Signing of the Double Taxation Avoidance Agreement between Vietnam and Panama

The signing of the Double Taxation Avoidance Agreement between Vietnam and Panama will contribute to promoting trade and investment cooperation between Vietnam and Panama, creating a clear and stable legal tax environment for Panamanian and Vietnamese investors to develop and expand their business and investment activities, and indirectly strengthening comprehensive cooperation in various fields between Vietnam and Latin American countries.

Economic and trade relations between the two countries remained modest in 2015, with Vietnam's exports totaling US$268,8 million and imports US$23,38 million. Vietnam exported agricultural machinery, wood products, footwear, textiles, plastic products, rattan and bamboo goods, handbags, wallets, suitcases, hats, umbrellas, bicycles, and spare parts to Panama; and imported plastics, raw materials, wood, and wood products. Both sides have significant potential for increased cooperation in areas such as trade, maritime transport, agriculture, and traditional medicine. Several Vietnamese companies are currently in the process of establishing representative offices in Panama and the ZLC (Zoning Central Free Trade Zone) in Panama. Regarding investment, as of July 20, 2016, Panama ranked 52nd out of 115 countries and territories investing in Vietnam, with 10 projects totaling US$60,7 million in registered investment capital. The signing of the Double Taxation Avoidance Agreement will contribute to strengthening cooperation between Vietnam and Panama and create a new legal and attractive environment for cooperation and development for the common prosperity of both countries in particular and investors in the region in general. Especially for Vietnam, after the tax agreement is signed and comes into effect (expected to be implemented from January 1, 2017), the Vietnamese tax authorities will have a legal basis to exchange information with the Panamanian tax authorities to serve Vietnam's tax management work.