ARTICLE 11
INTEREST 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State. 2. However, (a) interest arising in Thailand may be taxed according to the laws of Thailand but if the recipient is a resident of Malaysia, the tax so charged shall not exceed: (i) 10 per cent of the gross amount of the interest if it is received by any financial institution (including an insurance company); (ii) in all other cases, 25 per cent of the gross amount of the interest; (b) interest arising in Malaysia may be taxed according to the laws of Malaysia, but if the recipient is a resident of Thailand, the tax so charged shall not exceed 15 per cent of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to the Government of the other Contracting State shall be exempt from tax in the first-mentioned Contracting State. 4. For the purposes of paragraph 3, the term "Government" (a) in the case of Malaysia, means the Government of Malaysia or any State Government and shall include: (i) the Bank Negara Malaysia; (ii) the local authorities; and (iii) such institutions, the capital of which is wholly owned by the Government of Malaysia or any State Government or any local authorities, as may be agreed from time to time between the Governments of the two Contracting States; (b) in the case of Thailand, means the Government of the Kingdom of Thailand and shall include: (i) the Bank of Thailand; (ii) the local authorities; and (iii) such institutions, the capital of which is wholly owned by the Government of the Kingdom of Thailand or any local authorities, as may be agreed from time to time between the Governments of the two Contracting States. 5. The provisions of paragraphs 1 and 2, shall not apply if the recipient of the interest is a resident of a Contracting State and has in the other Contracting State in which the interest arises a permanent establishment with which the debt-claim in respect of which the interest arises effectively connected. In such a case, the provisions of Article 7 shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political subdivision, a local authority or a resident of that Contracting State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and that interest is borne by that permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 7. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. 8. The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as income assimilated to income from money lent by the taxation laws of the Contracting State in which the income arises. ARTICLE 12
ROYALTIES 1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State. 2. However, such royalties may be taxed in the Contracting State in which they arise, and according to the laws of that Contracting State, but if the recipient is a resident of the other Contracting State, the tax so charged shall not exceed 15 per cent of the gross amount of the royalties. 3. Notwithstanding the provisions of paragraph 2, approved industrial royalties derived from Malaysia by a resident of Thailand shall be exempt from Malaysian tax. 4. The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of or the right to use, any copyright of literary, artistic or scientific work, patent, trade mark, design or model, plan, secret formula or process, or for the use of, or right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. The term, however, does not include any royalty or other amount paid in respect of motion picture films or of tapes for radio or television broadcasting, or of the operation of a mine, oil well, quarry or any other place of extraction of natural resources or of timber or other forest produce. 5. The term "approved industrial royalties" means royalties as defined in paragh 4 which are approved and certified by the competent authority of Malaysia as payable for the purpose of promoting industrial development in Malaysia and which are payable by an enterprise which is wholly or mainly engaged in activities falling within one of the following classes: (a) manufacturing, assembling or processing; (b) construction, civil engineering or shipbuilding; or (c) electricity, hydraulic power, gas or water supply. 6. Income derived from the alienation of rights or property mentioned in paragraph 4 may be taxed in the Contracting State in which such income arises, but the tax which it imposes shall not exceed 15 per cent of the gross amount thereof. 7. The provisions of paragraphs 1,2,3 and 6 shall not apply if the recipient of the royalties or income, being a resident of a Contracting State, has in the other Contracting State in which the royalties or income arise a permanent establishment with which the right or property giving rise to the royalties or income is effectively connected. In such a case, the provisions of Article 7 shall apply. 8. Royalties or income mentioned in paragraph 6 shall be deemed to arise in a Contracting State if the payer is that Contracting State itself, a political subdivision, a local authority or a resident of that Contracting State. Where, however, the person paying such royalties or income, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation to pay the royalties or income was incurred, and those royalties or income are borne by that permanent establishment, then such royalties or income shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 9. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties or income paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. ARTICLE 13
GAINS FROM THE ALIENATION OF PROPERTY 1. Gains from the alienation of immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such property is situated. 2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing professional services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base may be taxed in the other Contracting State. However, gains from the alienation of ships or aircraft operated by an enterprise of a Contracting State in international traffic and movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the enterprise is a resident. 3. Gains from the alienation of any property or assets, other than those mentioned in paragraphs 1 and 2 of this Article and paragraphs 4 and 6 of Article 12 shall be taxable only in the Contracting State of which the alienator is a resident. Nothing in this paragraph shall prevent either Contracting State from taxing the gains or income from the sale or transfer of shares or other securities. ARTICLE 14
PERSONAL SERVICES 1. Subject to the provisions of Articles 15, 17, 18, 19 and 20 remuneration ( other than pensions) derived by a resident of a Contracting State in respect of personal (including professional) services shall be taxable only in that Contracting State in respect of personal (including professional) services shall be taxable only in that Contracting State unless services are performed in the other Contracting State. If the services are so performed, such the remuneration as is derived therefrom may be taxed in the other Contracting State. 2. Notwithstanding the provisions of paragraph 1, remuneration (other than pensions) derived by a resident of a Contracting State in respect of personal (including professional) services performed in any calendar year in the other Contracting State shall be taxable only in the first-mentioned Contracting State, if (a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned, and (b) the services are performed for or on behalf of a person who is a resident of the first-mentioned Contracting State, and (c) the remuneration is not borne by a permanent establishment which the person paying the remuneration has in the other Contracting State. 3. Notwithstanding the perceding provisions of this Article, remuneration in respect of an employment exercised on board a ship or aircraft operated in international traffic by an enterprise of a Contracting State, shall be taxable only in that Contracting State. ARTICLE 15
DIRECTOR'S FEES Director's fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the Board of Directors of a company which is a resident of the other Contracting State, may be taxed in that other Contracting State. | 
