As an indication, it should be noted that the purpose of the double taxation agreement between Vietnam and Singapore is to eliminate double taxation without creating opportunities for non-taxation or taxation reduced by tax evasion or tax evasion (including contractual shopping agreements). Nevertheless, the additional intention of Singapore and Vietnam in the conduct of the contracts was to develop economic relations and improve tax cooperation between the two countries. Indeed, the double taxation contract between Vietnam and Singapore was generally seen as an advantageous advantage over other contracts. This favourable tax environment has made Singapore a preferred location for business vehicles that enable cross-border investment in Southeast Asia. Permanent Establishment “With respect to the taxation of interest under section 11, paragraph 2, the same lower rate applies for the purposes of Article 11, paragraph 2, where Vietnam provides for a rate of less than 10% on the gross interest rate in an agreement to avoid double taxation with another state.” January 16 – On 12 September 2012, Singapore`s Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam and Vietnamese Finance Minister Vuong Dinh Hue signed a second protocol amending the existing Double Taxation Convention (DBA) between the two countries. The DBA came into force on 11 January 2013 in Singapore and comes into force in Vietnam on 1 January 2014. For more information or to contact the company, please email, see or download the company brochure. Interest and royalties In Singapore, interest and dividends are taxed at a tax rate of 15-10%, while in Vietnam a rate of 5 to 10% is applied. According to the Vietnamese DTT of Singapore, interest and royalties collected in both Vietnam and Singapore and paid to a resident of the other state are taxed at a rate of 10% in that second state. Under certain conditions, these interest/royalties may be collected from the State in which they are generated: i) If the beneficiary of the interest is the beneficial owner, the tax thus collected may not exceed 10% of the gross amount of interest.