CHAPTER III
TAXATION OF INCOME

ARTICLE 6
Income from immovable property

1.         Income from immovable property including income from agriculture or forestry may be taxed in the Contracting State in which such property is situated.

2.         The term “immovable property” shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or faxed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

3.         The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4.         The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services.

ARTICLE 7
Business profits

1.         The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

2.         Subject to the provisions of paragraph 3 where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

3.         In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of, and are directly related to the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

4.         No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

5.         For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

6.         Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8
Shipping and air transport

1.         Income from the operation of aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2.         Income from the operation of ships in international traffic by an enterprise having a place of effective management in a Contracting State may be taxed in the other Contracting State, but the tax imposed in that other State shall be reduced by an amount equal to 50 per cent thereof.

3.         The provisions of paragraphs 1 and 2 shall likewise apply to income arising from participations in pools of any kind by enterprises engaged in  shipping or air transport.

ARTICLE 9
Associated enterprises

Where

(a)        an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

(b)        the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

ARTICLE 10
Dividends

1.         Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2.         However, such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident, but

            (a)        the Thai tax shall not exceed:

                         (1)        20 per cent of the gross amount of the dividends if the

                                      company paying the dividends engages in an

                                      industrial undertaking or if  the recipient of the

                                      dividends is a company which is a resident of

                                      Belgium owning at least 25 per cent of the voting

                                      shares of  the company paying the dividends;

                         (2)        15 per cent of the gross amount of the dividends if the

                                      company  paying the dividends engages in an

                                      industrial undertaking and the recipient of the

                                      dividends is a company which is a resident of 

                                      Belgium owning at least 25 per cent of the voting

                                      shares of the former company;

            (b)        the Belgian tax shall not exceed:

                         (1)        15 percent of the gross amount of the dividends, if the

                                      recipient of the dividends is a company which is a

                                      resident of Thailand owning at least 25 per cent of the

                                      voting shares of the company paying the dividends;

                          (2)        20 per cent of the gross amount of the dividends in

                                      all  other cases if the recipient of the dividends is a

                                      company which is a  resident of Thailand.

3.         The term “dividends” as used in this Article means income from shares, “jouissancez’ shares or “jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the taxation law of the State of which the company making the distribution is a resident. This term means also income, even when paid in the form of interest, which is taxable under the head of income on capital invested by the members of a company other than a company with share capital, which is a resident of Belgium.

4.         The term “industrial undertaking” as used in this Article means

            (a)        any undertaking engaged in

                          (1)        manufacturing, assembling and processing,

                          (2)        construction, civil engineering and ship building,

                          (3)        mining and exploration for and exploitation of natural

                                       resources,

                          (4)        production of electricity, hydraulic power, gas or the

                                       supply of  water, or

                          (5)        agriculture, forestry and fishery and the carrying on of 

                                       a plantation, and

            (b)        any other undertaking entitled to the privileges accorded

                        under the    laws of Thailand on the promotion of industrial

                         investment, and

            (c)        any other undertaking which may be declared to be an 

                         “industrial undertaking” for the purpose of this Article by the

                         competent authority of Thailand.

5.         The provisions of paragraphs 1 and 2 shall not apply if the recipient of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State professional services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 or Article 14, as the case may be, shall apply.

6.         Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, to a resident of that first mentioned State, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State; this provision shall not prevent that other State from taxing dividends relating to a holding which is effectively connected with a permanent establishment or a fixed base situated in that other State.

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