The income tax treaty between Vietnam and France does not provide any provisions for the taxation of interest derived from transactions of loans. Recently Vietnam has provided guidelines on certain tax provisions of the treaty.
According to the treaty French enterprises’ Interest income derived from loans repurchased from their branches in Vietnam would be recognized as “other income” and would be subject to the rules under Article 20 and if the interest income is achieved through a permanent establishment in Vietnam that would be taxable in Vietnam only.
