TMI BlogAgreement between the Government of India and the Government of the Kingdom of Thailand for the Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on incomeX X X X Extracts X X X X X X X X Extracts X X X X ..... n shall be given effect to in the Union of India. ANNEXURE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE KINGDOM OF THAILAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Kingdom of Thailand, DESIRING to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income, HAVE AGREED as follows: CHAPTER I SCOPE OF THE CONVENTION Article 1 PERSONAL SCOPE This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1. This Convention shall apply to taxes on income imposed on behalf of each Contracting State or of its political sub-divisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on the total amounts of wages or salaries paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws in force in the respective Contracting States; (g) the terms " enterprise of a Contracting State " and " enterprise of the other Contracting State " mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; (h) the term " competent authority " means in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative; and in the case of Thailand, the Minister of Finance or his authorised representative; (i) the term " national " means any individual possessing the nationality of a Contracting State and any legal person, partnership, association and any other entity deriving its status as such from the laws in force in a Contracting State; (j) the term " international traffic " means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except where the ship or aircraft is operated solely between places in the other Contracting State. 2. In the application of the provisions of this Convention by one of the Contracting States, any term not defined herein shall, unless the contex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of extraction of natural resources; (g) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on; (h) a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or activity continues for the same or a connected project for a period or periods aggregating to more than 183 days; (i) a warehouse, in relation to a person providing storage facilities for others; (j) the furnishing of services, including consultancy services, by a resident of one of the Contracting States through employees or other personnel, provided activities of that nature continue (for the same or a connected project) within the other Contracting State for a period or periods aggregating to more than 183 days. 3. Notwithstanding the preceding provisions of this article, the term " permanent establishment " shall be deemed not to include: (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting State, or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise), shall not, of itself, constitute either company or a permanent establishment of the other. 7. Notwithstanding the preceding provisions of this article, an insurance enterprise of a Contracting State shall, except in regard to reinsurance, be deemed to have a permanent establishment in the other State if it collects premiums in the territory of that State or insures risks situated therein through an employee or through a representative who is not an agent of an independent status within the meaning of paragraph 5 of this Article. CHAPTER III TAXATION OF INCOME Article 6 INCOME FROM IMMOVABLE PROPERTY 1. Income from immovable property (including income from agriculture or forestry) may be taxed in the Contracting State in which such property is situated. 2. The term " immovable property " shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o determine the income or profits to be attributed to a permanent establishment on the basis of a certain percentage of the gross receipts of the enterprise or on the basis of an apportionment of the total income or profits of the enterprise to its various parts, nothing in paragraph 2 of this Article shall preclude that Contracting State from determining the income or profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. 5. No income or profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 6. For the purposes of the preceding paragraphs, the income or profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 7. Where income or profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial owner of the dividends is a company which is a resident of the other Contracting State, the tax shall not exceed- (a) 15 per cent. of the gross amount of dividends, in a case where the company paying the dividends is engaged in an industrial undertaking and the beneficial owner of the dividends is a company of the other Contracting State owning at least 10 per cent. of the voting shares of the company paying the dividends; (b) in the case not covered by sub-paragraph (a) above, 20 per cent. of the gross amount of dividends if the company paying the dividends is engaged in an industrial undertaking or if the beneficial owner of the dividends is a company of the other Contracting State owning at least 25 per cent. of the voting shares of the company paying the dividends. 3. (a) The term " dividends " as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares according to the taxation laws of the Contracting State of which the company making the distribution is a resident. (b) In this Article, the term " industrial undertaking " means an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any financial institution (including an insurance company); (b) in all other cases, 25 per cent. of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State if- (a) the recipient of the interest is the government, or local authority, or the Central Bank of the other Contracting State; or (b) the interest is paid to any agency or institution including a financial institution which may be agreed upon for the purposes of this paragraph by the competent authorities of the 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, 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. 5. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adcasting, 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 recipient 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 such permanent establishment or fixed base. In such a case, 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 Contracting State itself, a political sub-division, 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 fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te unless such activities were performed in the other Contracting State. Income in respect of professional services or independent activities performed within that other State may be taxed by that other State. 2. Notwithstanding the provisions of paragraph 1, income derived by a resident of a Contracting State in respect of professional services or other independent activities performed in the other Contracting State shall not be taxable in the other State if: (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant " previous year " or " tax year " concerned, as the case may be, and (b) the recipient does not maintain a fixed base in the other State for a period or periods exceeding in the aggregate 183 days in such year, and (c) the income is not borne by an enterprise or a permanent establishment situated in that other State. 3. The term " professional services " includes especially independent scientific, literary, artistic, educational or teaching activities as well as independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. Article 15 DEPEND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3. Notwithstanding the provisions of Article 7, where the activities mentioned in paragraph 1 of this Article are provided in a Contracting State by an enterprise of the other Contracting State, the profits derived from providing these activities by such an enterprise may be taxed in the first-mentioned Contracting State unless the enterprise is substantially supported by the public funds of the other Contracting State, including any political sub-division, local authority or statutory body thereof, in connection with the provisions of such activities. 4. The provisions of paragraphs 1 and 2 of this Article shall not apply to remuneration or profits, salaries, wages and similar income derived from activities performed in a Contracting State by public entertainers or athletes if the visit to that Contracting State is substantially supported by public funds o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or training; and (c) remuneration from employment in that first-mentioned Contracting State, in an amount not in excess of Rs. 15,000 or its equivalent in Thai currency during any " previous year " or " tax year ", as the case may be, provided that such employment is directly related to his studies or is undertaken for the purpose of his maintenance. Article 21 PROFESSORS, TEACHERS AND RESEARCH SCHOLARS 1. A professor, teacher or research scholar who is or was a resident of one of the Contracting States immediately before visiting of other Contracting State at the invitation of that other Contracting State or of a university, college, school or other approved institution in that other Contracting State for the purpose of teaching or engaging in research, or both, at the university, college, school or other approved institution, shall be exempt from tax in that other Contracting State on any remuneration for such teaching or research for a period not exceeding two years from the date of his arrival in that other Contracting State. 2. This Article shall only apply to income from research if such research is undertaken by the individual for the public interest and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are designed to promote economic development in Thailand, or which may be introduced hereafter in modification of, or in addition to, the existing laws for promoting economic development in Thailand. 4. The amount of Indian tax payable under the laws of India and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of Thailand, in respect of profits or income arising in India, which has been subjected to tax both in India and Thailand, shall be allowed as a credit against Thai tax payable in respect of such profits or income provided that such credit shall not exceed the Thai tax (as computed before allowing any such credit) which is appropriate to the profits or income arising in India. 5. For the purposes of the credit referred to in paragraph 4, the term " Indian tax payable " shall be deemed to include any amount which would have been payable as Indian tax for any assessment year but for an exemption or reduction of tax granted for that year or any part thereof by the special incentive measures under the provisions of the Income-tax Act, 1961 (43 of 1961), which are designed to promote economic development, or which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the 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 an appropriate 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 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 the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the 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. When it seems advisable in order to reach agreement to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E 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 upon the exchange of the instruments of ratification and shall have effect: (a) in India, in respect of income derived during the " previous years " beginning on or after the first day of January of the calendar year next following the calendar year in which the instruments of ratification are exchanged; (b) in Thailand, in respect of income derived during " tax years " or " accounting periods " beginning on or after the first day of January of the calendar year next following the calendar year in which the instruments of ratification are exchanged. Article 29 TERMINATION This Convention shall remain in force indefinitely but either Contracting State may terminate the Convention, through diplomatic channels, by giving to the other Contracting State, written notice of termination on or before June 30th of any calendar year after the expiration of five years from the year in which the Convention entered into force. In such event, the Convention shall cease to have effect: (a) in India, in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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