Finland and Vietnam sign tax agreement


The Minister for Foreign Trade Kimmo Sasi signed a tax agreement between Finland and Vietnam in Helsinki 21 November on avoiding double taxation and preventing tax evasion.

The agreement was concluded during the visit to Finland by the Vietnamese Deputy Prime Minister Ngueyn Manh Camin. The Deputy Minister for Planning and Industry Vu Huy Hoang signed the agreement on behalf of the government of Vietnam.

The agreement is based with some exceptions on a model agreement drawn up by the OECD. The agreement contains regulations whereby state parties have the right to tax different incomes, while others would rescind the right to impose taxation, according to its legislation, or would otherwise ensure tax relief. The point is to prevent a situation of double taxation.

In addition, the agreement includes regulations on banning discrimination and the exchange of tax information.

The agreement will make investments easier between the two signatories and more generally strengthen economic relations between them. Finland is particularly intent on safeguarding its industry with the operational preconditions contained in the agreement. Finland signed a treaty on investments with Vietnam in 1993, which cane into force in 1996.

Though trade between the two countries is fairly modest, Vietnam’s share of Finnish foreign trade has been rising steadily since the mid-1990s. Finnish exports to Vietnam rose last year to about FIM 113 million. Imports from Vietnam were FIM 180 million.

Machinery and technical equipment form the main share of Finnish exports to Vietnam. Most of this – 54% – is electrical machinery and equipment, while 7% comprises power engines and motors. Over 80% of imports from Vietnam comprise footwear, clothing and furniture.

Finnish firms in Vietnam work in the telecommunications, energy maintenance, health care and road construction sectors. The most favourable opportunities for Finnish firms are seen as being in the areas of forestry, wood processing, energy, health care and telecommunications.

Development cooperation between Finland and Vietnam began in 1974. The main development projects undertaken have been the Pha Rung dockyard and the Hanoi city water project.

Further information available from: Counsellor Jukka Nystén ([email protected]) tel: 1341 5071