CONVENTION
BETWEEN
THE GOVERNMENT OF THE KINGDOM OF THALIAND
AND
THE GOVERNMENT OF THE REPUBIC OF THE PHILPPINES
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 Republic of the Philippines,
Desiring to conclude a 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 each Contracting State, 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 the total amounts of wages or salaries paid by enterprises.
3. The existing taxes to which the Convention shall apply are in particular:
(a) in the case of Thailand:
(1) the income tax;
(2) the petroleum income tax;
(hereinafter referred to as "Thai tax");
(b) in the case of the Philippines:
the income taxes imposed under Title II of the National
Internal Revenue Code of the Philippines, as amended, and
all other taxes on income imposed by the Philippines,
(hereinafter referred to as "Philippine tax")
4. The Convention shall apply also to any identical or substantially similar taxes on income which are income after the date of signature of this Convention in addition to, or in place of, the existing taxes. At the end of each year, the competent authorities of the Contracting States shall notify each other of any significant change which has been made in their respective taxation laws.
ARTICLE 3
GEERAL DEFINITIONS
1. For the purposes of this Convention, unless the context otherwise requires:
(a) (i) the term "Thailand" means the Kingdom of Thailand
and any area adjacent to the territorial waters of the
Kingdom of Thailand which by Thai legislation
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;
(ii) the term "Philippines" means the Republic of the
Philipp ines and when used in a geographical sense
means the national territory comprising the
Republic of the Philippines;
(b) the terms "a Contracting State" and "the other Contracting
State" mean, as the context requries, Thailand or the
Philippines;
(c) the term "person" includes an individual, an estate, a trust, a
company, and any other body of persons;
(d) the term "company" means any body corporate or any entity
which is treated as a body corporate for tax purposes;
(e) 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;
(f) the term "international traffic" means any transport by a ship
or aircraft operated by an enterprise of one of the Contracting
States, except when the ship or aircraft is operated solely
between places in the other Contracting State;
(g) the term "national" means:
(i) any individual possessing the citizenship or
nationality of a Contracting State;
(ii) any legal person, partnership or association created,
organized or incorporated under the laws of a
Contracting State;
(h) the term "competent authority" means:
(i) in the case of Thailand, the Minister of Finance or
his authorized representative;
(ii) in the case of the Philippines, the Minister of Finance
or his authorized representative;
(i) the term "tax" means the Thai tax or the Philippine tax as the
context requires.
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 which it has under the laws of that State concerning the taxes to which the Convention applies.
Notwithstanding the preceding paragraph, if the meaning of such term under the laws of one of the Contracting States is different from the meaning of the term under the laws of the other Contracting State, the competent authorities of the Contracting States may, in order to prevent double taxation or to further the purpose of this Convention, establish a common meaning of the term for the purpose of this Convention.
ARTICLE 4
RESIDENCE
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 this domicile, residence, place of incorporation or any other criterion of a similar nature. But this term dose 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 State, then his status shall determined as follows:
(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 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
uestion 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 it shall be deemed to be a resident of the State where it was incorporated.
ARTICLE 5
PERMANENT ESTABLISHMENT
1. For the purpose of this Convention, the term "permanent establishment" means a fixed place of business through which the business of the 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 or construction project where such site or
project continues for a period of more than six months;
(h) an assembly or installation project which exists for more
than three months;
(i) premises used as a sales outlet;
(j) a warehouse, in relation to a person providing storage
facilities for others;
(k) 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.
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 of
collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the
purpose of carrying on activities which have a preparatory or
auxiliary character, for the enterprise, such as, advertising or
scientific research.
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 5 applies) shall be deemed to be a permanent establishment in the first-mentioned State if:
(a) he has, and habitually exercises in that State, an authority to
conclude on behalf of the enterprise, unless his activities
are limited to the purchase of goods or merchandise for
that enterprise; or
(b) he habitually maintains in the first-mentioned State a stock of
goods or merchandise from which he regularly delivers
goods or merchandise on behalf of the enterprise; orhe
habitually secures orders in the first-mentioned State wholly
or almost wholly for the enterprise or for the enterprise and
other enterprises which control or are controlled by the
former.
5. An enterprise shall not be deemed to have a permanent establishment in the other 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 the enterprise and other enterprises which control or are controlled by the former, he shall not be considered an agent of an independent status within the meaning of this paragraph. In such a case, the provisions of paragraph 4 shall apply.
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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