Tax Treaty Between Indonesia and Vietnam

 
 
 

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File Type: Pdf
 
Status: In Force
 
  Number of Indonesia Treaties:   40 - See All
 
  Number of Vietnam Treaties:   36 - See All
 
 

Introductory note on Tax Treaty Planning

 
Tax Treaties (double taxation agreements or DTAs) are international agreements or conventions concluded with the object of eliminating double taxation by the contracting states. To succeed in international tax planning, it is essential to engage in deep and far-reaching calculations. Tax treaties themselves and the OECD Commentary on the Model Convention give you practical hands-on guidance on international tax planning issues.
 
 

Treaty Shopping under the IndonesiaVietnam Tax Treaty

 
Treaty shopping is the use of a tax treaty by a person resident in a country that is not a party to the treaty, i.e. in the present instance by someone who is a resident of neither Indonesia nor Vietnam. However, it is becoming more and more difficult to use provisions, which were intended to prevent double taxation, in such a way that they result, for the purposes of an international tax plan.
 
 

Tax Treaty news from the OECD

 
The OECD has released two reports submitted to its Committee on Fiscal Affairs by an Informal Consultative Group of business and government representatives. The Reports address, respectively:

(a) Technical issues relating to granting treaty benefits with respect to income of collective investment vehicles; and
(b) Procedural barriers to claims for treaty benefits that affect portfolio investors more generally.

These are issues which may impact on international tax planning transactions.
 
 
 
 
 
 
 

Know your Offshore Terms:

 
 
 

Coordination Centers

The activities that can be carried out by coordination centers generally fall into two principal categories: (a) support services rendered directly to other members of the group; and (b) financial services provided indirectly through inter-company transactions. To qualify for coordination center status, the center must form part of an international group of affiliated companies with a very substantial aggregate capital and annual turnover. A coordination center may find a useful place in an international tax plan.
 

Comparable Uncontrolled Price (CUP)

A method employed for transfer pricing purposes in order to determine the price that is charged by similar companies selling the same or similar products in the same or similar circumstances.
 

Internet as a Research Tool

The Internet is the greatest advance in the communication of information since the telephone and the fax machine. Never before has so much information been so readily available to so many people. However, like any other research tool, the Internet has its strengths and its weaknesses. Even Government and Revenue websites need to be watched for accuracy and for how current they actually are. This inevitably creates problems for the international tax planner seeking information both where onshore jurisdictions and tax havens or international offshore financial centers (IOFCs) are concerned
 

Headquarters Office

Headquarters offices may be defined as offices that belong to an enterprise or an international group of enterprises, that are situated abroad, and that exercise certain management, co-ordination, and control functions for the sole or principal benefit of the enterprise or group. Headquarters offices may benefit from a favourable tax regime even in an otherwise high tax jurisdiction, thus enabling them to function as if they are in a tax haven or an international offshore financial center (IOFC). Operational headquarters providing management, technical, or other supporting services to subsidiaries and/or associated companies in other countries may also benefit from favored tax treatment, thus favoring the international tax plan.
 
 
 
 
 
 
 
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