CONVENTION
BETWEEN
THE GOVERNMENT OF THE KINGDOM OF THAILAND
AND
THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA
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 South Africa
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 a Contracting State or its political subdivisions, 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 as well as 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 South Africa:
(i) the normal tax;
(ii) the non-resident shareholders' tax; and
(iii) the secondary tax on companies;
(hereinafter referred to as "South African tax"); and
(b) in Thailand:
(i) the income tax; and
(ii) the petroleum income tax;
(hereinafter referred to as "Thai tax").
4. This Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of significant changes which have been made in their respective taxation laws.
ARTICLE 3
General Definitions
1. For the purposes of this Convention, unless the context otherwise requires:
(a) the term "South Africa" means the Republic of South Africa
and, when used in a geographical sense, includes the
territorial sea thereof as well as any area outside the
territorial sea, including the continental shelf, which has
been or may hereafter be designated, under the laws of
South Africa and in accordance with international law, as an
area within which South Africa may exercise sovereign rights
or jurisdiction;
(b) the term "Thailand" means the Kingdom of Thailand and
includes any area adjacent to the territorial waters of the
Kingdom of Thailand which by Thai legislation, and in
accordance with international law, falls under the jurisdiction
of the Kingdom of Thailand;
(c) the terms "a Contracting State" and "the other Contracting
State" mean South Africa or Thailand as the context requires;
(d) the term "company" means any body corporate or any entity
which is treated as a body corporate for tax purposes;
(e) the term "competent authority" means:
(i) in South Africa, the Commissioner for Inland Revenue
or his authorised representative; and
(ii) in Thailand, the Minister of Finance or his authorised
representative;
(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 "international traffic" means any transport by a ship
or aircraft operated by an enterprise of a Contracting State,
except when the ship or aircraft is operated solely between
places in the other Contracting State;
(h) the term "national" means any individual possessing the
nationality of a Contracting State and any legal person,
partnership, association and other entity deriving its status
as such from the laws in force in a Contracting State;
(i) the term "person" includes an individual, a company and any
other body of persons as well as any entity treated as a
taxable unit under the taxation laws in force in either
Contracting State; and
(j) the term "tax" means South African tax or Thai tax as the
context requires.
2. As regards the application of the provisions of this Convention by a Contracting State, any term not defined herein 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.
ARTICLE 4
Resident
1. For the purposes of this Convention the term "resident of a Contracting State" means:
(a) in the case of South Africa, any individual who is ordinarily
resident in South Africa and any other person which has its
place of effective management in South Africa; and
(b) in the case of Thailand, any person who, under the laws of
Thailand, is liable to tax therein by reason of his domicile,
residence, place of incorporation, place of management or
any other criterion of a similar nature; this term does not
include any person who is liable to tax in a Contracting State
in respect only of income from sources in that Contracting
State.
2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be 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 e
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 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, then the competent authorities of the Contracting States shall resolve the problem by mutual agreement.
ARTICLE 5
Permanent Establishment
1. For the purposes 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 warehouse, in relation to a person providing storage
facilities for others;
(h) a building site, a construction, installation or assembly
project and supervisory activities in connection therewith, if
such site, project or activities continue for a period of more
than six months; and
(i) the furnishing of services, including consultancy services, by
a resident of one of the Contracting States through
employees or other personnel engaged by that resident for
such purpose, but only where 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 six months within any twelve month period
commencing or ending in any tax period concerned.
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 or
display 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
or display;
(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 advertising, for the supply of information, for
scientific research or for similar activities which have a
preparatory or auxiliary character, for the enterprise; and
(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (a) to
(e), provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory
or auxiliary character.
4. Notwithstanding the provisions of paragraphs 1 and 2, where a person -- other than an agent of an independent status to whom paragraph 6 applies -- is acting in a Contracting State, on behalf of an enterprise of the other Contracting State, the enterprise shall be deemed to have a permanent establishment in the first-mentioned State if such person:
(a) has and habitually exercises in the first-mentioned State, an
authority to conclude contracts on behalf of the enterprise,
unless his activities are limited to the purchase of goods or
merchandise for the enterprise;
(b) as no such authority, but habitually maintains in the first-
mentioned State a stock of goods or merchandise
belonging to the enterprise from which he regularly fills
orders or makes deliveries on behalf of the enterprise;
(c) as no such authority, but habitually secures orders in the
first-mentioned State wholly or mainly for the enterprise or for
the enterprise and other enterprises which are controlled by
it or have a controlling interest in it.
5. Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to reinsurance, be deemed to have a permanent establishment in the other State if it collects premiums in the territory of that other State or insures risks situated therein through an employee or through a representative who is not an agent of an independent status within the meaning of paragraph 6 of this Article.
6. In 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 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 mainly on behalf of that enterprise or on behalf of that enterprise and other enterprises, which are controlled by it or have a controlling interest in it, he will not be considered an agent of independent status within the meaning of this paragraph.
7. 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.
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