1. Subject to the laws of Thailand regarding the allowance as a credit against Thai tax of tax payable in any country other than Thailand, where a resident of Thailand derives income from Japan which may be taxed in Japan in accordance with the provisions of this Convention, the amount of Japanese tax payable in respect of that income shall be allowed as a credit against the Thai tax imposed on that resident. The amount of credit, however, shall not exceed that part of the Thai tax which is appropriate to that income.
2. Subject to the laws of Japan regarding the allowance as a credit against Japanese tax of tax payable in any country other than Japan (a) Where a resident of Japan derives income from Thailand which may be taxed in Thailand in accordance with the provisions of this Convention, the amount of Thai tax payable in respect of that income shall be allowed as a credit against the Japanese tax imposed on that resident. The amount of credit, however, shall not exceed that part of the Japanese tax which is appropriate to that income. (b) Where the income derived from Thailand is a dividend paid by a company which is a resident of Thailand to a company which is a resident of Japan and which owns not less than 25 per cent either of the voting shares of the company paying the dividend, or of the total shares issued by that company, the credit shall take into account the Thai tax payable by the company paying the dividend in respect of its income.
3. Subject to the provisons of paragraph 4, for the purposes of the credit referred to in paragraph 2 (a) above, the term "Thai tax payable" shall be deemed to include the amount of Thai tax which would have been paid if the Thai tax had not been reduced in accordance with the provisions of paragraph 2 of Article 10 or paragraph 2 or 5 of Article 12.
4. (a) For the purposes of the credit referred to in paragraph above, the term "Thai tax payable" shall be deemed to include the amount of the Thai tax which would have beenpaid under the laws of Thailand if the Thai tax had not been reduced or exempted in accordance with: (i) the provisions of the sections 31, 33, 34, 35 (2), 35 (3), 35 (4) or 36 (4) of the Investment Promotion Act, B.E.2520 (1977), as effective on the date of the signature of this Convention; or (ii) any provision referred to in (i) above as modified after the date of signature of this Convention or any other special incentive measure designed to promoteeconomic development in Thailand which may be introduced in future in the Thai tax laws in modification of, or in addition to, the existing measures referred to in (i) above, provided that an agreement is made between the two Governments in respect of the scope of the benefit accorded to the taxpayer by the said provision so modified or the said measure. (b) the provisions of sub-paragraph (a) (i) above shall not, to the extent that the section 35 (3) or 36 (4) of the Investment Promotion Act, B.E. 2520 (1977) is concerned, apply in each individual case in respect of income arising after the thirteenth taxable year since the exemption from, or reduction of, Thai tax is first granted in accordance with the provisions of such sections, or since this Convention has effect, whichever is later.
5. For the purposes of paragraphs 3 and 4 above, with respect to dividends, royalties or proceeds to which the provisions of paragraph 2 of Article 10 or paragraph 2 or 5 of Article 12, as the case may be, are applicable, any credit against Japanese tax granted in accordance with the provisions of paragraph 2 (a) and paragraph 3 or 4 (a) above shall not exceed 25 per cent of the gross amount thereof.
1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals or that other Contracting State in the same circumstances are or may be subjected.
2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
3. Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 7 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall ,for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned Contracting State.
4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned Contracting State or may be subjected.
5. In this Article the term taxation means taxes which are the subject of this Convention.
1. Where a resident considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic laws of those Contracting States, present his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of this Convention.
2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the provisions of this Convention.
3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention. They may also consult together for the elimination of double taxation in cases not provided for in this Convention.
4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs of this Article.
1. The competent authorities of both Contracting State may exchange such information available under their respective tax laws in the normal course of administration as is necessary for carrying out the provisions of this Convention or for the prevention of fraud or for the administration of statutory provisions against tax avoidance in relation to the tax. Any information so exchanged shall be treated as secret and shall not be disclosed to any person other than those, including a court, concerned with the assessment and collection of the tax or the determination of appeal in relation thereto.
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 the 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.
Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.
1. This Convention shall be ratified and the instruments of ratification shall be exchanged at Bangkok as soon as possible.
2. This Convention shall enter into force on the thirtieth day after the date of the exchange of instruments of ratification and shall have effect:
(a) in Japan: as regards income for any taxable year beginning on or after the first day of January of the calendar year next following that in which this Convention enters into force; and
(b) in Thailand: (i) in respect of taxes withheld at the source, on amounts paid or remitted to non-residents on or after the first day of January of the calendar year next following in which this Convention enters into force;
(ii) in respect of other taxes on income for any taxable year or accounting period beginning on or after the first day of January of the calendar year next following that in which this Convention enters into force.
3. The Convention between Thailand and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed at Bangkok on March 1, 1963, shall terminate and cease to have effect in respect of income to which this Convention applies under provisions of paragraph 2.
This Convention shall continue in effect indefinitely but either Contracting State may, on or before the thirtieth day of June of 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 the diplomatic channel, written notice of termination and, in such event, this Convention shall cease to have effect:
(a) in Japan: as regards income for any taxable year beginning on or after the first day of January of the calendar year next following that in which the notice of termination is given; and
(b) in Thailand: (i) in respect of taxes withheld at the source, on amounts paid or remitted to non-residents on or after the first day of January of the calendar year next following that in which the notice of termination is given;
(ii) in respect of other taxes on income for any taxable year of accounting period beginning on or after the first day or January of the calendar year next following that in which the notice of termination is given.
IN WITHNESS WHEREOF the undersigned, duly authorized thereto by their respective Government, have signed this Contvention.
DONE in duplicate at Tokyo on this seventy day of April, 1990 in the English language.
At the signing of the Convention between Thailand and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter referred to as "the Convention"), the underasigned have agreed upon the following provisions which shall form an integral part of the Convention.
1. 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-paragraphs (a), (b) or (c) of paragraph 6 of the said Article wholly or almost whoely for or on behalf of an enterprise of the other Contracting State or for or on behalf of such entrerprise and other enterprises which are controlled by or have a controlling interest in such enterprise.
2. With reference to paragraph 3 of Article 7 of the Convention, no deduction shall be allowed in respect of amounts paid or charged (other than reimbursement of actual expenses) by a permanent establishment of an enterprise to the head office of the enterprise or any other offices thereof, by way of:
(a) royalties, fees or other similar payments in return for the use of patents or other rights;
(b) commission, for specific services performed or for management; and
(c) interest on moneys lent to the permanent establishment; except where the enterprise is a banking institution.
3. With reference to paragraphs 2, 3 and 4 of Article 7 of the Convention, in the case of a resident of Japan who does not claim taxation in Thailand on the basis of the actual net profits of the permanent establishment in Thailand, nothing in the said paragraphs shall preclude Thailand from determining the profits to be attributed to that permanent establishment on the basis of a certain reasonable percentage of the gross receipts of that permanent establishment, provided that the result shall be in accordance with the principles contained in the said Article.
4. With reference to paragraph 3 (b) of Article 10 of the Convention, the term "industrial undertaking" also means any undertaking entitled to the privileges accorded under the laws of Thailand on the promotion of industrial investment.
5. Nothing in the Convention shall be construed as preventing Thailand from imposing tax on the disposal out of Thailand of profits made by a permanent establishment in accordance with Section 70 Bis of the Thai Revenue Code, B.E. 2481 (1938).
6. With reference to Article 16 of the Convention, it is understood that income derived from the provision of activities mentioned in paragraph 1 of the Article in a Contracting State by an enterprise of the other Contracting State may be taxed in the first-mentioned Contracting State in the same manner as prescribed by paragraph 2 of the Article.
7. With reference to paragraph 4 (a) of Article 21 of the Convention, it is understood that any section referred to in sub-paragraph (i) of the said paragraph, as modified after the date of signature of the Convention, is covered by the provision of the said sub-paragraph and the provisions of sub-paragraph (ii) of the said paragraph do not apply to such modified section, so long as such modification is made only to such an extent that the scope of the benefit accorded by such section as effective on the date of the signature of the Convention is not altered.
8. Notwithstanding the privsions of paragraph 2 of Article 26 of the Convention, the provisions of paragraph 4 (a) (i) of Aticle 21 shall be applicable as regards income for any taxable year ending on or after the first day of January 1988.
IN WITHNESS WHEREOF the undersigned,duly authorized thereto by their respective Governmemts, have signed this Protocol.
DONE in duplicate at Tokyo on this seventh day of April, 1990 in the English language.
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