AGREEMENT
BETWEEN
THE KINGDOM OF THAILAND
AND
THE FEDERAL REPUBLIC OF GERMANY
FOR THE AVOIDANCE OF DOUBLE TAXATION
WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
The Kingdom of Thailand and the Federal Republic of Germany,
Desiring to conclude an Agreement for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital,
Have agreed as follows:
ARTICLE 1
This Agreement shall apply to persons who are residents of one or both of the Contracting States.
ARTICLE 2
1 This Agreement shall apply to taxes on income and on capital imposed on behalf of each Contracting State, of its “Laender”, political subdivisions, local authorities, or local administrations, 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 and the “Gewerbesteuer” (trade tax) levied in the Federal Republic of Germany.
3 The existing taxes to which this Agreement shall apply are, in particular:
1. In the case of the Federal Republic of Germany:
(a) the Einkommensteuer (income tax),
(b) the Korperschaftsteuer (corporation tax),
(c) the Vermogensteuer (capital tax), and
(d) the Gewerbesteuer (trade tax)
(hereinafter referred to as “German tax);
2. In the case of the Kingdom of Thailand:
(a) the income tax, and
(b) the local development tax
(hereinafter referred to as “Thai tax”).
4 The Agreement shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of, the existing taxes.
5 The provisions of this Agreement in respect of the taxation of income or profits shall likewise apply to the “Gewerbesteuer” (trade tax) computed other than on the basis of income or capital.
ARTICLE 3
1 In this Agreement, unless the context otherwise requires:
(a) The term “Federal Republic” means the Federal Republic of
Germany, and, when used in a geographical sense, the
territory in which the Basic Law for the Federal Republic of
Germany is in force;
(b) The term “Thailand” means the Kingdom of Thailand;
(c) The terms “a Contracting State” and “the other Contracting
State” mean the Federal Republic or Thailand, as the context
requires;
(d) The term “tax” means German tax or Thai tax, as the context
requires;
(e) The term “company” means and body corporate or any entity
or any group of persons which is treated as a body corporate
for tax purposes;
(g) 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
andan enterprise carried on by a resident of the other
Contracting State;
(h) The term “nationals”means:
1. in respect of the Federal Republic: all Germans in the
meaning of Article 116(1) of the Basic Law for the
Federal Republic of Germany and all legal
persons,partnership and associations deriving their
status as such from the law in force in the Federal
Republic;
2. in respect of Thailand: all individuals possessing Thai
nationality under the Thai law on nationality and all
legal persons, partnerships and associations
derivingtheir status as such from the law in force in
Thailand;
(i) The term “competent authority” means in the
case of the Federal Republic the Federal
Minister of Finance, and in the case of Thailand
the Minister of Finance.
2 As regards the application of this Agreement by a Contracting State any term not otherwise defined in this Agreement shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Agreement.
ARTICLE 4
1 For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, registration, incorporation, seat (Sitz), place of management or any other criterion of a similar nature.
2 If by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, this case shall be determined in accordance with the following rules:
(a) He shall be deemed to be a resident of the Contracting State
in which he has a permanent home available to him.If he
has a permanent home available to him in both Contracting
States, he shall be deemend to be a resident of the
Contracting State with which his personal and economic
relations are closest (centre of vital interest);
(b) If the Contracting 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 Contracting State,
he shall be deemed to be a resident of the Contracting State
in which he has an habitual abode;
(c) If he has an habitual abode in both Contracting States or in
neither of them, he shall be deemed to be a resident of the
Contracting State of which he is a national;
(d) If he is a national of both Contracting States or of neither of
them, the competent authorities of the Contracting States
shall settle the question by mutual agreement.
3 If by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall settle the question by mutual agreement.
ARTICLE 5
1 For the purposes of this Agreement, 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 provisions 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) 6 months, in the case if installation or setting up of plant
equipment or machinery including the auxiliary construction
as is necessary for such installation;
(b) 3 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 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 for
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.
5 Notwithstanding the provisions of paragraph 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 6 applies-shall be deemed to be a permanent establishment in the first-mentioned State if
(a) he has, and habitually exercises in that Contracting State, an
authority to conclude contracts for or on behalf of the
enterprise, unless his activities are limited to the purchase of
goods or merchandise for the enterprise; or
(b) he habitually maintains in that Contracting State a stock of
goods or merchandise belonging to the enterprise from
which he regularly delivers goods or merchandise for or on
behalf of the enterprise; or
(c) he habitually secures orders in that Contracting 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 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, if 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 it or have a controlling interest in it.
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 for either company a permanent establishment of the other.
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