On September 3, 2016, at the Government Office headquarters, the Deputy Minister of Finance, Mr. Do Hoang Anh Tuan, and the Ambassador Extraordinary and Plenipotentiary of the Republic of India to Vietnam, Mr. Parvathaneni Harish, officially signed the Protocol amending the Agreement on the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income between the Government of the Socialist Republic of Vietnam and the Government of the Republic of India (the Protocol). The signing ceremony took place in a solemn and friendly atmosphere in the presence of Prime Minister Nguyen Xuan Phuc, Indian Prime Minister Narendra Modi, and representatives from various ministries and agencies of both countries (Government Office, Ministry of Foreign Affairs, Ministry of Public Security, Ministry of Defence, Ministry of Natural Resources and Environment, etc.).
Regarding investment: investment relations between Vietnam and India have shown promising signs and are expected to increase rapidly in the near future, especially with the implementation of the US$1,8 billion Long Phu II Thermal Power Plant project in Soc Trang by the TATA Group. As of July 20, 2016, India had 129 investment projects in Vietnam with a total registered capital of US$534,948 million, ranking 29th out of 115 countries and territories investing in Vietnam. India invests in Vietnam in the main sectors of telecommunications, information technology, motorcycles, fertilizers, pharmaceuticals, and electrical equipment. Notable projects include: the joint venture to build the Nam Con Son Gas Plant, and the joint venture between FPT and APTECH to establish a training center for Vietnamese information technology experts in India.
As of May 2016, Vietnamese businesses had only invested in one project in India: the India Technology Investment Development Company of FPT Technology Investment Development Company, with a total investment of US$150.000 for software production and IT services (data from the Foreign Investment Agency - Ministry of Planning and Investment).
The Double Taxation Avoidance Agreement between Vietnam and India was signed on September 7, 1994, in Hanoi and came into effect on February 2, 1995.
According to the Protocol, both countries (India and Vietnam) agreed to amend Article 27 on “Information Exchange” of the Double Taxation Avoidance Agreement between India and Vietnam to meet international standards on transparency and information exchange as stipulated by the Organization for Economic Cooperation and Development (OECD), adding a new Article 27A clause on “Tax Collection Assistance” to enhance mutual assistance in tax administration in general and tax collection in particular.
The Protocol establishes internationally accepted standards regarding the effective exchange of information on tax matters, including banking information. At the same time, the Protocol stipulates that information from Vietnam relating to Indian residents (and vice versa) may be shared with law enforcement agencies when authorized by the competent authorities of Vietnam and India… The exchange of information under the new regulations also aims to help the Vietnamese tax authorities better manage and collect information on taxpayers…
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