AGREEMENT
BETWEEN
THE GOVERNMENT OF THE KINGDOM OF THAILAND
AND
THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA
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 People’s Republic of China;
Desiring to conclude an Agreement 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 Agreement shall apply to persons who are residents of one or both of the Contracting States.
ARTICLE 2
TAXES COVERED
1. The Agreement shall apply to taxes on income imposed on behalf of each Contracting State or its 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 Agreement shall apply are:
a) in the case of Thailand;
(i) the income tax; and
(ii) the petroleum income tax;
(hereinafter referred to as “Thai tax”)
“(b) in the case of China;
(i) the individual income tax;
(ii) the income tax for enterprises with foreign
investment and foreign enterprises; and
(iii) the local income tax.
(hereinafter referred to as “Chinese tax”)”
(As amended by the negotiations on the amendment of the Agreement between Thailand and the People's Republic of China, entered into force an 25 May 2000)
4. The Agreement shall also apply to any identical or substantially similar taxes on income which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of important changes which have been made in their respective taxation laws.
ARTICLE 3
GENERAL DEFINITIONS
1. For the purposes of this Agreement, unless the context otherwise requires:
(a) 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, has been or may
hereafter be designated as an area within which the right of
the Kingdom of Thailand with respect to the seabed and
sub-soil and their natural resources may be exercised;
(b) the term “China” means the People’s Republic of China,
when used in a geographical sense, means all the
territories of the People’s Republic of China, including
territorial sea, in which the taxation laws of China apply, and
any area beyond its territorial sea, within which the People’s
Republic of China has sovereign rights of exploration for and
exploitation of resources of the seabed and its sub-soil and
superjacent water resources in accordance with
international law;
(c) the terms “a Contracting State” and “the other
ContractingState” mean Thailand or China, as the context
requires;
(d) the term “person” includes and individual, a company, 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;
(e) the term “company” means any body corporate or any entity
which is treated as a body corporate under the taxation laws
of the respective Contracting States;
(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 Stat and
an enterprise carried on by a resident of the other
Contracting State;
(g) the term “tax” means Thai tax or Chinese tax, as the context
requires;
(h) the term “national” means:
(i) any individual possessing the nationality of a
Contracting State;
(ii) any legal person, partnership, association and any
other entity deriving its status as such from the laws
in force in a Contracting State;
(i) the term “international traffic” means any transport by a ship
or aircraft operated by an enterprise of a Contracting State,
except where the ship or aircraft is operated solely between
places in the other Contracting State;
“(j) the term “competent authority” means, in the case of
Thailand, the Minister of Finance or his authorized
representative and in the case of China, the State
Administration of Taxation or its authorized representative.”
(As amended by the negotiations on the amendment of the Agreement between Thailand and the People's Republic of China, entered into force an 25 May 2000)
2. As regards the application of the Agreement 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 Contracting State concerning the taxes to which the Agreement applies.
ARTICLE 4
RESIDENT
1. For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that Contracting State, is liable to tax therein by reason of his domicile, residence, head office, place of incorporation or any other criterion of a similar nature.
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 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 deemed to be a resident of
the Contracting State with which his personal and economic
relations are closer (centre of vital interests);
(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. 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 determine that the person is a resident of a Contracting State for the purposes of this Agreement by mutual agreement.
ARTICLE 5
PERMANENT ESTABLISHMENT
1. For the purposes of this Agreement, 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 farm or plantation;
(g) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources;
(h) a building site, a construction, installation or assembly
project or supervisory activities in connection therewith,
where such site, project or activity continues for a period of
more than 6 months;
(i) a warehouse, in relation to a person providing storage
facilities for others;
(j) 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 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 of goods or merchandise belonging to the
enterprise;
(b) the maintenance off a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
storageor 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.
4. A person (other than a broker, general commission agent or any other agent of an independent status to whom paragraph 5 applies) acting in a Contracting State on behalf of an enterprise of the other Contracting State shall be deemed to be a permanent establishment in the first-mentioned Contracting State, if:
(a) he has, and habitually exercises in the first-mentioned
Contracting State, an authority to conclude contracts on
behalf of the enterprise, unless his activities are limited to
those mentioned in paragraph 3 which, if exercised through
a fixed place of business, would not make this fixed place of
business a permanent establishment under the provisions
ofthat paragraph; or
(b) he maintains in the first-mentioned Contracting State a
stockof goods or merchandise belonging to the enterprise
from which he regularly fills orders or make deliveries on
behalf of the enterprise; or
(c) he habitually secures orders in the first-
mentionedContracting 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 Contracting State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. For this purpose, an agent shall not be considered an agent of an independent status if it carries on in the other Contracting State an activity described in paragraph 4 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.
6. Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other Contracting 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 5.
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 Contracting 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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