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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.

 

Last updated: 08.12.2011