On 24 June 2016, Uruguay ratified the pending income and capital tax treaty with Vietnam. The treaty, signed 9 December 2013, is the first of its kind between the two countries.
The treaty covers Uruguayan tax on business income, personal income tax, non-residents income tax, tax for social security assistance, and capital tax. It covers Vietnamese personal income tax and business income tax.
The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services through employees or other engaged personnel if the activities continue for the same or connected project within a Contracting State for a period or periods aggregating more than 183 days within any 12-month period.
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.
The treaty will enter into force 15 days after the ratification instruments are exchanged, and will apply from 1 January of the year following its entry into force.
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