An Exchange of Notes amending the comprehensive double taxation agreement between Australia and Vietnam entered into force on 23 July 1997 upon completion of the notifications required indicating that the necessary procedures to give the Notes the force of law in each country had been completed.
The Exchange of Notes took place in Canberra on 22 November 1996. Details of the Notes were announced by the Treasurer at that time and legislation providing for the Notes to be given the force of law in Australia - the International Tax Agreements Amendment Act (No.1) 1997 - received the Royal Assent on 18 June 1997.
The Notes give practical effect to the undertakings given by Australia to the Vietnamese Government at the time when the double taxation agreement was negotiated in 1992 that Australia would grant tax sparing credits to Australian taxpayers for Vietnamese tax forgone under specified Vietnamese tax incentives, subject to certain safeguards.
The Notes will have effect in Australia for Australian tax purposes in respect of relevant income derived on or after 1 July 1993.
The general effect of the tax sparing credits is that the Vietnamese tax forgone will be treated as if it had been paid for purposes of determining the foreign tax credits to which Australian taxpayers may be entitled in respect of that income.
Formal notification of the entry into force of the Exchange of Notes was published in the Gazette on 22 October 1997.
CANBERRA
6 November 1997
Contact:
Ken Allen (Australian Taxation Office) (02) 6216 1155