CONVENTION
BETWEEN
THE KINGDOM OF THAILAND
AND
THE KINGDOM OF THE NETHERLANDS
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION WITH
RESPECT TO TAXES ON INCOME AND ON CAPITAL
The Government of the Kingdom of Thailand and the Government of the Kingdom of the Netherlands.
Desiring to conclude a convention for the avoidance of double taxation and the prevention of fiscal evasion with respect ot taxes on income and on capital.
Have agreed as follows:
CHAPTER I
SCOPE OF THE CONVENTION
ARTICLE 1
PRESONAL SCOPE
This Convention shall apply to persons who are residents of one or both of the States.
ARTICLE 2
TAXES COVERED
1. This Convention shall apply to taxes on income and on capital imposed on behalf of each of the States 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 and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
3. The existing taxes to which the Convention shall apply are, in particular:
a) in the case of the Netherlands:
(1) de inkomstenbelasting (income tax),
(2) de loonbelasting (wages tax),
(3) de vennootschapsbelasting (company tax),
(4) de dividendbelasting (dividend tax),
(5) de vermogensbelasting (capital tax),
(hereinafter referred to as "Netherlands tax");
b) in the case of Thailand:
(1) the income tax,
(2) the local development tax,
(hereinafter referred to as "Thai tax").
4. The 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 States shall notify ot each other any significant 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 requires:
a) the term "State" means the Netherlands or Thailand, as the
context requires; the term "States" means the Netherlands
and Thailand;
b) the term "the Netherlands" comprises the part of the Kingdom
of the Netherlands that is situated in Eurpoe and the part of
the seabed and its sub-soil under the North-Sea, over which
the Kingdom of the Netherlands has sovereign rights in
accordance with international law;
c) the term "Thailand" comprises the Kingdom of Thailand and
any area adjacent to the territorial waters of the Kingdom of
Thailand which by Thai legislation, and accordance with
internaional law, 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;
d) the term "person" comprises an individual, a company and
any other body of persons
e) the term "company" means any body corporate or any entity or
any group of persons which is treated as a body corporated
for tax purposes;
f) the term "enterprise of one of the States" and "enterprise of
the other State" mean respectively an enterprise carried on by
a resident of one of the States and an enterprise carried on by
a resident of the other State;
g) the term "competent authority" means,
1. in the Netherlands the Minister of Finance or his duly
authorized representative;
2. in Thailand the Minister of Finance or his duly authorized
representative.
2. As regards the application of the Convention by either of the States any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that 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 one of the States" means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature.
2. For the purposes of this Convention, an individual, who is a member of a diplomatic or consular mission of one of the States in the other State or in a third State and who is a national of the sending State, shall be deemed to be a resident of the sending State if he is submitted therein to the same obligations in respect of taxes on income and capital as are residents of that State.
3. Where by reason of the percents of paragraph 1 an individual is a resident of both States, then this case shall be determined in accordance with the following rules:
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 closest (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 States shall settle the question
by mutual agreement.
4. Where by reason of the percents of paragraph 1 a person other than an individual is a resident of both States, then the competent authorities of the 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" shall 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. Notwithstanding the percents of paragraphs 1 and 2, the term "permanent establishment" shall include a building site or construction or assembly project only if it exists for more than
a) six months, in the case of installation or setting up of plant
equipment or machinery including the auxiliary
construction as is necessary for such installation;
b) three months, in all other cases.
4. 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 mercahndise
belonging to the enterprise solely for the purpose of
storage, display or delivery;
c) the miantenance 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 enterprse;
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 activites which have a
preparatory or auxiliary character, for the enterprise.
5. A person acting in one of the States on behalf of an enterprise of the other State-other than an agent of an independent status to whom paragraph 6 applies-shall be deemed to be a permanent establishment in the first-mentioned State if
a) he has, and habitually exercises in the first-mentioned State,
an authority to conclude contracts in the name of the
enterprise, unless his activities are limited to the purchase of
goods or merchandise for the enterprise;or
b) he habitually maintains in the first-mentioned State a stock of
goods or merchandise belonging to the enterprise from
which he regularly fills orders on behalf of the enterprise; or
c) he habitually secures orders in the first-mentioned State,
wholly or almost wholly for the enterprise itself, or for the
enterprise and other enterprises which are controlled by it or
have a controlling interest in it.
6. An enteprise of one of the States shall not be deemed to have a permanent establishment in the other State merely beacause it carries on business in that other State through a broker, gereral commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. This shall not apply if such broker or agent carries on in that other State an activity described in paragraph 5 wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises which are controlled by or have a controlling interest in it.
7. The fact that a company which is a resident of one of the States controls or is controlled by a company which is a resident of the other 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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