Can I avoid double taxation if both Singapore and Vietnam tax my income?

Yes. The Singapore-Vietnam DTAA ensures double taxation is avoided through either exemption in one of the countries or a foreign tax credit in your country of residence, where you offset tax already paid in the source country. Both Singapore and Vietnam allow residents to claim a credit for foreign tax paid, which prevents the same income from being taxed twice. The guide above explains the specific provisions in detail.

Does the Singapore-Vietnam DTAA include transfer pricing rules?

The treaty does not contain a standalone transfer pricing article. However, it includes an Associated Enterprises article (Article 9, updated in the 2012 Protocol) and a Mutual Agreement Procedure (Article 26, further strengthened by the 2023 MLI), which allow both countries to resolve disputes arising from transfer pricing adjustments and eliminate resulting double taxation. Transfer pricing is otherwise governed by domestic laws in each country, including Singapore transfer pricing regulations and Vietnam's local requirements.

I am a Vietnamese citizen living and working in Singapore. Will Vietnam tax my Singapore income?

It depends on your Vietnamese tax residency status under Vietnam's domestic law; citizenship alone does not determine residency. If you are not a Vietnamese tax resident, Vietnam taxes only Vietnam-sourced income, so your Singapore salary, dividends, and capital gains are not taxed in Vietnam. If you are a Vietnamese tax resident, Vietnam taxes worldwide income: your Singapore salary would be taxable in both countries, but you can claim a foreign tax credit in Vietnam for tax already paid in Singapore; Singapore dividends are not subject to withholding tax, so Vietnam's domestic rules apply; capital gains may also be taxed depending on the asset type. The DTAA ensures relief from double taxation via credits.

How can I break Vietnamese tax residency while living in Singapore?

To avoid being taxed by Vietnam on worldwide income, you must cease being a Vietnamese tax resident under local law. Vietnam generally applies a 183-day test in a calendar year. To break residency, you should spend fewer than 183 days in Vietnam, avoid maintaining a residence in Vietnam, and reduce significant economic and personal ties (such as property, family presence, or long-term leases). Singapore applies its own rules for tax residency, generally requiring at least 183 days of presence in a calendar year or meeting Inland Revenue Authority of Singapore criteria.

Vietnam-Singapore DTAA: Tax Treaty Guide with Examples

The Double Taxation Avoidance Agreement (DTAA) between Singapore and Vietnam is designed to prevent individuals and companies from being taxed twice on the same income in both countries. For businesses engaged in cross-border trade and investment, and for individuals earning income in both jurisdictions, this treaty provides clear rules on which country has the primary taxing rights and how relief from double taxation is granted.

This guide explains the key provisions of the Singapore-Vietnam DTAA in practical terms, with examples to illustrate how different types of income are taxed. Whether you are a Singapore-based company expanding into Vietnam, or a Vietnamese entrepreneur investing in Singapore, understanding the treaty can help you plan tax-efficiently and avoid unnecessary liabilities.

If you are considering expanding your business into Singapore, a solid first step is setting up a local entity. For a detailed overview of the process, see our Singapore Company Registration guide.

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This article covers the following topics of the Singapore-Vietnam DTAA:

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Frequently Asked Questions about the Vietnam–Singapore DTAA

vietnam-singapore double tax treaty scope

Vietnam-Singapore DTAA: Purpose & Scope

The Singapore–Vietnam DTAA aims to eliminate the risk of the same income being taxed in both countries and to prevent fiscal evasion. It does this by allocating taxing rights between Singapore and Vietnam in a way that avoids overlapping tax claims. The agreement has also been updated through the Multilateral Instrument (MLI), which Vietnam ratified in May 2023 and Singapore in 2018, to include measures preventing treaty abuse and base erosion.

Persons Covered

The DTAA applies to persons who are residents of one or both contracting states (Article 1). This includes:

Individuals who are liable to tax in either Singapore or Vietnam based on criteria such as domicile, residence, place of management, or other similar grounds.
Companies and entities that are treated as taxable units under the respective domestic laws of each country.

Taxes Covered

Under Article 2 (as modified by the 2012 Protocol), the treaty applies to income taxes imposed by both countries:

In Singapore: Income tax.
In Vietnam: Personal income tax and business income tax.

The DTAA also applies to any identical or substantially similar taxes introduced after the agreement was signed.

The scope of the treaty covers a wide range of income sources, including business profits, dividends, interest, royalties, capital gains, director’s fees, income from independent and dependent services, pensions, government service remuneration, artistes’ and athletes’ income, and students’ or teachers’ income.

For a deeper understanding of the Singapore tax environment, you can explore our guides on the:

Vietnam-Singapore DTAA: Key Terms Defined

Understanding certain treaty terms is crucial for applying the Singapore–Vietnam DTAA correctly. The agreement (Articles 3–5) sets out the following definitions:

Person

Includes individuals, companies, or any other entities treated as a taxable persons under domestic laws (Article 3).

Tax Resident

A person is considered a resident of a contracting state if they are liable to tax there by reason of domicile, residence, place of management, or other similar criteria (Article 4). For individuals with ties to both countries, residency is determined through tie-breaker rules based on permanent home, centre of vital interests, habitual abode, or mutual agreement between authorities.

Permanent Establishment (PE)

A PE is a fixed place of business through which an enterprise carries out its activities in the other country (Article 5). Examples include a branch, office, factory, or workshop. Construction projects lasting more than six months, and service provision exceeding 183 days within a 12-month period, also create a PE under the 2012 Protocol. Preparatory or auxiliary activities, however, do not constitute a PE.

Withholding Tax

Certain types of cross-border income such as dividends, interest, and royalties may be taxed in the source country through withholding tax at rates capped by the treaty (Articles 10–12). The exact rate depends on the income type and the level of participation or ownership. For an overview of how Singapore applies such rules domestically, see our guide to the Singapore withholding tax system.

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Vietnam–Singapore DTAA: Tax on Business Profits

How business profits are taxed under the treaty

Under Article 7 of the Singapore–Vietnam DTAA, the profits of an enterprise are generally taxable only in the country where the enterprise is a resident. However, if the enterprise carries on business in the other country through a permanent establishment, then that other country may also tax the profits, but only to the extent attributable to the PE.

This principle ensures that companies are not taxed twice on the same business income unless they maintain a taxable presence in both countries.

Examples (Assuming S$500,000 Profit)

1. Singapore company earning from Vietnam (no PE in Vietnam)

Rule: Profits are taxable only in Singapore.
Tax: Vietnam cannot tax the income. The full S$500,000 is taxed under Singapore corporate tax rules (currently 17 percent headline rate, with partial exemptions and rebates possibly reducing the effective rate).

2. Singapore company earning from Vietnam (with PE in Vietnam)

Rule: Vietnam may tax the portion of profits attributable to the PE.
Tax: If the PE generates the full S$500,000, Vietnam taxes it under Vietnamese business income tax (currently 20 percent). Singapore then allows a foreign tax credit to relieve double taxation.

3. Vietnam company earning from Singapore (no PE in Singapore)

Rule: Profits are taxable only in Vietnam.
Tax: Singapore cannot tax the income. The full S$500,000 is taxed in Vietnam at 20 percent corporate tax (unless domestic exemptions apply).

4. Vietnam company earning from Singapore (with PE in Singapore)

Rule: Singapore may tax the portion of profits attributable to the PE.
Tax: If the PE generates the full S$500,000, Singapore taxes it at 17 percent. Vietnam then provides a foreign tax credit to avoid double taxation.

Vietnam–Singapore DTAA: Tax on Dividends

How dividends are taxed under the treaty

Article 10 of the Singapore–Vietnam DTAA sets limits on withholding tax for dividends. Dividends may be taxed in both the source and residence country, but the source country’s tax is capped as follows if the recipient is the beneficial owner:

5 percent of the gross dividend if the shareholder owns more than 50 percent of the capital or has invested more than US$10 million.
7 percent if the shareholder owns between 25 percent and 50 percent of the capital.
12.5 percent in all other cases.

In practice, Singapore does not levy withholding tax on outbound dividends. Vietnam does impose withholding tax, so the treaty primarily reduces the Vietnamese rate when dividends are paid to Singapore residents.

Examples (Assuming S$500,000 Dividends)

1.Dividends paid by a Singapore company to a Vietnam resident

Rule: Singapore does not impose withholding tax on dividends.
Tax: Vietnam taxes the dividends under its domestic rules, since Article 10 confirms Singapore cannot levy any additional tax. The Vietnam resident pays tax only in Vietnam, with no credit needed in Singapore.

2. Dividends paid by a Vietnam company to a Singapore resident

Rule: Vietnam may impose withholding tax, subject to DTAA caps.
Tax: On S$500,000 dividends:
- At 5 percent, tax is S$25,000 if the Singapore shareholder holds more than 50 percent or invested over US$10 million.
- At 7 percent, tax is S$35,000 if the shareholding is between 25 percent and 50 percent.
- At 12.5 percent, tax is S$62,500 in all other cases.
Singapore taxes worldwide income, but grants a credit for tax paid in Vietnam, ensuring no double taxation.

Vietnam–Singapore DTAA: Tax on Capital Gains

How capital gains are taxed under the treaty

Article 13 of the Singapore–Vietnam DTAA governs how gains from the sale of property or shares are taxed. The rules are as follows:

Gains from immovable property (for example, real estate) situated in one country may be taxed in that country.
Gains from movable property that forms part of a permanent establishment or a fixed base may be taxed in the country where the PE or fixed base is located.
Gains from ships or aircraft operated in international traffic are taxable only in the country of residence of the enterprise.
Under the 2012 Protocol, gains from the sale of shares in a company that derives more than 50 percent of its value from immovable property located in the other country may also be taxed in that other country.
All other gains are taxable only in the country of residence of the seller.
Examples (Assuming S$500,000 Capital Gain)

Sale of Vietnam shares by a Singapore resident
1. Rule: If the Vietnamese company derives more than 50 percent of its value from immovable property in Vietnam, Vietnam may tax the gain. Otherwise, only Singapore may tax it.
2. Tax: If Vietnam taxes at 20 percent, S$100,000 is payable. Singapore allows a foreign tax credit, avoiding double taxation. If the shares are not property-rich, the gain is taxed only in Singapore.
Sale of Singapore shares by a Vietnam resident
1. Rule: Singapore taxes capital gains only in limited cases, and does not have a general capital gains tax. Under the DTAA, the sale of Singapore shares is taxable only in Vietnam, unless the shares derive more than 50 percent of their value from Singapore immovable property.
2. Tax: In most cases, the full S$500,000 is taxed in Vietnam at 20 percent (S$100,000). No tax is imposed in Singapore unless the immovable property rule applies.

Vietnam–Singapore DTAA: Tax on Interest Income

How interest income is taxed under the treaty

Article 11 of the Singapore–Vietnam DTAA provides that interest income may be taxed in both the source and residence country. However, the withholding tax in the source country is capped at 10 percent of the gross amount, provided the recipient is the beneficial owner.

Special exemptions apply where interest is paid to the Government, central banks, or approved institutions of either country. In those cases, no withholding tax is charged in the source country.

Examples (Assuming S$100,000 Interest Income)

Interest paid by a Singapore company to a Vietnam resident
1. Rule: Interest arises in Singapore. Singapore may levy withholding tax, capped at 10 percent under the treaty.
2. Tax: On S$100,000, Singapore withholds S$10,000. The Vietnam resident declares the full amount in Vietnam and receives a tax credit for the S$10,000 withheld in Singapore.
Interest paid by a Vietnam company to a Singapore resident
1. Rule: Interest arises in Vietnam. Vietnam may levy withholding tax, capped at 10 percent under the treaty.
2. Tax: On S$100,000, Vietnam withholds S$10,000. The Singapore resident declares the full amount in Singapore and receives a tax credit for the S$10,000 withheld in Vietnam.

Vietnam–Singapore DTAA: Tax on Royalties

How royalty income is taxed under the treaty

Under Article 12, royalties may be taxed in both the source and residence country. The DTAA caps the withholding tax rates in the source country as follows, provided the recipient is the beneficial owner:

5 percent for royalties paid for the use of, or the right to use, patents, designs, models, plans, secret formulas or processes, industrial, commercial, or scientific equipment, or information concerning industrial, commercial, or scientific experience.
10 percent in all other cases (the 2012 Protocol reduced the general rate from 15 percent to 10 percent).

Examples (Assuming S$100,000 Royalty Payment)

1.Royalty paid by a Singapore company to a Vietnam resident

Rule: Royalties arise in Singapore. Singapore may levy withholding tax, capped at 5 percent or 10 percent depending on the type of royalty.
Tax: On S$100,000, Singapore withholds either S$5,000 (if for patents, know-how, or equipment use) or S$10,000 (for other royalties). The Vietnam resident reports the income in Vietnam and claims a credit for the tax withheld in Singapore.

2. Royalty paid by a Vietnam company to a Singapore resident

Rule: Royalties arise in Vietnam. Vietnam may levy withholding tax, capped at 5 percent or 10 percent depending on the type of royalty.
Tax: On S$100,000, Vietnam withholds either S$5,000 or S$10,000. The Singapore resident reports the income in Singapore and claims a credit for the tax withheld in Vietnam.

Vietnam–Singapore DTAA: Tax on Personal Services

How Independent Services are taxed under the treaty

Article 14 covers income from professional or technical services carried out by individuals, such as physicians, lawyers, engineers, or consultants. The general rule is that such income is taxable only in the country of residence. However, the other country may also tax the income if:

The individual has a fixed base regularly available in that country, or
The individual’s presence in that country exceeds 183 days within any 12-month period (as added by the 2012 Protocol).

In such cases, the income is taxable in the other country, but only to the extent attributable to the fixed base or to services performed during the period of stay.

Examples (Assuming S$100,000 Service Fee)

1.Services by a Singapore resident to a Vietnam company

Rule: If the Singapore individual does not stay in Vietnam for more than 183 days and has no fixed base, only Singapore taxes the income.
Tax: The full S$100,000 is taxed in Singapore.
If the individual works in Vietnam for more than 183 days or maintains a fixed base, Vietnam may tax the income. Singapore then grants a credit for the Vietnam tax paid.

2. Services by a Vietnam resident to a Singapore company

Rule: If the Vietnam individual does not stay in Singapore for more than 183 days and has no fixed base, only Vietnam taxes the income.
Tax: The full S$100,000 is taxed in Vietnam.
If the individual stays in Singapore for over 183 days or has a fixed base, Singapore may tax the income. Vietnam then grants a credit for the Singapore tax paid.

How Dependent Services are taxed under the treaty

Article 15 deals with employment income such as salaries, wages, and similar remuneration. The general rule is that employment income is taxable only in the employee’s country of residence, unless the employment is exercised in the other country. If the employment is exercised in the other country, that country may also tax the income.

There is an important exemption: if the employee is present in the other country for 183 days or less in a calendar year, the remuneration is paid by an employer who is not a resident of that other country, and the remuneration is not borne by a permanent establishment or fixed base in that other country, then the income remains taxable only in the employee’s country of residence.

Examples

1.Singapore resident employed in Vietnam

If the employee spends fewer than 183 days in Vietnam in a calendar year, and the salary is paid by a Singapore employer with no permanent establishment in Vietnam, only Singapore taxes the income.
If the employee works in Vietnam for more than 183 days, or if the salary is paid by a Vietnam entity or charged to a Vietnam permanent establishment, Vietnam may tax the income. Singapore then grants a credit for Vietnam tax paid.

2. Vietnam resident employed in Singapore

If the employee spends fewer than 183 days in Singapore in a calendar year, and the salary is paid by a Vietnam employer with no permanent establishment in Singapore, only Vietnam taxes the income.
If the employee works in Singapore for more than 183 days, or if the salary is paid by a Singapore entity or charged to a Singapore permanent establishment, Singapore may tax the income. Vietnam then grants a credit for Singapore tax paid.

Vietnam–Singapore DTAA: Tax on Director Fee

How director fee is taxed under the treaty

Article 16 of the Singapore–Vietnam DTAA provides that director’s fees and other similar payments are taxable in the country where the company paying the fees is a resident. This means the source country has the primary taxing right, regardless of where the director resides.

Examples (Assuming S$100,000 Director’s Fee)

1.Fee paid by a Singapore company to a Vietnam resident

Rule: Since the paying company is a Singapore resident, Singapore has the taxing right.
Tax: On S$100,000, Singapore taxes the income at resident or non-resident individual rates, depending on the director’s status. Vietnam may also tax its resident director on worldwide income, but a credit is allowed for the tax already paid in Singapore.

2. Fee paid by a Vietnam company to a Singapore resident

Rule: Since the paying company is a Vietnam resident, Vietnam has the taxing right.
Tax: On S$100,000, Vietnam taxes the director’s fee under its personal income tax system. Singapore may also tax its resident director on worldwide income, but a foreign tax credit is available for the Vietnam tax paid.

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Frequently Asked Questions about Singapore-Vietnam DTAA

Yes. The Singapore–Vietnam DTAA ensures that double taxation is avoided through either:

Exemption in one of the countries, or
Foreign tax credit in your country of residence, where you offset tax already paid in the source country.

Both Singapore and Vietnam allow their residents to claim a credit for foreign tax paid, which prevents the same income from being taxed twice. The guide above explains the specific provisions in detail.

The treaty does not contain a standalone article on transfer pricing. However, it includes an Associated Enterprises article (Article 9, updated in the 2012 Protocol) and a Mutual Agreement Procedure (MAP) (Article 26, further strengthened by the 2023 MLI). These allow the two countries to resolve disputes arising from transfer pricing adjustments and eliminate double taxation that could result.

Transfer pricing is otherwise handled under each country’s domestic laws. Singapore transfer pricing regulations require related-party transactions to follow the arm’s length principle, with detailed documentation and penalties for non-compliance. Vietnam also applies its own transfer pricing rules, which involve disclosure requirements and benchmarking based on local regulations.

It depends on your Vietnamese tax residency status under Vietnam’s domestic law. Citizenship alone does not determine residency.

If you are not a Vietnamese tax resident: Vietnam taxes only Vietnam-sourced income. Your Singapore salary, dividends, and capital gains are not taxed in Vietnam.
If you are a Vietnamese tax resident: Vietnam taxes worldwide income. Your Singapore salary would be taxable in both countries, but you can claim a foreign tax credit in Vietnam for tax already paid in Singapore. Singapore dividends are not subject to withholding tax, so Vietnam’s domestic rules apply. Capital gains may also be taxed depending on the asset type.

The DTAA ensures that any double taxation is relieved through credits.

Not directly. Residency is first determined under each country’s domestic law. The DTAA (Article 4) provides tie-breaker rules if a person is considered a resident of both countries:

Permanent home.
Centre of vital interests (personal and economic ties).
Habitual abode.
Nationality.
Mutual agreement between tax authorities.

These rules decide which country has treaty residency for DTAA purposes, without changing your obligations under domestic law.

To avoid being taxed by Vietnam on your worldwide income, you must cease being a Vietnamese tax resident under local law. Vietnam generally applies a 183-day test in a calendar year. To break residency, you should:

Spend fewer than 183 days in Vietnam.
Avoid maintaining a residence in Vietnam.
Cut significant economic and personal ties, such as property ownership, family presence, or long-term leases.

Singapore applies its own rules for tax residency, generally requiring at least 183 days of presence in a calendar year or meeting other Inland Revenue Authority of Singapore (IRAS) criteria.

This article is provided for general informational purposes only and does not constitute tax advice. You should consult with a qualified professional for advice tailored to your specific situation.

Author

Eddy Putra

Eddy has been in the corporate services industry for over 20 years. An experienced Chartered Accountant and alumnus of Deloitte Singapore, he has extensive expertise in corporate finance, tax, structuring, and regulatory compliance. Eddy specializes in advising global clients on business expansion and corporate migration to Singapore.

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