Vietnam has shown interest in negotiating a tax treaty and an investment protection agreement (IPA) with the Solomon Islands on 7 March 2025.
The proposed tax treaty would be the first between the two nations, designed to prevent double taxation and clarify taxation rules. Both agreements will need to go through negotiation, signing and ratification before they can take effect.
A tax treaty is a formal agreement between two or more countries to avoid double taxation on income earned across borders. It sets rules on how different types of income—such as business profits, dividends, interest, and royalties—should be taxed in each country. These treaties also aim to prevent tax evasion and provide mechanisms for resolving disputes. Many tax treaties are based on models like those developed by the OECD or the United Nations.
An Investment Protection Agreement is a treaty between two or more countries that provides legal protections for foreign investors. It typically includes provisions that ensure fair treatment, safeguard against expropriation without compensation, and allow investors to settle disputes through international arbitration. These agreements aim to create a stable and secure environment for foreign investment.
