CIRCULAR NO. 95/2026/TT-BTC: NEW GUIDANCE ON THE APPLICATION OF DOUBLE TAXATION AGREEMENTS EFFECTIVE FROM 1 JULY 2026

On 1 July 2026, the Ministry of Finance issued Circular No. 95/2026/TT-BTC, providing new guidance on the implementation of Double Taxation Agreements between Vietnam and other countries and territories, together with guidance on Mutual Agreement Procedures and Advance Pricing Agreements applicable to enterprises engaging in related-party transactions.

The new guidance took effect on 1 July 2026 and introduces several significant developments concerning treaty entitlement, beneficial ownership, permanent establishments, taxation of capital transfers, foreign employees, cross-border exchange of tax information, and international assistance in tax collection.

W&A is pleased to provide below a summary of the key developments and their practical implications for businesses conducting cross-border transactions:

1. Enhanced scrutiny of tax treaty benefits;

2. Time limit for claiming tax treaty benefits;

3. Broader approach to permanent establishments;

4. Permanent establishment risks arising from subsidiaries, agents and personnel in Vietnam;

5. Services provided for less than 183 days may still create a permanent establishment;

6. Attribution of income and expenses to a permanent establishment;

7. Taxation of direct and indirect capital transfers;

8. Income of foreign experts and employees;

9. Enhanced cross-border exchange of tax information;

10. International assistance in the collection of tax debts,

The new guidance reflects a continued shift in tax administration towards greater emphasis on economic substance, substantive business operations and transparency in cross-border transactions.

Formal documentation alone will no longer be the sole factor determining eligibility for benefits under a Double Taxation Agreement. The tax authorities may conduct a more detailed assessment of the parties’ functions, assets, personnel, control, risks and commercial purposes.

As international tax information exchange and cooperation mechanisms continue to expand, businesses should proactively review their transaction structures, tax documentation and operating practices to mitigate the risk of tax reassessments, penalties and denial of treaty benefits.

👉 Read the full article here:  

W&A Newsletter on Circular 95 on Tax Treaty Guidance (EN).pdf

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