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ARTICLE 23
Methods for Elimination of Double Taxation
(1) In Vietnam, double taxation shall be eliminated as follows:
- Where a resident of Vietnam derives income, profits or gains, or owns capital which under the law of the Czech Republic and in accordance with this Agreement may be taxed in the Czech Republic, Vietnam shall allow as a credit against its tax on that income, profits or gains or on that capital an amount equal to the tax paid in the Czech Republic. The amount of credit, however, shall not exceed the amount of the Vietnamese tax on that income, profits or gains or on that capital as computed before the credit is given in accordance with the taxation laws and regulations of Vietnam.
(2) In the Czech Republic, double taxation shall be eliminated as follows:
- (a) the Czech Republic, when imposing taxes on its residents, may include in the tax base upon which such taxes are imposed the items of income or capital which according to the provisions of this Agreement may also be taxed in Vietnam, but shall allow as a deduction from the amount of tax computed on such a base an amount equal to the tax paid in Vietnam. Such deduction shall not, however, exceed that part of the Czech tax, as computed before the deduction is given, which is appropriate to the income or capital which, in accordance with the provisions of this Agreement, may be taxed in Vietnam;
- (b) for the purpose of sub-paragraph (2)(a) of this Article, the income tax paid in Vietnam by a resident of the Czech Republic in respect of business profits earned through a permanent establishment situated in Vietnam shall be deemed to include any amount of tax which would have been payable as Vietnamese tax for any year but for an exemption from or a reduction of tax granted for that year or any part thereof as a result of the application of the provisions of Vietnamese Law designed to extend time-limited tax incentives to promote foreign investment for development purpose;
- (c) for the purpose of sub-paragraph (2)(a) of this Article, the tax paid in Vietnam respectively on dividends to which paragraph (2) of Article 10 applies, on interest to which paragraph (2) of Article 11 applies and on royalties to which paragraph (2) of Article 12 applies, shall be deemed respectively to be 10 per cent of the gross amount of such dividends, 10 per cent of the gross amount of such interest and 10 per cent of the gross amount of such royalties.