CONVENTION BETWEEN THE GOVERNMENT OF THE KINGDOM OF THAILAND AND THE REPUBLIC OF ITALY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Kingdom of Thailand and the Government of the Republic of Italy, Desiring to conclude a Convention to avoid taxation and to prevent 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 subdivisions 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, taxes on the total amount of wages or salaries paid by enterprises. 3. The existing taxes to which the Convention shall apply are in particular: (a) In the case of Thailand: I. the income tax; II. the petroleum income tax; (hereinaffter referred to as "Thai tax") (b) In the case of Italy: I. the personal income tax (imposta sul reddito delle persone fisiche); II. the corporate income tax (imposta sul reddito delle persone giuridiche); III. the local income tax (imposta locale sui redditi)even if they are collected by withholding taxes at the source (hereinafter referred to as Italian tax). 4. This Convention shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify to each other any important 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 requries: a) the term Thailand means the Kingdom of Thailand; b) the term ltaly means the Republic of Italy; c) the terms a Contracting State and the other Contracting State mean Thailand or Italy as the context requires; d) the term person comprises an individual, a company,a body of persons and any entity which is treated as a taxable unit under the tax 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 competent authority means: 1. in the case of Thailand, the Minister of Finance or his authorized representative; 2. in the case of Italy, the Minister of Finance. 2. As regards the application of this 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 this Convention. ARTICLE 4 FISCAL DOMICILE 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 taxation therein by reason of his domicile, residence, place of managnment, 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 this cases shall be determined in accordance with the following rules: a) He shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests): b) If the Contracting 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 Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c) If he has an habitual abode in both Contracting State or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; d) If he is a national of both Contracting State 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 in which the business of the enterprise is wholly or partly carried on. 2. The term "permanent establishment" include especially: a) a place of management; b) a branch: c) an office: d) a factory; e) a workshop; f) a mine, quarry or other place of extraction of natural resources. 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 maintenance of a fixed place of business solely for the purpose of advertising for the supply of information, for scientific research of for similar activities which have a preparatory or auxiliary character for the enterprise; f) the assembly, or installation or setting up of plant equipment or machinery including construction as necessary for such installation, if it exists for not more than six months. 4. Notwithstanding the provisions of paragraph 3, a person acting in a Contracting State on behalf of an enterprise of the other Contracting State-other than an agent of an independent status to whom paragraph 5 applies-shall be deemed to be a permanent establishment in the first-mentioned State if a) he has, and habitually exercises in that Contracting State, an authority to conclude contracts for or 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 that Contracting State a stock of goods or merchandise belonging to the enterprise from which he regularly delivers goods or merchandise for or on behalf of the enterprise ; or c) he habitually secures orders in that Contracting State, wholly or almost wholly for the enterprise itself, or for the enterprise andother enterprises which are controlled by it or have a controllinginterest in it. 5. 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 agent an independent status, where such persons are acting in the ordinary course of their business. 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 for either company a permanent establishment of the other. |