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ARTICLE11
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 which is a resident  of the other Contracting State, 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 other

                         cases.

The competent authorities of the Contracting States shall  by  mutual  agreement settle the mode of  application  of  this limitation.

 

3.         Notwithstanding  the  provisions of paragraph 2,  interest  arising  in a Contracting State and paid  to  a  resident of the other Contracting State, shall be  exempt  from  tax in the first-mentioned Contracting State if  it is paid in respect of a loan made by :

            (a)        in  the  case   of  Thailand,  means   the Government of

                         Thailand and shall include:

                         (i)         the Bank of Thailand;

                         (ii)        Export-Import Bank of Thailand      

                         (iii)       the local authorities; and

                         (iv)       such institutions,  the  capital  of  which  is   wholly 

                                      owned   by  the  Government of Thailand or any  local 

                                      authorities as  may be  agreed  from time to time

                                      between  the  competent authorities of the  two 

                                      Contracting States;

            (b)        in the case of Spain, means:

                         (i)         The Bank of Spain;

                         (ii)        Any financial instrumentality as may be agreed  upon 

                                      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.

 

5.         The provisions of paragraphs 1, 2 and 3,  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  with:

            (b)         business  activities  referred  to  under

            (c)         of  paragraph  1  of   Article 7.  In such case  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.

 

 

ARTICLE12
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 beneficial owner is  a  resident  of  the  other Contracting State,  the  tax  so charged shall not exceed:

            (a)        5  per  cent  of the  gross  amount  of  the royalties  for the

                         use of, or the  right  to use,  any copyrights of literary, 

                         dramatic,  musical,   artistic  or   scientific   work,  excluding 

                         cinematograph films or  films  or  tapes   used   for   radio  

                         or   television   broadcasting;

            (b)        8 per cent  of  the   gross  amount  of  the  royalties   received 

                         in  consideration   of financial  leasing  for the use of,  or  the 

                         right  to  use, industrial,  commercial,  or  scientific

                         equipment; and 

            (c)        15  per  cent  of the gross  amount  of  the royalties in all

                          other cases.

 

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 including the amount  receiving  in        consideration  in financial leasing, or  for  information  concerning  industrial,   commercial   or    scientific experience.   The term "royalties" also includes  gains  derived from the alienation of such right or property  to  the  extent   that  such  gains   are   contingent   on  productivity, use, or disposition thereof.

 

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 with: (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.

 

 

ARTICLE13
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  derived by a resident of  a  Contracting  State from the alienation of shares or comparable  rights  in  a  company,  the assets of which  consist  wholly  or  principally  of  immovable  property as  referred  to  in  Article 6 and situated in the other Contracting State may be taxed in that other State.

 

3.         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.

 

4.         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.

 

5.         Gains from the alienation of any property other than that referred to in paragraphs 1, 2  and  3  of this Article  and paragraph 3 of Article 12, shall be  taxable only in the Contracting State of which the alienator is a  resident.

 

 

ARTICLE14
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 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 regularly available  to him in the other

                         Contracting State  for the purpose of performing his 

                          activities;  in  that case, only so much of the  income  as is

                          attributable to that fixed base  may be taxed in the other

                          Contracting State; or

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

                         periods amounting to or exceeding in the agregate 183 days

                         in  the  fiscal  year concerned; 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. 

 

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

 

 

ARTICLE15
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 may  be taxable only in that State.

 

 

Last updated: 08.12.2011