Applying Vietnam's double tax treaties: procedures, documents and the mistakes that lead to refusal

The short answer

Double tax treaties allow residents of treaty partner countries to be exempt from, or pay reduced, Vietnamese tax on certain income, such as:

• business profits where there is no permanent establishment;

• interest and royalties at capped treaty rates;

• employment income under certain conditions.

However, treaty benefits do not apply automatically. The taxpayer must show that it meets the conditions and follow the prescribed procedure.

From 1 July 2026, the new guidance framework consists of two circulars:

• Circular No. 95/2026/TT-BTC: the substance of treaty application, the mutual agreement procedure (MAP) and APAs;

• Circular No. 89/2026/TT-BTC: documents and procedures.

Together they replace Circular No. 205/2013/TT-BTC and related provisions. Two important new points:

• the date of a treaty application is the date the complete file is submitted;

• applications made more than 3 years after the tax liability arose will be refused.

When are tax treaties used most often?

Type of income	Typical treaty benefit	Key condition
Profits from services provided by foreign contractors	CIT exemption in Vietnam if there is no PE	No breach of time thresholds, no fixed place of business, no dependent agent
Royalties	Capped rate under each treaty	The recipient is the beneficial owner
Interest	Capped rate, or exemption in some cases	Usually beneficial only where the treaty rate is below the domestic rate
Employment income of foreign individuals	PIT exemption if under 183 days and other conditions are met	Income not paid or borne by an entity in Vietnam
International transport income	Exemption in the source country under many treaties	The transport company is a resident of the treaty partner

Basic documents for a treaty application

Specific requirements vary by type of income and tax method. The file typically includes:

• an application in the prescribed form;

• a certificate of residence issued by the tax authority of the country of residence, for the correct year as prescribed, with consular legalisation (unless exempt);

• the contract and documents evidencing the transaction;

• evidence of beneficial ownership, especially for interest, royalties and dividends;

• a power of attorney where filed through a representative.

Under the new guidance, files can be submitted electronically. Paper submission is allowed where files are large or in special technical formats.

Six mistakes that lead to treaty applications being refused

1. A certificate of residence for the wrong year, not legalised, or issued to an entity other than the contracting party.

2. Filing too late: under Circular No. 95/2026/TT-BTC, applications made more than 3 years after the tax liability arose are refused.

3. Failing to prove beneficial ownership: the recipient is merely an intermediary with no substantive business that passes most of the income on to a third party.

4. A PE has in fact arisen: experts in Vietnam exceed the day-count threshold, or someone signs contracts on the foreign company's behalf.

5. Applying the wrong article: for example, treating income as business profits when it is in substance a royalty.

6. Self-applying without following the procedure: the Vietnamese party does not withhold FCT because "the treaty exempts it", but has no treaty file. In an audit, the tax authority collects from the Vietnamese party.

When double taxation has already occurred: the mutual agreement procedure (MAP)

Where Vietnam's or the other country's taxation results in taxation not in accordance with the treaty, the taxpayer may request a MAP. A typical example is a transfer pricing adjustment in one country without a corresponding adjustment in the other.

Under Circular No. 95/2026/TT-BTC:

• Vietnamese-resident taxpayers submit MAP requests to the Tax Department using form 01/DTA-MAP;

• the deadline is 3 years (or 2 years depending on the treaty) from the first notification of the taxation not in accordance with the treaty;

• the process covers receipt, review, exchange of positions, negotiation and confirmation of the outcome with the other country's competent authority.

Illustrative case

Company GG hired a Japanese consulting firm for a USD 400,000 production process improvement project. Japanese experts came to Vietnam on three visits, about 70 days in total during the year.

Company GG did not withhold CIT under FCT, on the grounds that "the Vietnam–Japan treaty exempts it". However, it did not file a treaty application, and the partner's certificate of residence had only been sent by email.

In an audit, Company GG was asked for proof. Fortunately, it was still within the 3-year limit, so the company:

• asked the partner for a certificate of residence for the correct year, with consular legalisation;

• prepared a log of each expert's working days, compared with the treaty's services PE threshold;

• filed a complete treaty application.

As a result, the CIT was considered for exemption. VAT was still payable, as tax treaties do not cover VAT.

FAQs

Which regulations govern treaty application from 1 July 2026?

Circular No. 95/2026/TT-BTC (substance, MAP and APAs) and Circular No. 89/2026/TT-BTC (documents and procedures), replacing Circular No. 205/2013/TT-BTC and related provisions.

What is the deadline for a treaty application?

Under Circular No. 95/2026/TT-BTC, applications made more than 3 years after the tax liability arose are refused. The application date is the date the complete file is submitted.

Do tax treaties exempt VAT?

No. Double tax treaties cover taxes on income and capital, not VAT.

Can an intermediary company in Hong Kong or Singapore claim treaty benefits?

Only if it is a resident and the beneficial owner of the income. Intermediaries without real activity that simply pass income on risk refusal.

Legal basis

• Law on Tax Administration No. 108/2025/QH15 and Decree No. 252/2026/ND-CP.

• Circular No. 95/2026/TT-BTC on tax treaties, MAP and APAs (effective 1 July 2026).

• Circular No. 89/2026/TT-BTC detailing certain provisions of the Law on Tax Administration.

• Official Letter No. 4736/CT-CS of the Tax Department introducing the new points of Circular No. 95/2026/TT-BTC.

• Vietnam's double tax treaties.

How W&A can help

Tax treaties work only when applied under the right conditions and through the right procedure. W&A supports Vietnamese businesses and foreign investors with:

• Assessing treaty eligibility for each type of income and transaction.

• Preparing treaty applications for foreign contractors, investors and individuals.

• Beneficial ownership assessments and review of investment structures using intermediary companies.

• Mutual agreement procedures (MAP) where double taxation arises.

• Review of prior-period FCT obligations and supplementary treaty filings within the permitted time.