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CONVENTION
BETWEEN
THE KINGDOM OF THAILAND
AND
THE GRAND DUCHY OF LUXEMBOURG
FORTHE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

 

 

            The Government of the Kingdom of Thailand  and the Government of the Grand Duchy of Luxembourg,

 

            Desiring to conclude a Convention for the avoidance of  double  taxation and the prevention of  fiscal  evasion with respect to taxes on income and on capital.

 

            Have agreed as follows:

 

 

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 and  on  capital imposed on behalf of a Contracting State or of  its local authorities, irrespective of the manner in  which  they are levied.

 

2.         There shall be regarded as taxes on income and  on capital  all  taxes  imposed  on  total  income,  on  total capital, or on elements of income or of capital,  including  taxes on gains from the alienation of movable or  immovable property,  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 :

            (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 Luxembourg:

                         -           the income tax on individuals (l'impt surle revenudes

                                     personnes physiques);

                         -           the corporation tax (l' impot sur le revenu des 

                                      collectivits);

                         -           the tax on fees of directors of companies (l'impot

                                     special sur les tantiemes);

                         -           the capital tax (l'impot sur la fortune); and

                         -           the communal trade tax (l'impot commercial

                                     communal);

                                     (hereinafter referred to as "Luxembourg tax").

 

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

 

 

ARTICLE 3
GENERAL DEFINITIONS

1.         For  the purposes of 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,  under the Thai legislation and

                         the international law, falls under the jurisdiction of the

                         Kingdom of Thailand;

            (b)        the term "Luxembourg" means the territory of the Grand

                         Duchy of  Luxembourg;

            (c)        the terms "a Contracting State" and "the other Contracting

                        State" mean Thailand or Luxembourg as the context requires;

            (d)        the term "person" includes an  individual, a  company  and 

                         any other body of persons  as  well  as any entity treated as a

                         taxable  unit under  the  taxation laws in force  in  either

                        Contracting State;

            (e)        the  term "company" means any body  corporate  or  any 

                        entity  which is treated  as  a  body  corporate for tax

                        purposes;

            (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 "tax" means Thai tax or Luxembourg tax as the

                        context requires;

            (h)        the term "national" means:

                        (i)         any individual possessing the  nationality of a

                                     Contracting State;

                        (ii)        any legal person, partnership, association and any

                                     other entity  deriving  its status as such from the laws 

                                     in force  in  a  Contracting State;

            (i)         the  term  "international traffic"  means  any  transport by a

                        ship or aircraft operated by an enterprise of a Contracting

                        State, except when the  ship  or  aircraft  is  operated   solely

                        between places in the other Contracting State; and

            (j)         the term "competent authority"  means, in  the case  of

                        Thailand, the Minister of Finance  or his  authorized 

                        representative, and,  in  the case of Luxembourg, the Minister

                        of Finance or his authorized representative.

 

2.         As regards the application of the Convention by a Contracting State any term not  defined  therein  shall, unless  the  context otherwise requires, have  the  meaning  which  it  has under the law of that State  concerning  the taxes to which the Convention applies.

 

 

ARTICLE 4
RESIDENT

1.         For  the purposes of this  Convention,  the  term "resident  of  a Contracting State" means any  person  who, under  the laws of that State, is liable to tax therein  by  reason of his domicile, residence, place of  incorporation, place  of  management or any other criterion of  a  similar nature.   But this term does not include any person who is liable to tax in that State in respect only of income  from sources in that State or capital situated therein.

 

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,  the  competent  authorities  of   the  Contracting  States  shall settle the  question  by  mutual  agreement.

 

 

ARTICLE 5
PERMANENT ESTABLISHMENT

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

 

2.         The  term "permanent  establishment"  includes  especially:

            (a)        a place of management;

            (b)        a branch;

            (c)        an office;

            (d)        a factory;

            (e)        a workshop;

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

                         extraction of natural  resources;

            (g)        a farm or plantation; 

            (h)        a warehouse, in relation to a person providing storage

                         facilities for others;

            (i)         a building site, a construction,  installation or assembly

                         project or supervisory  activities in  connection  therewith,

                         where  such   site, project or activities  continue for a period

                        of  more than 6 months;

            (j)         the  furnishing  of  services  including   consultancy  services

                         by a resident of one of  the  Contracting  States  through 

                         employees  or ther  personnel, where  activities  of  that 

                         nature  continue for the same or  a  connected project within

                         the other Contracting State for a period or periods

                         aggregating more  than  6 months within any twelve-month

                         period.

 

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 or

                         display 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

                         or display;

            (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 of

                         collecting information, for  the enterprise;

            (e)        the maintenance 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.

 

4.         Notwithstanding the provisions of paragraphs 1 and  2,  where a person - other than an agent of an  independent  status  to  whom  paragraph  6 applies -  is  acting  in  a  Contracting State, on behalf of the enterprise of the other  Contracting State, the enterprise shall be deemed to have a  permanent establishment in the first-mentioned  Contracting  State, if such a person:

            (a)        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;

            (b)        has no such authority,  but  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)        has no such authority, but habitually  secures  orders in the

                         first-mentioned State wholly  or almost  wholly for the

                         enterprise or  for  the enterprise  and  other enterprises 

                        which  are  controlled  by  it or have a  controlling  interest in it.

 

5.         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 other 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 6 of this Article.

 

6.         An enterprise of a Contracting State shall not  be deemed  to  have  a permanent establishment  in  the  other  Contracting State merely because it carries on business  in that  other State through a broker, 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 activities of such an agent are devoted wholly or  almost  wholly on behalf of  that  enterprise or  on behalf of that enterprise and other enterprises, which are controlled  by it or have a controlling  interest in it, he will not be  considered  an  agent  of  independent status within the  meaning  of  this  paragraph.

 

7.         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