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CONVENTION
BETWEEN
THE GOVERNMENT OF THE KINGDOM OF THALIAND
AND
THE GOVERNMENT OF THE REPUBIC OF THE PHILPPINES
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 the Philippines,

 

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

 

            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 imposed on behalf of each Contracting State, 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, and taxes on the total amounts 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:

                         (1)        the income tax;

                         (2)        the petroleum income tax;

                                     (hereinafter referred to as "Thai tax");

            (b)        in the case of the Philippines:

                         the  income  taxes  imposed  under  Title  II of the National 

                         Internal Revenue Code of the Philippines, as amended, and

                         all other taxes on income imposed by the Philippines,

                         (hereinafter referred to as "Philippine tax")

 

4.         The Convention shall apply also to any identical or substantially  similar  taxes  on income which are income after the date of signature of this  Convention  in  addition to, or in place of, the existing taxes. At the end of  each year, the competent authorities of the Contracting States shall notify each other  of  any  significant  change  which  has been made in their respective  taxation laws.

 

 

ARTICLE 3
GEERAL DEFINITIONS

1.         For the purposes of this Convention, unless the context otherwise  requires:

            (a)        (i)         the term "Thailand" means the Kingdom of Thailand

                                     and any area adjacent to the territorial waters of the

                                      Kingdom of  Thailand  which  by  Thai  legislation 

                                      has  been  or may  hereafter be designated as an .

                                      area within which the rights of the Kingdom of

                                     Thailand with respect to the seabed and sub-soil and

                                      their natural resources may be exercised;

                        (ii)        the  term  "Philippines"  means  the  Republic  of  the 

                                      Philipp ines and when used in a geographical sense

                                      means the national territory   comprising  the 

                                      Republic  of  the  Philippines;

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

                         State"  mean,  as  the  context  requries,  Thailand  or the 

                         Philippines;

            (c)        the term "person" includes an individual, an estate, a trust, a

                         company, and any other body of persons;

            (d)        the  term  "company" means any body corporate or any entity 

                         which is treated as a body corporate for tax purposes;

            (e)        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;

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

                        or aircraft operated by an  enterprise of one of the Contracting

                        States,  except when the ship or aircraft is operated solely 

                        between places in the other Contracting State;

            (g)        the term "national" means:

                         (i)         any individual possessing the citizenship or

                                      nationality  of a Contracting State;

                         (ii)        any  legal person, partnership or association created, 

                                      organized or incorporated under the laws of a

                                      Contracting State;

            (h)        the term "competent authority" means:

                          (i)         in  the case of Thailand, the Minister of Finance or

                                      his authorized representative;

                          (ii)        in the case of the Philippines, the Minister of Finance

                                       or his authorized representative;

            (i)         the  term "tax" means the Thai tax or the Philippine tax as the 

                         context requires.

 

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 laws of that State concerning the taxes to  which the Convention applies.

Notwithstanding  the preceding paragraph, if the meaning of such term under the laws of one of the Contracting States is different from the meaning of  the  term  under  the  laws  of the other Contracting State, the competent  authorities  of the Contracting States may, in order to prevent double taxation or to  further the purpose of this Convention, establish a common meaning of the term  for the purpose of this Convention.

 

 

ARTICLE 4
RESIDENCE

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 this domicile, residence, place of incorporation or  any  other  criterion  of a similar nature. But this term dose not include any  person who is liable to tax in that State in respect only of income from sources in that  State.

 

2.         Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting State, then his status shall 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

                         uestion 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, then it shall be deemed to be a resident of the State where it was incorporated.

 

 

ARTICLE 5
PERMANENT ESTABLISHMENT

1.         For the purpose of this Convention, the term "permanent establishment" means a fixed place of business through which the business of the 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  building  site  or construction project where such site or 

                         project continues for a period of more than six months;

            (h)        an assembly or installation project which exists for more

                         than three months;

            (i)         premises used as a sales outlet;

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

                         facilities for others;

            (k)        the furnishing of services, including consultancy services, by

                         a resident of one of the Contracting States through

                         employees or  other personnel, provided 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 183 days.

 

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, 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 of

                        collecting  information, for the enterprise;

            (e)        the  maintenance  of a fixed place of business solely for the 

                         purpose  of carrying on activities which have a preparatory or 

                         auxiliary character, for the enterprise, such as, advertising or

                         scientific research.

 

4.         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 State, an authority to 

                         conclude on behalf of the enterprise, unless his activities

                         are  limited  to  the  purchase  of  goods  or  merchandise for

                         that  enterprise; or

            (b)        he habitually maintains in the first-mentioned State a stock of

                         goods or merchandise from which he regularly delivers

                         goods or merchandise on behalf of the enterprise; orhe

                         habitually secures orders in the first-mentioned State wholly

                         or almost wholly for the enterprise or for the enterprise and

                        other enterprises which control or are controlled by the

                        former.

 

5.         An enterprise shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that 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 the enterprise and other enterprises  which  control  or  are controlled by the former, he shall not be  considered  an  agent  of  an  independent  status  within the meaning of this  paragraph. In such a case, the provisions of paragraph 4 shall apply.

 

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 either company a permanent establishment of the other.

 

 

Last updated: 08.12.2011