Cyprus and Vietnam Cement Economic Ties with Double Taxation Agreement

Cyprus and Vietnam took another significant step in deepening their bilateral relationship on Wednesday, signing a double taxation avoidance agreement aimed at enhancing economic cooperation and curbing tax evasion related to income taxes.

The agreement was formalised at the finance ministry in Nicosia and was signed by Cyprus’ Finance Minister Makis Keravnos and Vietnam’s Deputy Minister of Finance Cao Anh Tuan.

The convention is designed to provide greater clarity and security for businesses and individuals operating between the two countries, while encouraging cross-border investment and trade.

Following the signing, Keravnos underlined the broader importance of the agreement, stating: “The signing of the agreement will undoubtedly strengthen the economic and political relations of the Republic of Cyprus with Vietnam, a country geographically distant from Cyprus but one with shared values, common goals and a willingness to cooperate in the economic sector.”

He added that the convention marks a meaningful development that “highlights the excellent bilateral relations between the two countries and the mutual desire for even closer cooperation on such a significant issue.”

Keravnos also emphasised the practical benefits of the treaty, noting that it would offer predictability and reassurance to economic actors. “He added that the convention will provide tax certainty to companies, organisations and individuals regarding the tax treatment of income and capital gains.”

Expanding on this point, the finance minister said: “I believe that it will strengthen our economic and trade ties, give impetus to the promotion of mutual investments and enhance our cooperation on tax matters, without creating opportunities for non taxation or reduced taxation through tax avoidance, providing an appropriate framework of stability and security for businesses and individuals, to the benefit of both countries.”

From the Vietnamese side, Cao Anh Tuan described the agreement as a landmark in bilateral cooperation, saying that the signing represented “an important milestone in strengthening economic and financial cooperation between the two countries.”

He noted that 2025 marks half a century of diplomatic relations between Vietnam and Cyprus, adding that commercial exchanges between the two nations have been steadily expanding, with bilateral trade reaching $111.6 million. He also highlighted the growing investment footprint of Cyprus in Vietnam, stating: “Cyprus currently has 28 investment projects in Vietnam, with total registered capital approaching $470 million, mainly in the sectors of real estate, manufacturing and agriculture.” He added that Vietnam is likewise gradually increasing its investments in Cyprus.

Tuan went on to stress Cyprus’ strategic advantages, pointing to its strengths in tourism, financial services, ports and logistics, as well as its geographic position linking the Middle East, southern Europe and North Africa. These factors, he said, give Cyprus strong potential to become an even more significant partner for Vietnam in the years ahead.

The deputy minister also placed the agreement within Vietnam’s broader international tax policy framework, noting that the country has already concluded 80 double taxation treaties worldwide, with the agreement signed with Cyprus being the 81st. “In this context, the signing of the double taxation avoidance agreement is not only proof of our shared commitment to cooperation, but also a symbol of the friendship between our two countries,” Tuan said.

He further highlighted Vietnam’s extensive trade network, mentioning that the country has signed 19 free trade agreements with various partners, including three next-generation agreements, among them the EU–Vietnam free trade agreement. “These agreements will contribute to the promotion of cooperation in trade, investment and other sectors,” he said.

Tuan said Vietnam fully shares the Cypriot finance ministry’s view that the new agreement creates a clear and stable legal framework aligned with international standards. He explained that this would support stronger flows of investment, trade and services between the two countries while protecting the legitimate interests of business communities as they expand.

Referring to discussions held prior to the signing with the finance minister and the ministry’s director general, Tuan expressed optimism about the future, saying that “with the solid foundations of cooperation we have, today’s signing of the agreement will lead economic and financial ties between Vietnam and Cyprus to a deeper and more substantive level.”

He also voiced hope that bilateral relations would continue to grow in a sustainable manner, delivering concrete benefits to citizens in both countries.

Invited to comment further, Keravnos described the treaty as a particularly significant commercial agreement. He characterised Vietnam as an important partner for Cyprus, noting that Cypriot companies are already active there, especially in the pharmaceutical industry, and that approximately 4,000 Vietnamese nationals are currently employed in Cyprus.

“The prospects are also very good, especially in the information technology sector for joint investments and exports,” he said.

Concluding his remarks, Keravnos said: “It is a large country, a country with which we traditionally maintain good relations and a country that supported us also with regard to our national problem.”

By fLEXI tEAM