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ARTICLE 11
INTEREST

 

1.         Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State.

 

2.         However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 10 per cent of the gross amount of the interest in case it is received by any financial institution (including an insurance company).

 

3.         Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to the Government of the other Contracting State shall be exempt from tax in the first-mentioned Contracting State.

For the purposes of this paragraph, the term “Government”

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

                           Thailand and shall include:

                           (i)         the Bank of Thailand;

                           (ii)        the Export - Import Bank of Thailand;

                           (iii)       the Government Saving Bank;

                           (iv)       the Government Housing Bank;

                           (v)        the local authorities; and

                           (vi)       such financial institutions, the capital of which is

                                        wholly owned by the Royal Government of Thailand

                                        or any local authority as may be agreed from time to

                                        time between the competent authorities of both of

                                        the Contracting Stats;

             (b)        in the case of China, means the Government of the People’s

                          Republic of China and shall include:

                          (i)         the People’s Bank of China and Bank of China to the

                                      extent that its activity is carried on within the scope of

                                      the normal authority of a central bank;

                          (ii)        State Development Bank;

                          (iii)       China Import and Export Bank;

                          (iv)       the Agriculture Development Bank of China;

                          (v)        the local authorities; and

                         (vi)       such financial institutions, the capital of which is

                                     wholly owned by the Government of the People’s

                                     Republic of China or any local authority as may be

                                     agreed from time to time between the

                                     competentauthorities of both of the Contracting

                                     States.”

                         (As amended by the negotiations on the amendment of the Agreement between Thailand and the People's Republic of China, entered into force an 25 May 2000)

 

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, as well as similar income treated as income from money lent by the taxation laws of the Contracting State in which the income arises. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

 

5.         The provisions of paragraphs 1 and 2 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 Contracting 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 such permanent establishment or fixed base. 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 the Government of that Contracting State, a political subdivision, a local authority or a resident of that Contracting 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 Contracting 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 Agreement.

 

 

ARTICLE 12
ROYALTIES

 

1.         Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other contracting State.

 

2.         However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that  Contracting State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed 15 per cent of the gross amount of the royalties.

 

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, 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, or for information concerning industrial, commercial or scientific experience.

 

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 Contracting 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 such permanent establishment or fixed base. In such case 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 the Government of that Contracting State, a political subdivision, a local authority or a resident of that Contracting 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 obligation to pay the royalties was incurred, and those royalties are borne by that permanent establishment or fixed base, then such royalties shall be deemed to arise in the Contracting 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 Agreement.

 

 

ARTICLE 13
GAINS FROM THE ALIENATION OF PROPERTY

 

1.         Gains derived by a resident of a Contracting State from the alienation of immovable property situated in the other Contracting State as defined in Article 6 may be taxed in that other Contracting State.

 

2.         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 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 together with the whole enterprise) or of such a fixed base, may be taxed in that other Contracting State.

 

3.         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 Contracting State.

 

4.         Gains from the alienation of any property or assets, other than those referred to in paragraphs 1, 2 and 3 of this Article, arising in a Contracting State, may be taxed in that Contracting State.

 

 

ARTICLE 14
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 only in that Contracting 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 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 that other Contracting State; or

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

                        orperiods amounting to or exceeding in the aggregate 183

                        days within any twelve-month period; in that case, only so

                        much of the income as is derived from his activities

                        performed in  that other Contracting State may be taxed in that

                        other  Contracting State; or

            (c)        if the remuneration for his activities in the other

                        ContractingState is paid by a resident of that other

                        Contracting State or is borne by a permanent establishment

                        or a fixed base situated in that other Contracting State; in that

                        case, only so much of the remuneration as is derived

                        therefrom may betaxed in that other Contracting State.

 

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

 

 

ARTICLE 15
DEPENDENT PERSONAL SERVICES

 

1.         Subject to the provisions of Articles 16,18,19,20 and 21, 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 Contracting 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 Contracting 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 Contracting State if:

            (a)        the recipient is present in the other Contracting 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 Contracting State,

                         and

            (c)        the remuneration is not borne by a permanent establishment

                         or a fixed base which the employer has in the other

                         Contracting 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 shall be taxable only in that Contracting State.

 

 

Last updated: 08.12.2011