On 14 April 2015, the Macedonian parliament approved the law for the ratification of the pending income tax treaty with Vietnam. The treaty, signed 15 October 2014, is the first of its kind between the two countries.
The treaty covers Macedonian personal income tax and profit tax, and covers Vietnamese personal income tax and business income tax.
The treaty includes the provision that a permanent establishment will be deemed constituted if an enterprise furnishes services in a Contracting State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 6 months in any 12-month period.
A permanent establishment will also be deemed constituted when a person conducts activities in a Contracting State which relate to the exploration for and exploitation of natural resources located in that State.
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.
Both countries apply the credit method for the elimination of double taxation. A provision is also included for a tax sparing credit for tax that would otherwise be payable but has been reduced or exempted under legal provisions of a Contracting State for tax incentives.
The treaty will enter into force once the ratification instruments are exchanged, and will apply from 1 January of the year following its entry into force.
We’re here to answer any questions you have about the Orbitax products and services.
We’re committed to providing high value, low cost tax research and management solutions.
Our Twitter account is where you can find latest information, news updates, offers and lots more.