ARTICLE 26
EXCHANGE OF INFORMATION

1.         The competent authorities of  the  Contracting State shall exchange such information as is necessary for carrying out the provisions of this Convention or of  the domestic laws of the Contracting States concerning  taxes covered  by the Convention  insofar as the taxation  thereunder  is  not  contrary  to  the  Convention.   Any  information  received  by a Contracting  State  shall  be treated  as  secret  in the same  manner  as  information  obtained under the domestic laws of that State and  shall  be  disclosed only to persons or  authorities  (including  courts   and  administrative  bodies)  involved  in  the assessment  or  collection of, the enforcement  or  prosecution  in  respect  of,  or  the determination  of  appeals  in  relation  to,  the taxes  covered  by  the Convention.   Such persons or authorities shall  use  the  information  only for such  purposes.  They may  disclose  the  information  in  public  court  proceedings  or  in  judicial decisions.

2.         In no case shall the provisions of  paragraph 1 be construed so as to impose on a Contracting State the obligation:

            (a)        to carry out administrative  measures at  variance with the

                         laws and  administrative practice of  that or of  the other

                         Contracting State;

            (b)        to   supply  information  which  is  not obtainable under the

                         laws or in the normal course of the administration of that or

                         of  the other Contracting State;

            (c)        to supply  information   which  would  disclose  any  trade, 

                         business,   industrial, commercial or professional secret or

                         trade process, or information, the disclosure of  which  would

                         be contrary to public  policy (ordre public).

ARTICLE 27
DIPLOMATIC AGENTS AND CONSULAR OFFICIALS

            Nothing in this Convention shall affect the  fiscal  privileges  of  diplomatic agents or  consular officials under the general rules of international law or under the provisions of special agreements.

ARTICLE 28
ENTRY INTO FORCE

1.         This   Convention   shall   be  ratified  and  the  instruments of ratification shall be exchanged at Bangkok as  soon as possible.

2.         The  Convention  shall  enter into  force  upon  the  exchange  of  instruments of  ratification  and  its  provisions shall have effect:

            (a)        in respect of taxes withheld at the source,  on amounts paid

                         or remitted on or after the first day of January next following

                         that in  which the exchange of  instruments of ratification

                         takes place;

            (b)        in  respect  of  other  taxes on  income,  for  taxable   years  

                         or   accounting   periods beginning  on  or after the  first  day 

                         of  January  next following that in  which  the exchange  of 

                          instruments  of  ratification takes place.

ARTICLE 29
TERMINATION

            This  Convention   shall   remain   in  force  indefinitely,  but either of the Contracting States  may,  on  or  before 30th June in any calendar  year  beginning  after  the expiration of a period of five years from  the  date  of  its  entry  into  force,  give  to  the   other Contracting  State, through diplomatic channels,  written notice of termination.

            In such event the Convention shall cease to have effect:

            (a)        in respect of taxes withheld at the  source,   on amounts paid

                         or remitted on or after  the first day of January next following

                         that  in  which the notice is given;

            (b)        in respect  of  other taxes  on   income,  for  taxable   years  

                         or   accounting  periods beginning  on  or  after the  first  day 

                         of  January  next  following that in  which  the notice is given.

            IN   WITNESS   WHEREOF,  the   undersigned   duly  authorized thereto, have signed this Convention.

            Done  in duplicate at Madrid on  this 14th day  of October 1997,  each  in the Thai, Spanish and  English  languages, all texts being equally authoritative,  except  in the case of doubt when the English text shall prevail.

PROTOCOL

            At  the  signing of the Convention  between  the   Kingdom  of  Spain and the Kingdom of  Thailand  for  the  Avoidance of Double Taxation and the Prevention of Fiscal  Evasion with  spect to Taxes on Income, the  undersigned  have  agreed  upon the following provisions  which  shall form an integral part of the Convention:

1.         With reference to paragraph 1 (d) of  Article  3,  the  term  "person", in the case  of  Thailand,  also  includes an undivided estate.

2          (1)        With reference to paragraph 4 of Article 5,  if  a  person who is a

                        resident of a  Contracting  State,  provides  a  warehouse or any facilities in 
                        one  of  the Contracting  State  for other persons to store  goods  or 
                        merchandise,  he  shall  be deemed to be  carrying  on  a  business  in that
                        Contracting State through  a  permanent establishment.

            (2)        With reference to paragraph 4 (a) and  (b) of Article 5, it is understood that
                        the use of facilities for  delivery shall be deemed to constitute  a  permanent
                        establishment if they are used as a sale outlet.

3.         With reference to paragraph 7 of Article 5 of  the  Convention, the term " a broker, general  commission agent  or  any other agent of an independent  status"  is  understood not to include a person who is engaged in  one of   the  Contracting  States  in  such   activities   as prescribed in sub-paragraph (a), (b) or (c) of  paragraph  5  of the said Article wholly or almost wholly for or  on  behalf of an enterprise of the other Contracting State or for or on behalf of such enterprise and other enterprises  which are controlled by or have a controlling interest in such enterprise.

4.         With  reference  to  subparagraphs  (b)  and   (c)  of  paragraph  1  of  Article  7,  it  is understood that:

            (1)        in  the  case of  doubt,  the  competent authorities  of the  Contracting 
                        States  shall consult with each other to  arrive at  a satisfactory solution 
                        as  regards  the   similarity   of   the   goods   or  merchandise  or the business
                        activities mentioned in the said subparagraphs;

            (2)        losses  arising in connection  with  the sales or business activities referred
                        to in the above subparagraphs shall also be taken into account when
                        determining  the  profits of the permanent establishment.

5.         With reference to paragraph 2 of Article  8,  it is understood that the lesser of the tax rate  applied by  the  Contracting  States  on  income  derived  by  an  enterprise  of  any other country from the  operation  of  ships in international traffic shall be extended  through mutual agreement between the competent authorities.

6.         With reference to paragraph 5 of Article  10,   if   after  the  signature  of  this  Convention  either Contracting State concludes a Convention to avoid  double  taxation  with  another  country, in  which  the  tax  on  disposal of profits referred to in such paragraph, is not applicable,  such an exemption shall be  granted  through mutual agreement between the competent authorities of the two Contracting States.

7.         With  reference  to paragraph 2  of  Article 12, the royalties received in consideration of  financial leasing  means the amount received in  consideration  for the use of, or the right to use, industrial,  commercial,  or  scientific equipment where the lessee has the  option at  the  end  of the contract to buy  the  equipment,  to continue leasing or to terminate the contract.

            IN  WITNESS  WHEREOF, the  undersigned,  duly  authorized  thereto, have signed this Protocol.

            Done  in duplicate at Madrid on  this 14th day  of October 1997,  each  in the Thai, Spanish and  English  languages.

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