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CONVENTION
BETWEEN
THE KINGDOM OF THAILAND
AND
THE ISLAMIC REPUBLIC OF PAKISTAN
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

 

 

            The Royal Government of Thailand and the Government of the Islamic Republic of Pakistan,

 

            Desiring to conclude a C\onvention 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, irrespective of the manner in which they 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 and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

 

3.         The existing taxes to which the Convention shall apply are, in particular:

            (a)            In the case of Thailand:

                             -             the income tax; and

                             -             the petroleum income tax

                                           (hereinafter referred to as “Thai tax”);

            (b)            In the case of Pakistan:

                            -             the income tax;

                            -             the super tax; and

                            -             surcharge

                                          (hereinafter referred to as “Pakistan tax”).

 

4.         The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, the existing taxes. At the end of each year, the competent authorities of the Contracting States shall notify each other of significant changes which have been made in their respective taxation laws.

 

 

CHAPTER II
DEFINITIONS

ARTICLE 3
General Definitions

1.         In this Convention, unless the context otherwise requires:

            (a)        the term “Thailand” means the Kingdom of Thailand and

                         includes any area adjacent to the territorial waters of the

                         Kingdom of Thailand which by Thai legislation has been or

                         may hereafter be designated as an area within which the

                         rights of the Kingdom of Thailand with respect to the seabed

                         and sub--soil and their natural resources may be exercised;

            (b)        the term “Pakistan” used in a geographical sense means

                         Pakistan as defined in the Constitution of the Islamic

                         Republic of Pakistan and also includes any area outside the

                         territorial waters of Pakistan which under the laws of

                         Pakistan is an area within which the rights of Pakistan with

                         respect to the seabed and sub--soil and their natural

                         resources may be exercised;

            (c)        the terms “a Contracting State” and  “the other Contracting

                         State” mean Thailand or Pakistan as the context requires;

            (d)        the term “company” means any body corporate or any entity

                         which is treated as a body corporate for tax purposes;

            (e)        the term “competent authority” means:

                        i)              in Thailand : the Minister of Finance or his

                                         authorised representative;

                        ii)             in Pakistan : The Central Board of Revenue;

            (f)        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;

            (g)            the term “national” means:

                             i)             any individual possessing the nationality of a

                                             Contracting State;

                             ii)             any legal person, partnership and association

                                            deriving its status as such from the law in force in

                                            a Contracting State;

            (h)        the term “person” includes an individual, a company, a

                         partnership, a trust and any other entity treated as taxable

                         unit;

            (i)         the term “international traffic” means any transport by a ship

                         or aircraft operated by an enterprise of a Contracting State,

                         except where such ship or aircraft is operated solely

                         between places in the other Contracting State.

 

2.         As regards the application of the Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of the Convention.

 

 

ARTICLE 4
Resident

1.         For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management, place of incorporation, or any other criterion of a similar nature.

 

2.         Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

            (a)        he shall be deemed to be a resident of the State in which he

                         has a permanent home available to him; if he has a

                         permanent home available to him in both States, he shall be

                         deemed to be a resident of the State with which his personal

                         and economic relations are closer (centre of vital interests);

            (b)        if the State in which he has his centre of vital interests cannot

                         be determined, or if he has not a permanent home available

                         to him in either State, he shall be deemed to be a resident of

                         the State in which he has an habitual abode;

            (c)        if he has an habitual abode in both States or in neither of

                         them, he shall be deemed to be a resident of the State of

                         which he is a national;

            (d)        if he is a national of both States or of neither of them, the

                         competent authorities of the Contracting States shall settle

                         the question by mutual agreement.

 

3.         Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then its status shall be determined in accordance with the following rules:

            (a)        it shall be deemed to be a resident of the Contracting State

                         of which it is a national;

            (b)        if it is a national of neither of the Contracting States, it shall

                         be deemed to be a resident of the Contracting State in which

                         its place of effective management is situated.

 

 

ARTICLE 5
Permanent Establishment

1.         For the purposes of this Convention, the term “permanent establishment” means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

 

2.         The term “permanent establishment” shall include especially:

            (a)             a place of management;

            (b)             a branch;

            (c)             an office;

            (d)             a factory;

            (e)             a workshop;

            (f)              a warehouse;

            (g)             a farm or plantation;

            (h)             a mine, an oil or gas well, a quarry or any other place of

                              extraction of natural resources,

            (i)               a building site or construction or assembly project or

                              supervisory activities in connection therewith, where such

                              site, project or activity continues for a period of more than

                              183 days;

            (j)              the furnishing of services including consultancy services

                              by a resident of one of the Contracting States through

                              employees or other personel, where activities of that

                              nature continue for the same or connected project within

                              the other Contracting State for a period or periods

                               aggregating more than 183 days;

            (k)             a permanent sales exhibition.

 

3.         The term “permanent establishment” shall not be deemed 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 of storage,

                         display or delivery;

            (c)        the maintenance of a stock of goods or merchandise

                         belonging to the enterprise solely for the purpose of

                         processing by another enterprise;

            (d)        the maintenance of a fixed place of business solely for the

                         purpose of purchasing goods or merchandise, or for

                         collecting information, for the enterprise;

            (e)        the mainance of a fixed place of business solely for the

                         purpose of advertising, for the supply of information, for

                         scientific research or for similar activities which have a

                         preparatory or auxiliary character, for the enterprise;

            (f)        the maintenance of an office or like establishment by a news-

                        agency or a newspaper or journal, being an enterprise of one

                        of the Contracting States, exclusively for the collection and

                        transmission to that State of information on behalf of that

                        enterprise.

 

4.         A person acting in a Contracting State on behalf of an enterprise of the other Contracting State other than a broker, general commission agent or any other agent of an independent status to whom paragraph 5 applies shall be deemed to be a permanent establishment in the first-mentioned State, but only if:

            (a)        he has and habitually exercises in the first-mentioned State,

                         an authority to conclude contracts on behalf of the enterprise,

                         unless his activities are limited to the purchase  of goods or

                         merchandise for the enterprise; or

            (b)        he habitually maintains in the first-mentioned State a stock of

                         goods or merchandise belonging to the enterprise from

                         which he regularly fills orders or makes deliveries on behalf

                         of the enterprise; or

            (c)        he habitually secures orders for the sale of goods or

                         merchandise in the first--mentioned State wholly or almost

                        wholly on behalf of the enterprise itself or on behalf of the

                         enterprise and other enterprises controlled by it or which

                         have a controlling interest in it.

 

5.         An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carried on business in that other State through a broker, a general commission agent or any other agent of an independent status provided that such persons are acting in the ordinary course of their business. However, when the duties of such a general commission agent or broker are devoted wholly or almost wholly on behalf of that enterprise, or a group of enterprises controlled by that enterprise, he would not be considered an agent of an independent status within the meaning of this paragraph.

 

6.         The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

 

 

Last updated: 08.12.2011