Vietnam's Ministry of Finance has issued Circular No. 95/2026/TT-BTC, effective from 1 July 2026, introducing updated guidance on the application of Double Taxation Agreements (DTAs), Mutual Agreement Procedures (MAP), and Advance Pricing Arrangements (APA), while replacing two earlier circulars.
The Vietnamese Ministry of Finance has issued Circular No. 95/2026/TT-BTC, effective from 1 July 2026, setting out comprehensive guidance on the implementation of Double Taxation Agreements (DTAs), Mutual Agreement Procedures (MAP), and Advance Pricing Arrangements (APA).
The Circular replaces Circular No. 205/2013/TT-BTC and Circular No. 45/2021/TT-BTC and establishes updated rules on treaty application, dispute resolution, transfer pricing arrangements, and taxpayer obligations.
Scope and general principles
The Circular confirms that where a tax treaty conflicts with domestic tax legislation, the provisions of the applicable treaty take precedence. However, applying a treaty cannot create a tax liability that does not exist under domestic law or increase a taxpayer’s tax burden beyond what Vietnamese legislation prescribes.
Terms that are not defined in a treaty are to be interpreted under Vietnamese tax law. If neither the treaty nor domestic legislation defines a term, the competent authorities of the contracting states are required to negotiate a common interpretation.
For Vietnam, the Minister of Finance or an authorised representative, typically the General Department of Taxation, serves as the country’s “Competent Authority” for treaty administration.
Double taxation agreements
The Circular sets out detailed conditions for claiming treaty benefits and determining tax residency for both individuals and organisations.
For individuals, residency is assessed based on factors including permanent home, centre of vital interests, habitual abode and nationality. For organisations, residency is determined by the place of establishment, head office or place of effective management.
The guidance also strengthens the application of the beneficial ownership requirement. Tax authorities may deny treaty benefits where an applicant is not considered the beneficial owner of the income, including cases where the recipient acts as an agent or nominee or transfers more than 50% of the income to a third-country resident within 12 months.
The Circular also updates the definition of a Permanent Establishment (PE), covering fixed places of business such as branches, offices and factories, construction sites or projects exceeding the applicable treaty threshold, and dependent agents that habitually conclude contracts on behalf of foreign enterprises.
Tax treatment of specific income
The guidance provides detailed rules for several categories of income covered by tax treaties:
| Income category | General treaty treatment |
| Immovable property | Taxed in the country where the property is located |
| Business profits | Taxable in Vietnam only where the foreign enterprise has a PE in Vietnam |
| International transport | Income from ships and aircraft in international traffic is generally exempt or subject to reduced taxation in the host country |
| Dividends, interest and royalties | Subject to treaty-specific maximum withholding tax rates |
| Capital gains | Rules apply to gains from immovable property, business assets and shares, particularly where company value is mainly derived from immovable property |
To eliminate double taxation, Vietnam continues to apply the Tax Credit Method. Tax paid in a treaty partner jurisdiction may be credited against Vietnamese tax liability, provided the credit does not exceed the Vietnamese tax payable on the same income.
Mutual Agreement Procedure
The Circular provides updated guidance on the Mutual Agreement Procedure (MAP), which allows taxpayers to seek relief when they believe taxation is inconsistent with a tax treaty.
Applications may be refused if they are submitted more than three years after the first notification of the disputed tax action, or two years where specified by the applicable treaty. Requests may also be rejected where tax evasion is involved.
The MAP process includes receiving the application, reviewing the case, negotiating with the foreign competent authority and implementing any agreement reached.
The Circular also confirms Vietnam’s commitment to exchange tax information with treaty partners through exchanges on request, automatic exchanges and spontaneous exchanges, subject to confidentiality requirements.
Advance Pricing Arrangements
The Circular sets out updated procedures for Advance Pricing Arrangements (APA), allowing taxpayers engaged in related-party transactions to agree transfer pricing methods with tax authorities before filing tax returns.
Three types of APA are available:
- Unilateral APA between the Vietnamese tax authority and the taxpayer.
- Bilateral APA involving Vietnam and one foreign tax authority.
- Multilateral APA involving multiple tax authorities.
Eligible transactions must be genuine, ongoing and transparent, and must not already be subject to tax disputes.
Taxpayers are required to submit Form 01/APA-ĐN together with supporting documentation. The tax authority will assess the proposed transfer pricing methodology, comparable data and critical assumptions before reaching an agreement.
An APA is generally valid for up to three tax years. The Circular also permits a rollback of up to five previous tax years where business activities and relevant facts remain substantially unchanged.
Taxpayers operating under an APA must submit annual compliance reports and promptly notify the tax authority of significant business changes that could affect the agreement.
Taxpayer rights and obligations
The Circular outlines both the rights and responsibilities of taxpayers participating in treaty procedures.
Taxpayers are entitled to receive guidance from tax authorities, withdraw MAP or APA applications before an agreement is signed, and engage independent experts for professional advice.
They are also required to provide complete, accurate and timely information, maintain supporting records and cooperate fully during reviews. Applications for both MAP and APA are generally expected to be submitted electronically.
The Circular took effect on 1 July 2026 and establishes the framework governing Vietnam’s implementation of tax treaties, dispute resolution mechanisms and advance transfer pricing agreements, replacing the country’s previous guidance in these areas.
