According to recent reports, officials from Egypt and Vietnam met on 27 August 2018 to discuss bilateral issues, including the completion of the ratification procedures for the pending income tax treaty between the two countries, which Vietnam is pushing for as soon as possible. The treaty, signed 6 March 2006, is the first of its kind between the two countries.
The treaty covers Egyptian individual income tax, corporate profit tax, the duty for the development of the financial resources of the state, and any supplementary taxes. It covers Vietnamese person income tax and business income tax.
The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services within 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 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. In addition, a provision for a sparring credit is also included in respect of tax that would have been payable in a Contracting State but for incentives designed to promote economic development.
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.
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