Australian Tax Treaties
Thai Agreement
AGREEMENT BETWEEN AUSTRALIA AND THE KINGDOM OF THAILAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
ARTICLE 10
Dividends
1.
Dividends paid by a company which is a resident of one of the Contracting States for the purposes of its tax, being dividends to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.
2.
Such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but, if the beneficial owner of the dividends is a company, excluding a partnership, which holds directly at least 25 per cent of the capital of the former company, the tax so charged shall not exceed:
(a) 15 per cent of the gross amount of the dividends if the company paying the dividends engages in an industrial undertaking; and
(b) 20 per cent of the gross amount of the dividends in other cases.
3.
The term " dividends " in this Article means income from shares and other income assimilated to income from shares by the taxation law of the Contracting State of which the company making the distribution is a resident.
4.
The provisions of paragraphs 1 and 2 shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
5.
Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State. However, this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Thailand for the purposes of Thai tax.
6.
Nothing in this Agreement shall be construed as preventing one of the Contracting States from imposing, in accordance with its domestic law, a tax on profits remitted by a permanent establishment of an enterprise of the other Contracting State situated in the first mentioned Contracting State.
7.
The term " industrial undertaking " means -
(a) any undertaking engaged in:
(b) any other undertaking entitled to the privileges accorded under the laws of Thailand on the promotion of industrial investment; and
(c) any other undertaking which may be declared to be an " industrial undertaking " for the purpose of this Article by the competent authority of Thailand.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) has modified the application of this tax treaty. A synthesised text of the MLI and this tax treaty is available to facilitate the understanding of how the MLI modifies this tax treaty.
Dividends paid by a company which is a resident of one of the Contracting States for the purposes of its tax, being dividends to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.
2.
Such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but, if the beneficial owner of the dividends is a company, excluding a partnership, which holds directly at least 25 per cent of the capital of the former company, the tax so charged shall not exceed:
(a) 15 per cent of the gross amount of the dividends if the company paying the dividends engages in an industrial undertaking; and
(b) 20 per cent of the gross amount of the dividends in other cases.
3.
The term " dividends " in this Article means income from shares and other income assimilated to income from shares by the taxation law of the Contracting State of which the company making the distribution is a resident.
4.
The provisions of paragraphs 1 and 2 shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
5.
Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State. However, this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Thailand for the purposes of Thai tax.
6.
Nothing in this Agreement shall be construed as preventing one of the Contracting States from imposing, in accordance with its domestic law, a tax on profits remitted by a permanent establishment of an enterprise of the other Contracting State situated in the first mentioned Contracting State.
7.
The term " industrial undertaking " means -
(a) any undertaking engaged in:
(i) manufacturing, assembling or processing;
(ii) construction, civil engineering or shipbuilding;
(iii) production of electricity, hydraulic power or gas;
(iv) the supply of water; or
(v) agriculture, forestry or fisheries or the carrying on of a plantation;
(b) any other undertaking entitled to the privileges accorded under the laws of Thailand on the promotion of industrial investment; and
(c) any other undertaking which may be declared to be an " industrial undertaking " for the purpose of this Article by the competent authority of Thailand.
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