CONVENTION
BETWEEN
THE GOVERNMENT OF THE KINGDOM OF THAILAND
AND
THE GOVERNMENT OF THE KINGDOM OF DENMARK
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of the Kingdom of Denmark and the Government of the Kingdom of Thailand,
Desiring to conclude a new 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 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 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 capital appreciation.
3. The existing taxes to which the Convention shall apply are in particular:
(a) In the case of Denmark:
(i) the income tax to the State (indkomstskatten til
staten);
(ii) the income tax to the municipalities (den kommunale
indkomstskat);
(iii) the income tax to the county municipalities (den
amtskommunale indkomstskat);
(iv) taxes imposed under the Hydrocarbon Tax Act (skatter
i henhold til kulbrinteskatteloven):
(hereinafter referred to as "Danish tax").
(b) In the case of Thailand:
(i) the income tax;
(ii) the petroleum income tax.
(hereinafter referred to as "Thai tax").
4. The Convention shall apply also 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 substantial 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 terms "a Contracting State" and "the other Contracting
State" mean Denmark or Thailand, as the context requires;
(b) the term "Denmark" means the Kingdom of Denmark
including any area outside the territorial sea of Denmark
which in accordance with international law has been or may
hereafter be designated under Danish laws as an area
within which Denmark may exercise sovereign rights with
respect to the exploration and exploitation of the natural
resources of the sea·bed or its subsoil and the
superjacent waters and with respect to other activities for the
exploration and economic exploitation of the area; the term
does not comprise the Faeroe Islands and Greenland;
(c) 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 the international law, has been or may
hereafter be designated as an area within which the rights of
the Kingdom of Thailand with respect to the sea·bed
or its subsoil and the superjacent waters and their natural
resources may be exercised;
(d) the term "person" includes an individual, a company, any
other body of persons and any entity taxable under the
taxation laws in force in either Contracting State;
(e) the term "company" means any body corporate or any entity
which is treated as a body corporate for tax purposes;
(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, except when the ship or aircraft is operated solely
between places in the other Contracting State;
(h) the term "competent authority" means:
(i) in Denmark: the Minister for Taxation or his authorized
representative;
(ii) in Thailand: The Minister of Finance or his authorized
representative;
(i) the term "tax" means Danish tax or Thai tax as the context
requires;
(j) the term "national" means:
(i) any individual possessing the nationality of a
Contracting State;
(ii) any legal person, partnership, or association deriving
its status as such from the laws in force in a
Contracting State.
2. As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that State for the purposes of the tax to which the Convention applies.
ARTICLE 4
Resident
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 his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature. But this term does 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 States, then his status shall be determined as follows:
(a) he shall be deemed to be a resident only 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
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 the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement and determine the mode of application of the Convention to such person. In the absence of such agreement, for the purposes of the Convention, the person shall in each Contracting State be deemed not to be a resident of the other Contracting State.
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 an 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 farm or plantation;
(h) a warehouse, in relation to a person providing storage
facilities for others;
(i) a building site, a construction, installation or assembly
project or supervisory activities in connection therewith,
where such site, project or activities continue for a period or
periods aggregating more than 6 months;
(j) the furnishing of services including consultancy services by a
resident of one of the Contracting States through employees
or other personnel, 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 6
months within any twelve·month period.
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 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
or 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 advertising, for the supply of information, for
scientific research or for similar activities which have a
preparatory or auxiliary character, for the enterprise;
(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned
insub·paragraphs (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 5 applies · is acting in a Contracting State on behalf of the enterprise of the other Contracting State, the enterprise shall be deemed to have a permanent establishment in the first·mentioned Contracting State if such a 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) has 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; or
(c) has no such authority, but habitually secures orders in the
first·mentioned State wholly or almost wholly for the
enterprise or for the enterprise and other enterprises which
are controlled by it or have a controlling interest in it.
5. 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, 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 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.
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.
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