Cyprus and Vietnam further strengthened their bilateral ties on Wednesday with the signing of a double tax treaty.

The agreement, signed at the finance ministry in Nicosia, aims to boost economic cooperation and prevent tax evasion on income taxes.

The agreement was signed by Finance Minister Makis Keravnos and Vietnam’s Deputy Minister of Finance Cao Anh Tuan.

“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,” Keravnos said after the signing.

He stressed that the agreement represents an important step that “highlights the excellent bilateral relations between the two countries and the mutual desire for even closer cooperation on such a significant issue”.

He added that the convention will provide tax certainty to companies, organisations and individuals regarding the tax treatment of income and capital gains.

“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,” Keravnos said.

From the Vietnamese side, Cao Anh Tuan said that the signing marked an important milestone in strengthening economic and financial cooperation between the two countries.

He pointed out that this year marks 50 years of diplomatic relations between Vietnam and Cyprus, adding that economic and trade relations have recorded positive growth, with bilateral trade volume reaching $111.6 million.

“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 said, adding that Vietnam is also gradually expanding its investment presence in Cyprus.

He underlined that Cyprus, with its advantages in tourism, financial services, ports and logistics, as well as its role as a bridge linking the Middle East, southern Europe and North Africa, has significant prospects to become an even more important partner for Vietnam in the coming years.

What is more, the deputy minister said that Vietnam has concluded 80 double taxation agreements with other countries and that the agreement with Cyprus is 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 mentioned that Vietnam has concluded 19 free trade agreements with other countries and partners, including three new 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 his country fully aligns with the view of the Cypriot finance ministry that the agreement establishes a transparent and stable legal framework, in line with international practice.

He explained that this will help strengthen investment, trade and services flows between Vietnam and Cyprus and safeguard the legitimate interests of business communities as they grow.

Referring to the meeting that preceded the signing ceremony with the finance minister and the ministry’s director general, he expressed confidence 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”.

The Vietnamese deputy minister also said he hoped that the friendship and cooperation between Vietnam and the Republic of Cyprus would continue to develop sustainably, delivering tangible benefits to the peoples of both countries.

Invited to comment further on the agreement, Keravnos described it as a particularly important commercial agreement.

He said Vietnam is a significant country for Cyprus, pointing out that Cypriot businesses are active there, particularly in the pharmaceutical sector, while around 4,000 Vietnamese nationals are working in Cyprus.

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