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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 State.

 

2.         However, such interest may also be taxed  in  the  Contracting  State in which it arises and according to  the  laws of that State, but if the recipient is the  beneficial owner of the interest, the tax so charged shall not exceed:

            (a)        10  per  cent  of  the  gross  amount  of  the  interest  if it is

                          received by  any  financial  institution (including an insurance

                          company);

            (b)        15  per  cent  of  the  gross  amount  of  the  interest in all

                          other cases.

 

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.

For  the purpose of  this  paragraph,   the   term  "Government" :

            (a)        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  or statutory

                                      bodies  thereof,  as may be agreed from time to time

                                      between  the  competent  authorities  of  the   two

                                      Contracting States;

            (b)        in the case of Luxembourg means the Government of the

                         Grand Duchy of Luxembourg  and  shall  include:

                         (i)         the local authorities ; and

                         (ii)        such institutions the capital of which  is wholly  owned

                                      by the Government of  the  Grand Duchy  of

                                      Luxembourg or any local  authorities or statutory

                                      bodies thereof, as may be  agreed from  time  to 

                                      time  between  the  competent  authorities of the two

                                      Contracting States.

 

4.         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.

 

5.         The  provisions of paragraphs 1 and 2  shall  not  apply  if  the beneficial owner of the  interest,  being  a  resident of a Contracting State, carries on business in the other  Contracting  State in which   the  interest  arises,  through  a  permanent establishment  situated  therein,  or performs in that other State independent personal  services  from  a fixed base situated therein, and the debt-claim  in  respect  of  which  the interest  is  paid  is  effectively  connected with:

 

            (a)        such permanent establishment or fixed base, or

            (b)        business  activities referred to under

            (c)  of   paragraph 1 of Article 7. 

In such cases the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

 

6.         Interest shall be deemed to arise in a Contracting  State  when  the  payer  is  that  State  itself,  a  local  authority or a resident of that 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 or a fixed base in connection  with   which  the indebtedness on which the interest is  paid  was  incurred,  and  such interest is borne  by  such  permanent  establishment  or fixed base, then such interest  shall  be  deemed  to  arise  in  the State  in  which  the  permanent establishment or fixed base is situated.

 

7.         Where, by reason of a special relationship between  the payer and the beneficial owner or between both of  them  and  some other person, the amount of the interest,  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  beneficial owner in the absence of such  relationship,  the  provisions  of this Article shall apply  only  to  the last-mentioned  amount.  In such 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 Convention.

 

 

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 State.

 

2.         However, such royalties may also be taxed in  the  Contracting State in which they arise and according to  the  laws of that State, but if the recipient is the  beneficial  owner of the royalties, the tax so charged shall not exceed  15 per cent of the gross amount of the royalties.     

 

3.         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  including  cinematograph films, or films or tapes used for radio or television broadcasting,  any  patent, trade mark,  design  or  model,   plan,  secret formula or process, or for the use of, or the  right   to  use,  industrial,  commercial,  or  scientific  equipment,   or  for  information  concerning   industrial,  commercial or scientific experience.

 

4.         The  provisions of paragraphs 1 and 2  shall  not  apply  if  the beneficial owner of the royalties,  being  a  resident of a Contracting State, carries on business in the  other  Contracting  State  in which  the  royalties  arise,  through  a  permanent establishment  situated  therein,  or performs in that other State independent personal  services  from  a  fixed  base situated therein,  and  the  right  or property  in  respect of which the royalties  are  paid  is  effectively connected with:

            (a)        such permanent establishment or fixed base, or

            (b)        business  activities referred to under (c)  of  paragraph 1 of

                         Article 7.   In  such  cases  the provisions of  Article  7  or 

                         Article 14, as the case may be, shall apply.

 

5.         Royalties  shall  be   deemed   to  arise   in   a  Contracting  State when the payer is that State  itself,  a  local  authority  or  a  resident  of  that  State.  Where,  however,  the person paying the royalties, whether he is  a  resident   of  a  Contracting  State  or  not,  has  in   a  Contracting   State  a permanent establishment or  a  fixed  base  in  connection with which the liability  to  pay  the royalties  was  incurred, and such royalties are  borne  by  such  permanent  establishment  or fixed  base,  then  such  royalties  shall be deemed to arise in the State  in  which  the permanent establishment or fixed base is situated.     

 

6.         Where, by reason of a special relationship between  the payer and the beneficial owner or between both of  them and some other person, the amount of the royalties,  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 beneficial owner in the  absence  of  such  relationship,  the provisions of this  Article  shall  apply only to the last-mentioned amount. In such 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 Convention.

 

7.         The  provisions of this  Article  shall  likewise  apply to gains from the alienation of any right or property giving rise to such royalties if such right or property  is  alienated  by  a  resident  of  a  Contracting  State   for  exclusive  use  in  the other  Contracting  State  and  the  payment  for  such  right  or  property  is  borne  by  an  enterprise  of  that  other  State  or  by  a  permanent establishment situated therein.

 

 

ARTICLE 13
CAPITAL GAINS

1.         Gains derived by a resident of a Contracting State from  the alienation of immovable property referred  to  in Article  6 and situated in the other Contracting State  may be taxed in that other State.

 

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  independent  personal services, including such  gains  from  the  alienation  of  such a  permanent establishment  (alone or  with  the  whole enterprise)  or of such a fixed base, may be taxed in  that other State.

 

3.         Gains derived by an enterprise of  a  Contracting  State from the alienation of ships or aircraft operated  in  international traffic or movable property pertaining to the  operation of such ships or aircraft, shall be taxable  only  in that State.

 

4.         Gains  from  the alienation of  any  property  or  assets, other than those referred to in paragraphs 1, 2 and  3  of this Article and paragraph 7 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
INDEPENDENT PERSONAL SERVICES

1.         Income  derived  by a resident  of  a  Contracting  State   in  respect  of  professional  services  or   other  activities  of  an independent character shall  be  taxable only  in that State except in the following  circumstances,  when such income may also be taxed in the other Contracting  State:

            (a)        if he has a fixed base available to him in the other 

                         Contracting  State for the  purpose  of  performing  his 

                         activities, for a  period  or  periods  amounting  to  or 

                         exceeding  in  the aggregate  183  days within  any  twelve-

                         month  period;  in  that case, only so  much  of  the income 

                         as is attributable to that fixed  base  may be taxed in that

                         other State; or

            (b)        if his stay in the other Contracting State  is for  a  period  or 

                         periods  amounting  to  or exceeding in the aggregate 183

                         days within any  twelve-month  period;  in that case,  only  so

                         much  of  the income as is  derived  from  his activities 

                         performed in that other State  may be taxed in that other

                         State; or

            (c)        if the remuneration for his activities in  the other Contracting

                        State is paid by a  resident of  that  Contracting State or is

                        borne  by  a  permanent   establishment  or  a  fixed base

                        situated  in that Contracting State;  in  that   case,  only so

                         much of the remuneration as  is derived  therefrom may be

                        taxed in that  other  State.

 

2.         The  term   "professional   services"  includes especially  independent  scientific,  literary,   artistic,  educational   or  teaching  activities  as  well   as   the   independent  activities of physicians,  dentists,  lawyers,  engineers, architects and accountants.

 

 

ARTICLE 15
DEPENDENT PERSONAL SERVICES

1.         Subject  to the provisions of Articles 16, 18  and  19, salaries, wages and other similar remuneration  derived  by  a  resident  of a Contracting State in  respect  of  an  employment  shall be taxable only in that State unless  the  employment is exercised in the other Contracting State.  If the  employment  is so exercised, such remuneration  as  is  derived therefrom may be taxed in that other State.

 

2.         Notwithstanding the provisions of paragraph 1  of  this  Article,  remuneration  derived by a  resident  of  a  Contracting State in respect of an employment exercised  in  the  other Contracting State shall be taxable only  in  the first-mentioned State if:

            (a)        the  recipient is present in the  other  State for  a period or

                         periods not exceeding in  the aggregate  183  days within 

                         any  twelve-month  period, and

            (b)        the remuneration is paid by, or on behalf  of,  an employer

                         who is not a resident of the other State, and

            (c)        the  remuneration is not borne by a  permanent 

                         establishment  or  a  fixed  base  which   the employer has in

                         the other State.

 

3.         Notwithstanding  the preceding provisions of  this Article,  remuneration derived in respect of an  employment exercised  aboard  a  ship  or  aircraft  operated  in  international  traffic, by an enterprise of  a  Contracting State shall be taxable only in that State.

 

 

Last updated: 08.12.2011