50 percent of any
disproportionate class of shares) of the person, provided that, in
the case of indirect ownership, each intermediate owner is a
resident of that Contracting State, and

(ii) less than 50 percent of the person’s gross income for the taxable
year, as determined in the person's Contracting State of
residence, is paid or accrued, directly or indirectly, to persons
who are not residents of either Contracting State entitled to the
benefits of this Agreement under subparagraph (a),
subparagraph (b), clause (i) of subparagraph (c), or
subparagraph (d) of this paragraph in the form of payments that
are deductible for purposes of the taxes covered by this
Agreement in the person’s Contracting State of residence (but
not including arm's length payments in the ordinary course of
business for services or tangible property).

A resident of a Contracting State shall be entitled to benefits of the
Agreement with respect to an item of income derived from the other
Contracting State, regardless of whether the resident is a qualified
person, if the resident is engaged in the active conduct of a trade or
business in the first-mentioned Contracting State (other than the
business of making or managing investments for the resident’s own
account, unless these activities are banking, insurance or securities
activities carried on by a bank, insurance company or registered
securities dealer), and the income derived from the. other Contracting
State is derived in connection with, or is incidental to, that trade or
business.

If a resident of a Contracting State derives an item of income from a
trade or business activity conducted by that resident in the other
Contracting State, or derives an item of income arising in the other

27



1.

Contracting State to a resident of the other Contracting State, shall be
exempt from tax in both Contracting States.

ARTICLE 19
PENSION FUNDS

Where an individual who is a resident of a Contracting State is a member
or beneficiary of, or participant in, a pension fund established in the other
Contracting State, income earned by the pension fund may be taxed as
income of that individual only when, and, subject to paragraph 1 of
Article 18 (Pensions, Social Security, Annuities, Alimony, and Child
Support) of this Agreement, to the extent that, it is paid to, or for the
benefit of, that individual from the pension fund (and not transferred to
another pension fund in that other Contracting State in a transfer that
qualifies as a tax-deferred transfer under the laws of that other Contracting
State).

Where a citizen of the United States who is a resident of Viet Nam is a
member or beneficiary of, or participant in, a pension fund established in
Viet Nam, the United States may tax the income earned by the pension
fund only when, and, subject to paragraph 1 of Article 18 (Pensions, Social
Security, Annuities, Alimony, and Child Support) of this Agreement, to the
extent that, it is paid to, or for the benefit of, that individual from the
pension fund (and not transferred to another pension fund in Viet Nam ina
transfer that qualifies as a tax-deferred transfer as may apply under the
laws of Viet Nam).

ARTICLE 20
GOVERNMENT SERVICE

Notwithstanding the provisions of Articles 14 (Independent Personal
Services), 15 (Dependent Personal Services), 16 (Directors’ Fees), 17
(Entertainers and Sportsmen), and 21 (Students and Apprentices):

(a) Salaries, wages and other similar remuneration, other than a pension,
paid by a Contracting State or a political subdivision or a local
authority thereof to an individual in respect of services rendered to
that Contracting State or subdivision or authority shall be taxable only
in that Contracting State;

(b) However, such salaries, wages and other similar remuneration shall be
taxable only in the other Contracting State if the services are rendered

23



with the applicable procedures of Viet Nam and the United States. The
Contracting States shall notify each other in writing, through diplomatic
channels, when their respective applicable procedures have been satisfied.

The Agreement shall enter into force on the date of the later of the
notifications referred to in paragraph | of this Article. The provisions of
this Agreement shall have effect: :

(a) with respect to taxes withheld at source on amounts paid or credited
on or after the first day of January of the year immediately following
the year in which this Agreement enters into force; and

(b) with respect to other taxes:

(i) in Viet Nam, for taxable years beginning on or after the first day
of January of the year immediately following the year in which
this Agreement enters into force;

(ii) in the United States, for taxable periods beginning on or after the
first day of January of the year immediately following the year in
which this Agreement enters into force.

Notwithstanding paragraph 2 of this Article, the provisions of Article 27
(Exchange of Information and Administrative Assistance) shall have effect
from the date of entry into force of this Agreement, without regard to:

(i) in Viet Nam, the taxable year to which the matter relates;

(ii) in the United States, the taxable period to which the matter
relates.

ARTICLE 30
TERMINATION

This Agreement shall remain in force for a period of at least five years
from the date of its entry into force, and shall continue in force thereafter
indefinitely unless terminated in accordance with paragraph 2.

Either Contracting State may terminate this Agreement by giving to the
other Contracting State, through diplomatic channels, a written notice of
termination not later than the thirtieth day of June of any calendar year
following the conclusion of the initial five-year period. In such event, this
Agreement shall terminate on the date of the written notification.
Notwithstanding such termination, this Agreement shall cease to have
effect:

36



television broadcasting), any patent, trademark, design or model,
plan, secret formula or process.

The provisions of paragraphs 1 and 2 shall not apply if the beneficial
owner of the royalties, being a resident of a Contracting State, carries on
business in the other Contracting State in which the royalties arise, through
a permanent establishment situated therein, or performs in that other
Contracting State independent personal services from a fixed base situated
therein, and the right or property in respect of which the royalties are paid
is effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 (Business Profits) or Article 14
(Independent Personal Services), as the case may be, shall apply.

Royalties shall be deemed to arise in a Contracting State when the payer is
that Contracting State itself, a political subdivision or entity thereof, a local
authority or a resident of that Contracting State. Where, however, the
person paying the royalties, whether he is a resident of a Contracting State
or not, has in a Contracting State a permanent establishment or fixed base
in connection with which the liability to pay the royalties was incurred, and
such royalties are borne by such permanent establishment or fixed base,
then such royalties shall be deemed to arise in the Contracting State in
which the permanent establishment or fixed base is situated.

Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the
amount of the royalties, having regard to the use, right or information for
which they are paid, exceeds the amount which would have been agreed
upon by the payer and the beneficial owner in the absence of such
relationship, the provisions of this Article shall apply only to the last-
mentioned amount. In such case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State, due regard
being had to the other provisions of this Agreement.

ARTICLE 13
GAINS FROM THE ALIENATION OF PROPERTY

Gains derived by a resident of a Contracting State from the alienation of
immovable property (real property) referred to in Article 6 (Income from
Immovable Property (Real Property)) and situated in the other Contracting
State may be taxed in that other Contracting State.

18



The provisions of paragraphs 1 and 3 shall also apply to the income from
immovable property (real property) of an enterprise and to income from
immovable property (real property) used for the performance of
independent personal services.

ARTICLE 7
BUSINESS PROFITS

The profits of an enterprise of a Contracting State shall be taxable only in
that Contracting State unless the enterprise carries on business in the other
Contracting State through a permanent establishment situated therein. If
the enterprise carries on business as aforesaid, the profits of the enterprise
may be taxed in the other Contracting State but only so much of them as
are attributable to that permanent establishment.

Subject to the provisions of paragraph 3, where an enterprise of a
Contracting State carries on business in the other Contracting State
through a permanent establishment situated therein, there shall in each
Contracting State be attributed to that permanent establishment the profits
that it might be expected to make if it were a distinct and separate
enterprise engaged in the same or similar activities under the same or
similar conditions and dealing wholly independently with the enterprise of
which it is a permanent establishment.

In determining the profits of a permanent establishment, there shall be
allowed as deductions expenses that are incurred for the purposes of the
business of the permanent establishment, including executive and general
administrative expenses so incurred, whether in the Contracting State in
which the permanent establishment is situated or elsewhere.

Insofar as it has been customary in a Contracting State to determine the
profits to be attributed to a permanent establishment on the basis of an
apportionment of the total profits of the enterprise to its various parts,
nothing in paragraph 2 shall preclude such Contracting State from
determining the profits to be taxed by such an apportionment as may be
customary; the method of apportionment adopted shall, however, be such
that the result shall be in accordance with the principles contained in this
Article.

For the purposes of the preceding paragraphs, the profits to be attributed to
the permanent establishment shall be determined by the same method year
by year unless there is good and sufficient reason to the contrary.

10



Nothing in this Article shall be construed as preventing either Contracting
State from imposing a tax as described in paragraph 7 of Article 10
(Dividends) and paragraph 9 of Article 11 (Interest).

The provisions of this Article shall, notwithstanding the provisions of
Article 2 (Taxes Covered), apply to taxes of every kind and description
imposed by a Contracting State or a political subdivision or local authority
thereof.

ARTICLE 26
MUTUAL AGREEMENT PROCEDURE

Where a person considers that the actions of one or both of the Contracting
States result or will result for such person in taxation not in accordance
with the provisions of this Agreement, such person may, irrespective of the
remedies provided by the domestic law of those Contracting States, and the
time limits prescribed in such laws for presenting claims for refunds,
present its case to the competent authority of the Contracting State of
which that person is a resident or, if his case comes under paragraph 1 of
Article 25 (Non-Discrimination), to the competent authority of the
Contracting State of which he is a national. The case must be presented
within three years from the first notification of the action resulting in
taxation not in accordance with the provisions of the Agreement.

The competent authority shall endeavor, if the objection appears to it to be
justified and if it is not itself able to arrive at a satisfactory solution, to
resolve the case by mutual agreement with the competent authority of the
other Contracting State, with a view to the avoidance of taxation which is
not in accordance with this Agreement. Any agreement reached shall be
implemented notwithstanding any time limits or other procedural
limitations in the domestic law of the Contracting States.

The competent authorities of the Contracting States shall endeavor to
resolve by mutual agreement any difficulties or doubts arising as to the
interpretation or application of the Agreement. They may also consult
together for the elimination of double taxation in cases not provided for in
the Agreement.

The competent authorities also may agree to adjust any specific monetary
threshold as referred to in the Agreement to reflect economic or monetary
developments.

33



provision of the Agreement. The provisions of this paragraph shall not
apply if:

(a)

(b)

in the case of royalties, the royalties are received as compensation for
the use of, or the right to use, intangible property produced or
developed by the permanent establishment itself; or

in the case of any other income, the income derived from the other
Contracting State is derived in connection with, or is incidental to, the
active conduct of a trade or business carried on by the permanent
establishment in the third jurisdiction (other than the business of
making, managing or simply holding investments for the enterprise’s
own account, unless these activities are banking or securities
activities carried on by a bank or registered securities dealer).

ARTICLE 24

METHODS FOR ELIMINATION OF DOUBLE TAXATION

In the case of Viet Nam, double taxation shall be eliminated as follows:

(a)

(b)

(c)

Where a resident of Viet Nam derives income, profits or gains which
under the law of the United States and in accordance with this
Agreement may be taxed in the United States, Viet Nam shall allow as
a credit against its tax on the income, profits or gains an amount equal
to the tax paid to the United States. The amount of credit, however,
shall not exceed the amount of the Vietnamese tax on that income,
profits or gains computed in accordance with the taxation laws and
regulations of Viet Nam.

In the case of a Vietnamese company owning at least 10 percent of
the voting stock of a company that is a resident of the United States
and from which the Vietnamese company receives dividends, Viet
Nam shall allow as a credit against its tax on the income an amount
equal to the tax paid to the United States by or on behalf of the payer
with respect to the profits out of which the dividends are paid.

Where a resident of Viet Nam derives income, profits or gains that, in
accordance with any provision of the Agreement, is taxable only in
the United States, Viet Nam may nevertheless, in calculating the
amount of tax on the remaining income, profits or gains of such
resident in Viet Nam, take into account the exempted income.

In accordance with the provisions and subject to the limitations of the law
of the United States (as it may be amended from time to time without

30



(d) ifhe is a national of both Contracting States or of neither of them, the
competent authorities of the Contracting States shall endeavor to
settle the question by mutual agreement.

Where by reason of the provisions of paragraph 1 a company is a resident
of both Contracting States, then if it is constituted or organized under the
laws of one of the Contracting States or a political subdivision thereof, but
not under the laws of the other Contracting State or a political subdivision
thereof, such company shall be deemed to be a resident only of the first-
mentioned Contracting State. In all other cases involving a dual resident
company, the company shall not be treated as a resident of either
Contracting State for purposes of its claiming any benefits provided by the
Agreement.

Where by reason of the provisions of paragraphs | and 2 of this Article a
person other than an individual or a company is a resident of both
Contracting States, the competent authorities of the Contracting States
shall by mutual agreement endeavor to determine the mode of application
of this Agreement to that person.

ARTICLE 5
PERMANENT ESTABLISHMENT

For the purposes of this Agreement, the term “permanent establishment”
means a fixed place of business through which the business of an
enterprise is wholly or partly carried on.

The term “permanent establishment” includes especially:
(a) aplace of management;

(b) abranch;

(c) an office;

(d) a factory;

(e) aworkshop; and

(f) amine, an oil or gas well, a quarry or any other place of extraction of
natural resources.

The term “permanent establishment” likewise encompasses:

(a) a building site, construction, exploration, assembly or installation
project or supervisory activities in connection therewith, but only if
such site, project or activities last more than six months; and

7



ARTICLE 4
RESIDENT

1. For the purposes of this Agreement, the term “resident of a Contracting
State” means any person who, under the laws of that Contracting State, is
liable to tax therein by reason of his domicile, residence, citizenship, place
of incorporation, place of registration, place of management, or any other
criterion of a similar nature and also includes that Contracting State and
any political subdivision or local authority thereof. This term, however,
does not include any person who is liable to tax in that Contracting State in
respect only of income from sources in that Contracting State or of profits
attributable to a permanent establishment in that Contracting State.

2. The term “resident of a Contracting State” includes:
(a) a pension fund established in that Contracting State; and

(b) an organization that is established and maintained in that Contracting
State exclusively for religious, charitable, scientific, artistic, cultural,
or educational purposes,

notwithstanding that all or part of its income or gains may be exempt from
tax under the domestic law of that Contracting State.

3. Where by reason of the provisions of paragraph 1 an individual is a
resident of both Contracting States, then his status shall be determined as
follows:

(a) he shall be deemed to be a resident only of the Contracting State in
which he has a permanent home available to him; if he has a
permanent home available to him in both Contracting States, he shall
be deemed to be a resident only of the Contracting State with which
his personal and economic relations are closer (center of vital
interests);

(b) if the Contracting State in which he has his center of vital interests
cannot be determined, or if he does not have a permanent home
available to him in either Contracting State, he shall be deemed to be
a resident only of the Contracting State in which he has a habitual
abode;

(c) if he has a habitual abode in both Contracting States or in neither of
them, he shall be deemed to be a resident only of the Contracting
State of which he is a national;



In addition to paragraph 1:

(a) gains from the alienation of a United States real property interest may
be taxed in the United States; and

(b) gains from the alienation of shares of capital stock of a company, or
of an interest in a partnership, trust or estate, the property of which
consist directly or indirectly principally of immovable property (real
property) situated in Viet Nam may be taxed in Viet Nam. For the
purposes of this subparagraph (b), “principally” in relation to
ownership of immovable property (real property) means the value of
such immovable property (real property) exceeding 30 percent of the
aggregate value of all assets owned by the company, partnership, trust
or estate.

Gains from the alienation of movable property forming part of the business
property of a permanent establishment that an enterprise of a Contracting
State has in the other Contracting State or of movable property pertaining
to a fixed base available to a resident of a Contracting State in the other
Contracting’ State for the purpose of performing independent personal
services, including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise) or of such fixed base,
may be taxed in that other Contracting State.

Gains from the alienation of ships or aircraft operated by an enterprise of a
Contracting State in international traffic or movable property pertaining to
the operation of such ships or aircraft, shall be taxable only in that
Contracting State.

Gains from the alienation of any property other than that referred to in
paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of
which the alienator is a resident.

ARTICLE 14
INDEPENDENT PERSONAL SERVICES

Income derived by an individual who is a resident of a Contracting State in
respect of professional services or other activities of an independent
character shall be taxable only in that Contracting State except in the
following circumstances, when such income may also be taxed in the other
Contracting State:

(a) If he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities; in that

19



An enterprise of a Contracting State shall not be deemed to have a
permanent establishment in the other Contracting State merely because it
carries on business in that other Contracting State through a broker,
general commission agent or any other agent of an independent status,
provided that such persons are acting in the ordinary course of their
business as independent agents. However, when the activities of such an
agent are devoted wholly or almost wholly on behalf of that enterprise, and
conditions are made or imposed between that enterprise and the agent in
their commercial and financial relations which differ from those which
would have been made between independent enterprises, he shall not be
considered an agent of an independent status within the meaning of this
paragraph.

The fact that a company that is a resident of a Contracting State controls or
is controlled by a company that is a resident of the other Contracting State,
or that carries on business in that other Contracting State (whether through
a permanent establishment or otherwise), shall not of itself constitute either
company a permanent establishment of the other.

ARTICLE 6
INCOME FROM IMMOVABLE PROPERTY (REAL PROPERTY)

Income derived by a resident of a Contracting State from immovable
property (real property) (including income from agriculture or forestry)
situated in the other Contracting State may be taxed in that other
Contracting State.

The term “immovable property (real property)” shall have the meaning
which it has under the law of the Contracting State in which the property in
question is situated. The term shall in any case include property accessory
to immovable property (real property), (including livestock and equipment
used in agriculture and forestry), rights to which the provisions of general
law respecting landed property apply, usufruct of immovable property (real
property) and rights to variable or fixed payments as consideration for the
working of, or the right to work, mineral deposits, sources and other
natural resources; ships and aircraft shall not be regarded as immovable
property (real property).

The provisions of paragraph 1 shall apply to income derived from the
direct use, letting, or use in any other form of immovable property (real
property).



from the date the business apprentice first arrives in the first-mentioned
Contracting State for the purpose of training,

Notwithstanding the provisions of Articles 14 (Independent Personal
Services) and 15 (Dependent Personal Services), a student or business
apprentice within the meaning of paragraph 1 shall be exempt from tax by
the Contracting State in which the individual is temporarily present with
respect to income from personal services in an aggregate amount equal to
ten thousand United States dollars ($10,000) or its equivalent in Viet Nam
Dong annually. The competent authorities shall, every five years, adjust
the amount provided in this subparagraph to the extent necessary to take
into account changes in the U.S. personal exemption and the standard
deduction.

For purposes of this Article, a business apprentice is an individual:

(a) who is temporarily in a Contracting State for the purpose of securing
training required to qualify the individual to practice a profession or
professional specialty; or

(b) who is temporarily in a Contracting State as an employee of, or under
contract with, a resident of the other Contracting State, for the
primary purpose of acquiring technical, professional, or business
experience from a person other than that resident of the other
Contracting State (or a person related to such resident of the other
Contracting State).

ARTICLE 22
OTHER INCOME

Items of income beneficially owned by a resident of a Contracting State,
wherever arising, not dealt with in the foregoing Articles of this
Agreement shall be taxable only in that Contracting State.

The provisions of paragraph 1 shall not apply to the income, other than
income from immovable property (real property) as defined in paragraph 2
of Article 6 (Income from Immovable Property (Real Property)), if the
recipient of such income, being a resident of a Contracting State, carries on
business in the other Contracting State through a permanent establishment
situated therein, or performs in that other State independent personal
services from a fixed base situated therein, and the right or property in
respect of which the income is paid is effectively connected with such
permanent establishment or fixed base. In such case the provisions of

25



AGREEMENT
BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
AND
THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIET NAM
FOR
THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES
ON INCOME



(b) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of a Contracting State and an
enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two
enterprises in their commercial or financial relations which differ from
those that would be made between independent enterprises, then any
profits that, but for those conditions, would have accrued to one of the
enterprises, but, by reason of those conditions have not so accrued, may be
included in the profits of that enterprise and taxed accordingly.

Where a Contracting State includes in the profits of an enterprise of that
State, and taxes accordingly, profits on which an enterprise of the other
Contracting State has been charged to tax in that other Contracting State,
and the other Contracting State agrees that the profits so included are
profits that would have accrued to the enterprise of the first-mentioned
Contracting State if the conditions made between the two enterprises had
been those that would have been made between independent enterprises,
then that other Contracting State shall make an appropriate adjustment to
the amount of the tax charged therein on those profits. In determining such
adjustment, due regard shall be had to the other provisions of this
Agreement and the competent authorities of the Contracting States shall if
necessary consult each other.

ARTICLE 10
DIVIDENDS

Dividends paid by a company that is a resident of a Contracting State to a
resident of the other Contracting State may be taxed in that other
Contracting State.

However, such dividends may also be taxed in the Contracting State of
which the company paying the dividends is a resident and according to the
laws of that Contracting State, but if the beneficial owner of the dividends
is a resident of the other Contracting State, except as otherwise provided,
the tax so charged shall not exceed:

(a) 5 percent of the gross amount of the dividends if the beneficial owner
is a company that owns:

(i) directly at least 25 percent of the voting stock of the company
paying the dividends, if such company is a resident of the United
States; or

12



Where profits include items of income that are dealt with separately in
other Articles of this Agreement, then the provisions of those Articles shall
not be affected by the provisions of this Article.

In applying this Article, paragraph 5 of Article 10 (Dividends),
paragraph 6 of Article 11 (Interest), paragraph 4 of Article 12 (Royalties),
paragraph 3 of Article 13 (Gains from the Alienation of Property) and
paragraph 2 of Article 22 (Other Income), any income or gain attributable
to a permanent establishment during its existence is taxable in the
Contracting State where such permanent establishment is situated even if
the payments are deferred until such permanent establishment has ceased
to exist.

ARTICLE 8
SHIPPING AND AIR TRANSPORT

Profits of an enterprise of a Contracting State from the operation of ships
or aircraft in international traffic shall be taxable only in that State.

For purposes of this Article, profits from the operation of ships or aircraft
in international traffic include:

(a) profits from the rental of ships or aircraft on a full (time or voyage)
basis in international traffic;

(b) profits from the rental on a bareboat basis of ships or aircraft in
international traffic if the rental income is incidental to profits from
the operation of ships or aircraft in international traffic.

The provisions of paragraph 1 shall also apply to profits from the
participation in a pool, a joint business or an international operating
agency.

ARTICLE 9
ASSOCIATED ENTERPRISES

. Where

(a) an enterprise of a Contracting State participates directly or indirectly
in the management, control or capital of an enterprise of the other
Contracting State, or

11



ARTICLE 25
NON-DISCRIMINATION

Nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected therewith
that is other or more burdensome than the taxation and connected
requirements to which nationals of that other Contracting State in the same
circumstances are or may be subjected. This provision shall also apply to
persons who are not residents of one or both of the Contracting States.

The taxation on a permanent establishment that an enterprise of a
Contracting State has in the other Contracting State shall not be less
favorably levied in that other Contracting State than the taxation levied on
enterprises of that other Contracting State carrying on the same activities.

Except where the provisions of paragraph 1 of Article 9 (Associated
Enterprises), paragraph 8 of Article 11 (Interest), or paragraph 6 of
Article 12 (Royalties) apply, interest, royalties and other disbursements
paid by an enterprise of a Contracting State to a resident of the other
Contracting State shall, for the purpose of determining the taxable profits
of such enterprise, be deductible under the same conditions as if they had
been paid to a resident of the first-mentioned Contracting State. Similarly,
any debts of a resident of a Contracting State to a resident of the other
Contracting State shall, for the purpose of determining the taxable capital
of the first-mentioned resident, be deductible under the same conditions as
if they had been contracted to a resident of the first-mentioned Contracting
State.

Enterprises of a Contracting State, the capital of which is wholly or partly
owned or controlled, directly or indirectly by one or more residents of the
other Contracting State, shall not be subjected in the first-mentioned
Contracting State to any taxation or any requirement connected therewith
that is other or more burdensome than the taxation and connected
requirements to which other similar enterprises of the first-mentioned
Contracting State are or may be subjected.

Nothing contained in this Article shall be construed as obliging either
Contracting State to grant to individuals not resident in that Contracting
State any of the personal allowances, reliefs and reductions for tax

purposes due to civil obligations or family duties granted by that
Contracting State to its residents.

32



changing the general principle hereof), the United States shall allow to a
resident or citizen of the United States as a credit against the United States
tax on income applicable to residents and citizens:

(a) . the income tax paid or accrued to Viet Nam by or on behalf of such
resident or citizen; and

(b) in the case of a United States company owning at least 10 percent of
the voting stock of a company that is a resident of Viet Nam and from
which the United States company receives dividends, the income tax
paid or accrued to Viet Nam by or on behalf of the payer with respect
to the profits out of which the dividends are paid.

For the purposes of this paragraph, the taxes referred to in paragraphs 3(a)
and 4 of Article 2 (Taxes Covered) shall be considered income taxes.

For the purposes of applying paragraph 2 of this Article, an item of gross
income, as determined under the laws of the United States, derived by a
resident of the United States that, under this Agreement, may be taxed in
Viet Nam shall be deemed to be income from sources in Viet Nam.

Where a United States citizen is a resident of Viet Nam:

(a) with respect to items of income that under the provisions of this
Agreement are exempt from United States tax or that are subject to a
reduced rate of United States tax when derived by a resident of Viet
Nam who is not a United States citizen, Viet Nam shall allow as a
credit against Vietnamese tax, only the tax paid, if any, that the
United States may impose under the provisions of this Agreement,
other than taxes that may be imposed solely by reason of citizenship
under the saving clause of paragraph 4 of Article 1 (Persons Covered
and General Scope);

(b) for purposes of applying paragraph 2 to compute United States tax on
those items of income referred to in subparagraph (a), the United
States shall allow as a credit against United States tax the income tax
paid to Viet Nam after the credit referred to in subparagraph (a); the
credit so allowed shall not reduce the portion of the United States tax
that is creditable against the Vietnamese tax in accordance with
subparagraph (a); and

(c) for the exclusive purpose of relieving double taxation in the United
States under subparagraph (b), items of income referred to in
subparagraph (a) shall be deemed to arise in Viet Nam to the extent
necessary to avoid double taxation of such income under
subparagraph (b).

31



(b) the furnishing of services, including consultancy services, in a
Contracting State by an enterprise of the other Contracting State
through employees or other personnel engaged by the enterprise for
such purpose, but only if activities of that nature continue (for the
same or a connected project) within the first-mentioned Contracting
State for a period or periods aggregating more than six months within
any twelve-month period.

Notwithstanding the preceding provisions of this Article, the term
“permanent establishment” shall be deemed not to include:

(a) the use of facilities solely for the purpose of storage, display or
delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or of collecting information for the
enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of
carrying on, for the enterprise, any other activity of a preparatory or
auxiliary character; and

(f) the maintenance of a fixed place of business solely for any
combination of the activities mentioned in subparagraphs (a) through
(e), provided that the overall activity of the fixed place of business
resulting from this combination is of a preparatory or auxiliary
character.

Notwithstanding the provisions of paragraphs 1 and 2, where a person
other than an agent of an independent status to whom paragraph 6 applies
is acting in a Contracting State on behalf of an enterprise of the other
Contracting State, that enterprise shall be deemed to have a permanent
establishment in the first-mentioned Contracting State in respect of any
activities which that person undertakes for the enterprise, if such a person
has and habitually exercises in that Contracting State an authority to
conclude contracts in the name of the enterprise, unless the activities of
such person are limited to those mentioned in paragraph 4 that, if exercised
through a fixed place of business, would not make this fixed place of
business a permanent establishment under the provisions of that paragraph.



1.

between the Governments of both Contracting States shall be exempt from
tax in that other Contracting State.

ARTICLE 18

PENSIONS, SOCIAL SECURITY, ANNUITIES, ALIMONY,
AND CHILD SUPPORT

(a) Subject to the provisions of paragraph 2 of Article 20 (Government
Service), pensions and other similar remuneration beneficially owned
by a resident of a Contracting State in consideration of past
employment shall be taxable only in that Contracting State.

(b) Notwithstanding subparagraph (a), the amount of any such pension or
remuneration arising in a Contracting State that, when received,
would be exempt from taxation in that Contracting State if the
beneficial owner were a resident thereof shall be exempt from
taxation in the Contracting State of which the beneficial owner is a
resident.

Notwithstanding the provisions of paragraph 1, payments made by a
Contracting State under provisions of the social security or similar
legislation or under a public pension scheme of that State to a resident of
the other Contracting State or to a citizen of the United States shall be
taxable only in the first-mentioned Contracting State.

Annuities derived and beneficially owned by an individual resident of a
Contracting State shall be taxable only in that Contracting State. The term
“annuities” as used in this paragraph means a stated sum paid periodically
at stated times during a specified number of years, or for life, under an
obligation to make the payments in return for adequate and full
consideration (other than services rendered).

Alimony paid by a resident of a Contracting State to a resident of the other
Contracting State shall be taxable only in that other Contracting State. The
term “alimony” as used in this paragraph means periodic payments made
pursuant to a written separation agreement or a decree of divorce, separate
maintenance, or compulsory support, which payments are taxable to the
recipient under the laws of the Contracting State of which the recipient is a
resident.

Periodic payments, not dealt with in paragraph 4, for the support of a child
made pursuant to a written separation agreement or a decree of divorce,
separate maintenance, or compulsory support, paid by a resident of a

22



themselves entitled to benefits under the Agreement as a resident of
the United States; and

(b) in the case of Viet Nam, the Social Security Funds established under
the Law No. 71/2006/QH11 dated June 29th 2006 on Social Security;
and

(c) any plan, fund or arrangement modified by or created pursuant to
legislation enacted by a Contracting State after the date of signature
of the Agreement that the competent authorities agree satisfies the
definition of “pension fund” in subparagraph (j) of paragraph 1 of
Article 3 (General Definitions) of the Agreement.

With reference to paragraph 2 of Article 7 (Business Profits) of the
Agreement, when an enterprise resident in Viet Nam carries on business in
the United States through a permanent establishment situated therein,
Section 864(c)(3) of the Internal Revenue Code shall not apply to treat as
profits attributable to the permanent establishment all income, gain, or loss
from sources within the United States other than income, gain, or loss to
which Section 864(c)(2) applies.

With reference to Article 10 (Dividends) of the Agreement,
notwithstanding paragraph 2 of Article 10, dividends shall not be taxed in
the Contracting State of which the company paying the dividends is a
resident if:

(a) the beneficial owner of the dividends is a pension fund that is a
resident of the other Contracting State; and

(b) such dividends are not derived from the carrying on of a trade or
business by the pension fund or through an associated enterprise.

With reference to paragraph 3 of Article 10 (Dividends) of the Agreement,
paragraph 4 of this Protocol shall apply in the case of dividends paid by a
U.S. Regulated Investment Company (RIC), U.S. Real Estate Investment
Trust (REIT), and Vietnamese Real Estate Investment Fund (VREIF).
However, in the case of dividends paid by a REIT or a VREIF, paragraph 4
of this Protocol shall only apply if one or more of the conditions in
subparagraphs 3(a)(i) through 3(a)(iii) of Article 10 (Dividends) of the
Agreement are met.

With reference to paragraph 3 of Article 10 (Dividends) of the Agreement,
if the competent authorities of the Contracting States agree that an entity
created pursuant to legislation enacted by Viet Nam after the date of
signature of the Agreement is equivalent to a U.S. Regulated Investment

39



Company (RIC), paragraph 3 of Article 10 shall apply to dividends paid by
such an entity.

7. With reference to Article 11 (Interest) of the Agreement, paragraph 4 of
Article 11 applies to interest arising in the United States that is contingent
interest of a type that does not qualify as portfolio interest under United
States law.

8. With reference to paragraph 2 of Article 18 (Pensions, Social Security,
Annuities, Alimony, and Child Support) of the Agreement, in the case of
the United States, the phrase “similar legislation” is intended to refer to tier
1 Railroad Retirements benefits.

9. With reference to paragraph 1 of Article 25 (Non-Discrimination), for the
purposes of United States taxation, United States nationals who are subject
to tax on a worldwide basis are not in the same circumstances as nationals
of Viet Nam who are not residents of the United States.

This Protocol shall enter into force on the date of entry into force of the
Agreement and shall be an integral part thereof.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto by
their respective Governments, have signed this Protocol.

Washiegten. in duplicate, in the Engl 37°
DONE at AV aSNING: A. in duplicate, in the English language, this dn. day
of .wul: ..., 2015 A Vietnamese language text shall be prepared which shall be
considered equally authentic upon an exchange of diplomatic notes between the
Contracting States confirming its conformity with the English language text.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF THE SOCIALIST REPUBLIC OF
AMERICA VIET NAM

(athurine UV rll ~<juil—
i

40



(©)

Contracting State from a related person, the conditions described in
subparagraph (a) shall be considered to be satisfied with respect to
such item only if the trade or business activity carried on by the
resident in the first-mentioned Contracting State is substantial in
relation to the trade or business activity carried on by the resident or
related person in the other Contracting State. Whether a trade or
business activity is substantial for the purposes of this paragraph shall
be determined based on all the facts and circumstances.

For purposes of applying this paragraph, activities conducted by
persons connected to a person shall be deemed to be conducted by
such person. A person shall be connected to another if one possesses
at least 50 percent of the beneficial interest in the other (or, in the case
of a company, at least 50 percent of the aggregate vote and value of
the company's shares or of the beneficial equity interest in the
company) or another person possesses at least 50 percent of the
beneficial interest (or, in the case of a company, at least 50 percent of
the aggregate vote and value of the company's shares or of the
beneficial equity interest in the company) in each person. In any case,
a person shall be considered to be connected to another if, based on
all the relevant facts and circumstances, one has control of the other
or both are under the control of the same person or persons.

If a resident of a Contracting State is neither a qualified person pursuant to
paragraph 2 nor entitled to benefits with respect to an item of income under
paragraph 3 of this Article, the competent authority of the other
Contracting State may, nevertheless, grant the benefits of this Agreement,
or benefits with respect to a specific item of income, if such resident
demonstrates that its establishment, acquisition or maintenance of such
person and the conduct of its operations did not have as one of its principal
purposes the obtaining of benefits under this Agreement.

For purposes of this Article:

(a)

the term “recognized stock exchange” means:

(i) the NASDAQ System owned by the National Association of
Securities Dealers, Inc. and any stock exchange registered with
the U.S. Securities and Exchange Commission as a national
securities exchange under the U.S. Securities Exchange Act of
1934;

(ii) the Hanoi Stock Exchange (HNX) and the Ho Chi Minh City
Stock Exchange (HOSE); and

28



unemployment taxes), and the Federal taxes imposed on the
investment income of foreign private foundations.

This Agreement shall also apply to any identical or substantially similar
taxes that are imposed after the date of signature of the Agreement in
addition to, or in place of, the existing taxes. The competent authorities of
the Contracting States shall notify each other of any changes that have
been made in their respective taxation or other laws that significantly
affect their obligations under this Agreement.

ARTICLE 3
GENERAL DEFINITIONS

For the purposes of this Agreement, unless the context otherwise requires:

(a)

(b)

©)

(d)

)

()

the term “Viet Nam” means the Socialist Republic of Viet Nam; when
used in a geographical sense, it means its land territory, including
islands, and internal waters, territorial sea and airspace above them,
and the maritime areas beyond the territorial sea including seabed and
subsoil thereof, over which the Socialist Republic of Viet Nam
exercises sovereignty, sovereign rights and jurisdiction in accordance
with national legislation and international law;

the term “United States” means the United States of America, and
includes the states thereof and the District of Columbia; such term
also includes the territorial sea thereof and any maritime areas beyond
the territorial sea within which the United States may exercise
sovereign rights or jurisdiction in accordance with international law;
the term, however, does not include Puerto Rico, the Virgin Islands,
Guam or any other United States possession or territory;

the terms “a Contracting State” and “the other Contracting State”
mean Viet Nam or the United States as the context requires;

the term “person” includes an individual, an estate, a trust, a
partnership, a company and any other body of persons;

the term “company” means any body corporate or any entity that is
treated as a body corporate for tax purposes according to the laws of
the state in which it is organized;

the terms “enterprise of a Contracting State” and “enterprise of the
other Contracting State” mean respectively an enterprise carried on by
a resident of a Contracting State and an enterprise carried on by a
resident of the other Contracting State;



ARTICLE 11
INTEREST

Interest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other Contracting State.

However, such interest may also be taxed in the Contracting State in which
it arises and according to the laws of that Contracting State, but if the
beneficial owner of the interest is a resident of the other Contracting State,
the tax so charged shall not exceed 10 percent of the gross amount of the
interest.

Notwithstanding the provisions of paragraph 2, interest described in
paragraph 1 shall be taxable only in the Contracting State in which the
recipient is a resident if the beneficial owner of the interest is a resident of
that Contracting State, and the interest is paid by the Contracting State in
which the interest arises or by the central bank, a political subdivision or a
local authority thereof.

Notwithstanding the provisions of paragraph 2:

(a) interest arising in a Contracting State that is determined with
reference to receipts, sales, income, profits or other cash flow of the
debtor or a related person, to any change in the value of any property
of the debtor or a related person or to any dividend, partnership
distribution or similar payment made by the debtor or a related person
may be taxed in the Contracting State in which it arises, and
according to the laws of that Contracting State, but if the beneficial
owner is a resident of the other Contracting State, the interest may be
taxed at a rate not exceeding 15 percent of the gross amount of the
interest; and

(b) interest that is an excess inclusion with respect to a residual interest in
a real estate mortgage investment conduit may be taxed by each
Contracting State in accordance’ with its domestic law.

The term “interest” as used in this Article means income from debt-claims
of every kind, whether or not secured by mortgage, and whether or not
carrying a right to participate in the debtor’s profits, and in particular,
income from government securities and income from bonds or debentures,
including premiums or prizes attaching to such securities, bonds or
debentures, and all other income that is subjected to the same taxation
treatment as income from money lent by the taxation law of the
Contracting State in which the income arises. Income dealt with in

15



(Real Property)) or paragraph 1 of Article 13 (Gains from the Alienation of
Property), over the interest paid by that company shall be deemed to arise
in that other Contracting State and be beneficially owned by a resident of
the first-mentioned Contracting State. The tax imposed under this Article
on such interest shall not exceed the rate provided in paragraph 2.

ARTICLE 12
ROYALTIES

Royalties arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other Contracting State.

However, such royalties may also be taxed in the Contracting State in
which they arise and according to the laws of that Contracting State, but if
the beneficial owner of the royalties is a resident of the other Contracting
State, the tax so charged shall not exceed:

(a) 5 percent of the gross amount of the royalties described in
subparagraph (a) of paragraph 3;

(b) 10 percent of the gross amount of the royalties described in
subparagraph (b) of paragraph 3.

The term “royalties” as used in this Article means:

(a) payments of any kind received as a consideration for the use of, or the
right to use, industrial, commercial or scientific equipment.
Notwithstanding the preceding sentence, the term “royalties” shall not
include the following payments to which the provisions of Article 7
(Business Profits) shall apply:

(i) . payments for the rental on a bareboat basis of ships or aircraft if
such ships or aircraft are operated in international traffic by the
lessee; or

(ii) payments for the use, maintenance or rental of containers
(including trailers, barges, and related equipment for the
transport of containers), except to the extent that those containers
are used for transport solely between places within the other
Contracting State;

(b) payments of any kind received as a consideration for the use of, or the
right to use, any copyright of literary, artistic, scientific or other work
(including cinematographic films, films or tapes used for radio or

17



provisions of this Agreement, a former citizen or former long-term resident
of a Contracting State may, for the period of ten years following the loss of
such status, be taxed in accordance with the laws of that Contracting State.

The provisions of paragraph 4 shall not affect:

(a) the benefits conferred by a Contracting State under paragraph 2 of
Article 9 (Associated Enterprises), paragraphs 1(b), 2, and 5 of
Article 18 (Pensions, Social Security, Annuities, Alimony, and Child
Support), paragraphs 1 and 2 of Article 19 (Pension Funds), and
Articles 24 (Methods for Elimination of Double Taxation), 25 (Non-
Discrimination), and 26 (Mutual Agreement Procedure); and

(b) the benefits conferred by a Contracting State under Articles 20
(Government Service), 21 (Students and Apprentices), and 28
(Members of Diplomatic Missions and Consular Posts), upon
individuals who are neither citizens of, nor have been admitted for
permanent residence in that State.

An item of income, profit or gain derived through an entity that is fiscally
transparent under the laws of either Contracting State shall be considered
to be derived by a resident of a Contracting State to the extent that the item
is treated for purposes of the taxation law of such Contracting State as the
income, profit or gain of a-resident.

ARTICLE 2
TAXES COVERED

This Agreement shall apply to taxes on income imposed on behalf of a
Contracting State irrespective of the manner in which they are levied.

There shall be regarded as taxes on income all taxes imposed on total
income, or on elements of income, including taxes on gains from the
alienation of property.

The existing taxes to which this Agreement shall apply are:
(a) in the case of Viet Nam:

(i) _ the personal income tax; and

(ii) the business income tax;

(b) in the case of the United States: the Federal income taxes imposed by
the Internal. Revenue Code (but excluding social security and



PROTOCOL TO THE AGREEMENT BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND

THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIET NAM

FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

On signing the Agreement between the Government of the United States _

of America and the Government of the Socialist Republic of Viet Nam for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income (hereinafter referred to as “the Agreement”), the
two Contracting States have agreed to the following provisions:

1.

With reference to paragraph 3(b) of Article 2 (Taxes Covered) of the
Agreement, it is understood that the Federal tax imposed on the investment
income of foreign private foundations shall not be imposed on dividends,
interest or royalties derived by private foundations organized in Viet Nam
at a rate in excess of the rates provided for in Articles 10 (Dividends), 11
(Interest), and 12 (Royalties) of the Agreement, respectively. It is also
understood that such tax may be imposed on other income derived by
private foundations organized in Viet Nam under Article 22 (Other
Income).

With reference to subparagraph (j) of paragraph 1 of Article 3 (General
Definitions) of the Agreement, the term “pension fund” includes the
following:

(a) in the case of the United States, a trust providing pension or
retirement benefits under an Internal Revenue Code section 401(a)
qualified pension plan (which includes a Code section 401(k) plan
and a profit sharing or stock bonus plan); a Code section 403(a)
qualified annuity plan; a Code section 403(b) plan; a trust that is an
individual retirement account under Code section 408; a Roth
individual retirement account under Code section 408A; a simple
retirement account under Code section 408(p); a trust providing
pension or retirement benefits under a simplified employee pension
plan under Code section 408(k); a trust described in Code section
457(g) providing pension or retirement benefits under a Code section
457(b) plan; and the Thrift Savings Fund (Code section 7701(j)). A
group trust described in Revenue Ruling 81-100, as amended by
Revenue Ruling 2004-67, Revenue Ruling 2011-1, and Revenue
Ruling 2014-24, qualifies as a pension fund only if substantially all of
its activity is to earn income for the benefit of pension funds that are

38



Article 7 (Business Profits) or Article 14 (Independent Personal Services),
as the case may be, shall apply.

Notwithstanding the provisions of paragraphs | and 2, items of income of
a resident of a Contracting State not dealt with in the foregoing Articles of
this Agreement and arising in the other Contracting State may also be
taxed in that other Contracting State.

ARTICLE 23
LIMITATION ON BENEFITS

Except as otherwise provided in this Article, a resident of a Contracting
State shall not be entitled to the benefits of this Agreement otherwise
accorded to residents of a Contracting State unless such resident is a
“qualified person” as defined in paragraph 2.

A resident of a Contracting State shall be a qualified person for a taxable
year if the resident is:

(a) an individual;

(b) a Contracting State, or a political subdivision or local authority
thereof;

(c) acompany, if:

(i) _ the principal class of its shares (and any disproportionate class of
shares) is regularly traded on one or more recognized stock
exchanges, and either:

(A) its principal class of shares is primarily traded on one or
more recognized stock exchanges located in the Contracting
State of which the company is a resident; or

(B) the company’s primary place of management and control is
in the Contracting State of which it is a resident; or

(ii) at least 50 percent of the aggregate vote and value of the shares
(and at least 50 percent of any disproportionate class of shares)
in the company is owned directly or indirectly by five or fewer
companies entitled to benefits under clause (i) of this
subparagraph, provided that, in the case of indirect ownership,
each intermediate owner is a resident of either Contracting State;

(d) a person described in paragraph 2 of Article 4 (Resident) of this
Agreement, provided that, in the case of a person described in clause

26



The Government of the United States of America and the Government of the
Socialist Republic of Viet Nam,

Desiring to conclude an Agreement for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows:

ARTICLE 1

PERSONS COVERED AND GENERAL SCOPE

1. This Agreement shall apply only to persons who are residents of one or
both of the Contracting States, except as otherwise provided in the
Agreement.

2. This Agreement shall not restrict in any manner any benefit now or
hereafter accorded:

(a)
(b)
3. @)

(b)

by the laws of either Contracting State; or

by any other agreement to which the Contracting States are parties.

Notwithstanding the provisions of subparagraph (b) of paragraph 2 of
this Article:

@

(ii)

for purposes of paragraph 3 of Article XXII (Consultation) of the
General Agreement on Trade in Services, the Contracting States
agree that any question arising as to the interpretation or
application of this Agreement and, in particular, whether a
taxation measure is within the scope of this Agreement, shall be
determined exclusively in accordance with the provisions of
Article 26 (Mutual Agreement Procedure) of this Agreement;
and

the provisions of Article XVII of the General Agreement on
Trade in Services shall not apply to a taxation measure unless the
competent authorities agree that the measure is not within the
scope of Article 25 (Non-Discrimination) of this Agreement.

For the purposes of this paragraph, a “measure” is a law, regulation,
tule, procedure, decision, administrative action, or any similar
provision or action.

4. Except to the extent provided in paragraph 5, this Agreement shall not
affect the taxation by a Contracting State of its residents (as determined
under Article 4 (Resident)) and its citizens. Notwithstanding the other



The competent authorities of the Contracting States may communicate with
each other directly for the purpose of reaching an agreement in the sense of
the preceding paragraphs.

ARTICLE 27

EXCHANGE OF INFORMATION AND ADMINISTRATIVE
ASSISTANCE

The competent authorities of the Contracting States shall exchange such
information as is foreseeably relevant for carrying out the provisions of
this Agreement or of the domestic laws of the Contracting States
concerning taxes of every kind and description imposed by the Contracting
States insofar as the taxation thereunder is not contrary to the Agreement,
including information relating to the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to, such taxes. The exchange of information is not restricted by
paragraph 1 of Article 1 (Persons Covered and General Scope) or Article 2
(Taxes Covered).

Any information received under this Article by a Contracting State shall be
treated as secret in the same manner as information obtained under the
domestic laws of that Contracting State and shall be disclosed only to
persons or authorities (including courts and administrative bodies)
involved in the assessment or collection, or administration of, the
enforcement or prosecution in respect of, the determination of appeals in
relation to the taxes referred to above, or the oversight of such functions.
Such persons or authorities shall use the information only for such
purposes. They may disclose the information in public court proceedings
or in judicial decisions.

In no case shall the provisions of paragraphs 1 and 2 be construed so as to
impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other Contracting State;

(b) to supply information that is not obtainable under the laws or in the
normal course of the administration of that or of the other Contracting
State;

(c) to supply information that would disclose any trade, business,
industrial, commercial or professional secret or trade process, or
information, the disclosure of which would be contrary to public
policy.

34



(iii) any other stock exchange agreed upon by the competent
authorities;

(b) the term “principal class of shares” means the ordinary or common
shares of the company, provided that such class of shares represents
the majority of the voting power and value of the company. If no
single class of ordinary or common shares represents the majority of
the aggregate voting power and value of the company, the “principal
class of shares” are those classes that in the aggregate represent a
majority of the aggregate voting power and value of the company;

(c) the term “disproportionate class of shares” means any class of shares
of a company resident in one of the Contracting States that entitles the
shareholder to disproportionately higher participation, through
dividends, redemption payments or otherwise, in the earnings
generated in the other Contracting State by particular assets or
activities of the company; and

(d) a company's “primary place of management and control” shall be in
the Contracting State of which it is a resident only if executive
officers and senior management employees exercise day-to-day
responsibility for more of the strategic, financial and operational
policy decision making for the company (including its direct and
indirect subsidiaries) in that Contracting State than in any other state
and the staff of such persons conduct more of the day-to-day activities
necessary for preparing and making those decisions in that
Contracting State than in any other state.

Notwithstanding the preceding provisions of this Article, where an
enterprise of a Contracting State derives income from the other
Contracting State, and that income is attributable to a permanent
establishment which that enterprise has in a third jurisdiction, the tax
benefits that would otherwise apply under the other provisions of the
Agreement shall not apply to that income if the profits of that permanent
establishment are subject to a combined aggregate effective rate of tax in
the first-mentioned Contracting State and third state that is less than 60
percent of the general rate of company tax applicable in the first-mentioned
Contracting State. Any dividends, interest or royalties to which the
provisions of this paragraph apply shall be subject to tax in the other
Contracting State at a rate that shall not exceed 15 percent of the gross
amount thereof. Any other income to which the provisions of this
paragraph apply shall be subject to tax under the provisions of the
domestic law of the other Contracting State, notwithstanding any other

29



(ii) directly at least 25 percent of the capital of the company paying
the dividends, if such company is a resident of Viet Nam;

(b) 15 percent of the gross amount of the dividends in all other cases.

This paragraph shall not affect the taxation of the company in respect of
the profits out of which the dividends are paid.

(a) Subparagraph (a) of paragraph 2 shall not apply in the case of
dividends paid by a U.S. Regulated Investment Company (RIC) or a
U.S. Real Estate Investment Trust (REIT) or a Vietnamese Real
Estate Investment Fund (VREIF). In the case of dividends paid by a
RIC, subparagraph (b) of paragraph 2 shall apply. In the case of
dividends paid by a REIT or a VREIF, subparagraph (b) of
paragraph 2 shall apply only if:

(i) the beneficial owner of the dividends is an individual or pension
fund, in either case holding an interest of not more than 10
percent in the REIT or the VREIF;

(ii) the dividends are paid with respect to a class of stock that is
publicly traded and the beneficial owner of the dividends is a
person holding an interest of not more than 5 percent of any
class of the REIT’s stock or the VREIF’s stock; or

(iii) the beneficial owner of the dividends is a person holding an
interest of not more than 10 percent in the REIT or the VREIF
and the REIT or the VREIF is diversified.

(b) For purposes of this paragraph, a REIT or a VREIF shall be
“diversified” if the value of no single interest in immovable property
(real property) exceeds 10 percent of its total interests in immovable
property (real property). For the purposes of this rule, foreclosure
property shall not be considered an interest in immovable property
(real property). Where a REIT holds an interest in a partnership, it
shall be treated as owning directly a proportion of the partnership's
interests in immovable property (real property) corresponding to its
interest in the partnership.

The term “dividends” as used in this Article means income from shares,
mining shares, founders’ shares or other rights, not being debt-claims,
participating in profits, as well as other income that is subjected to the
same taxation treatment as income from shares under the laws of the State
of which the company making the distribution is a resident.

The provisions of paragraphs 1 through 3 shall not apply if the beneficial
owner of the dividends, being a resident of a Contracting State, carries on

13



Article 10 (Dividends) and penalty charges for late payment shall not be
regarded as interest for the purposes of this Article.

The provisions of paragraphs 1 through 4 shall not apply if the beneficial
owner of the interest, being a resident of a Contracting State, carries on
business in the other Contracting State, in which the interest arises,
through a permanent establishment situated therein, or performs in that
other Contracting State independent personal services from a fixed base
situated therein and the debt-claim in respect of which the interest is paid
is effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 (Business Profits) or Article 14
(Independent Personal Services), as the case may be, shall apply.

Interest shall be deemed to arise in a Contracting State when the payer is
that State itself, a political subdivision or entity thereof, a local authority or
a resident of that State. Where, however, the person paying the interest,
whether he is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base in connection with which
the indebtedness on which the interest is paid was incurred, and such
interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the Contracting State in which the
permanent establishment or fixed base is situated.

Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the
amount of the interest, having regard to the debt-claim for which it is paid,
exceeds the amount which would have been agreed upon by the payer and
the beneficial owner in the absence of such relationship, the provisions of
this Article shall apply only to the last-mentioned amount. In such case, the
excess part of the payments shall remain taxable according to the laws of
each Contracting State, due regard being had to the other provisions of this
Agreement.

The excess, if any, of the amount of interest allocable to the profits of a
company resident in a Contracting State that are:

(a) attributable to a permanent establishment in the other Contracting
State (including gains under paragraph 3 of Article 13 (Gains from
the Alienation of Property)); or

(b) subject to tax in the other Contracting State under Article 6 (Income
from Immovable Property (Real Property)) or paragraph 1 of
Article 13 (Gains from the Alienation of Property),

over the interest paid by that permanent establishment, or in the case of
profits subject to tax under Article 6 (Income from Immovable Property

16