On Wednesday, 20 June, the Saeima adopted in the second and final reading a draft law ratifying the Latvia-Vietnam agreement on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income, and the accompanying protocol. The new law will henceforth provide a stable taxation regime for Latvian entrepreneurs working in Vietnam, ensuring that they will not be affected by Vietnamese legislative changes.

The agreement aims to prevent tax evasion by businesses on both sides. The agreement serves as a legal basis for cooperation between the tax administrations of Latvia and Vietnam, establishing a regular exchange of information between them.

Until now, the lack of this information exchange encumbered the taxation of income that citizens of both countries earned abroad, and there were obstacles to implementing several special national tax legislation norms.

With the agreement coming into force, the investors from both countries will have a more stable taxation regime in the other country in regard to, for example, corporate income, dividends, interest, royalties and remuneration for technical services.

Saeima Press Service