CONVENTION
BETWEEN
THE REPUBLIC OF BULGARIA
AND
THE KINGDOM OF THAILAND
FOR THE AVOIDANCE OF DOUBLE TAXATION
WITH RESPECT TO TAXES ON INCOME
The Republic of Bulgaria and The Kingdom of Thailand,
desiring to conclude a Convention for the avoidance of double taxation with respect to taxes on income,
Have agreed as follows:
CHAPTER I
SCOPE OF THE CONVENTION 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 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 and taxes on total amounts of wages and 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 Bulgaria:
(i) the personal income tax;
(ii) the corporate income tax ; and
(iii) the final tax
(hereinafter referred to as "Bulgarian tax");
b) in the case of Thailand:
(i) the income tax; and
(ii) the petroleum income tax;
(hereinafter referred to as " Thai tax).
4. The Convention shall also apply to any 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 any significant changes which have been made in their respective taxation laws.
CHAPTER II
DEFINITIONS 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 Bulgaria or Thailand as the
context requires;
b) the term "Bulgaria" means the Republic of Bulgaria and
when used in a geographical sense means the territory
over which it exercises its State sovereignty, as well as
the continental shelf and the exclusive economic zone
over which it exercises sovereign rights and jurisdiction
in conformity with international law;
c) the term " Thailand " means the Kingdom of Thailand
and includes the 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 and subsoil and their
natural resources may be exercised;
d) the term "person" includes an individual, an undivided
estate, a company and any other body of persons;
e) the term "company" means a legal person or any entity
which is treated as a legal person 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 tax means Bulgarian tax or Thai 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 or
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 when the ship or aircraft is
operated solely between places in the other Contracting
State; and
j) the term "competent authority" means:
(i) in the case of Bulgaria, the Minister of Finance
or his authorized representative;
(ii) in the case of Thailand, the Minister of Finance
or his authorized representative.
2. As regards the application of the Convention by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies. Any meaning under the applicable tax laws of that State, will be prevailing over a meaning given to the term under other laws of that State.
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; and this term shall also include the State itself, its local authorities and statutory bodies. 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 only 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 does not have a
permanent home available to him in either State, he
shall be deemed to be a resident only 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
endeavour to 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, it shall be deemed to be a resident of the State in which it is incorporated; if the person under the foregoing criterion still is a resident of both Contracting States, then the competent authorities of the Contracting 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 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 building site, a construction, installation or assembly
project or supervisory activities in connection therewith,
where such site, project or activities continue for a
period of more than six months;
h) the furnishing of services including consultancy services
by a resident of a Contracting State through employees
or other personnel, where activities of that nature
continue for the same or connected project in the other
Contracting State for a period or periods aggregating
more than six months in 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,
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 are ofa preparatory or auxiliary
character, for the enterprise;
f) the maintenance of a fixed place of business solely
for any combination of activities mentioned in
subparagraph (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, that enterprise shall be deemed to have a permanent establishment in the first - mentioned State, if such a person has, and habitually exercises, in the first-mentioned State an authority to conclude contracts on behalf of the enterprise, unless the activities of such person 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 of that paragraph.
5. 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 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.
6. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that 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, he shall not be considered to be an agent of an 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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