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 24
Methods of Elimination of Double Taxation
1.
Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Thai tax paid under the law of Thailand and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Thailand shall be allowed as a credit against Australian tax payable in respect of that income.
2.
Where a company, which is a resident of Thailand and is not a resident of Australia for the purposes of Australian tax, pays a dividend to a company which is a resident of Australia and which controls directly or indirectly not less than 10 per cent of the voting power of the first mentioned company, the credit referred to in paragraph 1 shall include the Thai tax paid by that first mentioned company in respect of that portion of its profits out of which the dividend is paid.
3.
For the purposes of paragraphs 1 and 2, Thai tax paid shall include an amount equivalent to the amount of any tax forgone which, under the law of Thailand and in accordance with this Agreement, would have been payable as tax on income but for an exemption from, or a reduction of, tax on that income resulting from the operation of:
(a) sections 31, 33, 34, 35(2), (3), (4), or 36(4) of the Investment Promotion Act B.E. 2520 insofar as those provisions were in force on, and have not been modified since, the date of signature of this Agreement, or have been modified only in minor respects so as not to affect their general character; or
(b) any other provision which may subsequently be made granting an exemption from or reduction of tax which the authorised representatives of the Government of Australia and of the Government of the Kingdom of Thailand agree in writing to be of a substantially similar character, provided that such provisions are not modified thereafter or are modified only in minor respects so as not to affect their general character.
4.
The provisions of paragraph 3 shall apply only in relation to income derived in any of the first 10 years of income in relation to which this Agreement has effect by virtue of subparagraph (paragraph (a)(ii) of Article 28 and in any later year of income that may be agreed in an exchange of letters for this purpose by the authorised representatives of the Government of Australia and of the Government of the Kingdom of Thailand.
5.
In the case of Thailand, Australian tax payable in respect of income from sources within Australia shall be allowed as a credit against Thai tax payable in respect of that income. The credit shall not, however, exceed that part of the Thai tax, as computed before the credit is given which is appropriate to such item of income.
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.
Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Thai tax paid under the law of Thailand and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Thailand shall be allowed as a credit against Australian tax payable in respect of that income.
2.
Where a company, which is a resident of Thailand and is not a resident of Australia for the purposes of Australian tax, pays a dividend to a company which is a resident of Australia and which controls directly or indirectly not less than 10 per cent of the voting power of the first mentioned company, the credit referred to in paragraph 1 shall include the Thai tax paid by that first mentioned company in respect of that portion of its profits out of which the dividend is paid.
3.
For the purposes of paragraphs 1 and 2, Thai tax paid shall include an amount equivalent to the amount of any tax forgone which, under the law of Thailand and in accordance with this Agreement, would have been payable as tax on income but for an exemption from, or a reduction of, tax on that income resulting from the operation of:
(a) sections 31, 33, 34, 35(2), (3), (4), or 36(4) of the Investment Promotion Act B.E. 2520 insofar as those provisions were in force on, and have not been modified since, the date of signature of this Agreement, or have been modified only in minor respects so as not to affect their general character; or
(b) any other provision which may subsequently be made granting an exemption from or reduction of tax which the authorised representatives of the Government of Australia and of the Government of the Kingdom of Thailand agree in writing to be of a substantially similar character, provided that such provisions are not modified thereafter or are modified only in minor respects so as not to affect their general character.
4.
The provisions of paragraph 3 shall apply only in relation to income derived in any of the first 10 years of income in relation to which this Agreement has effect by virtue of subparagraph (paragraph (a)(ii) of Article 28 and in any later year of income that may be agreed in an exchange of letters for this purpose by the authorised representatives of the Government of Australia and of the Government of the Kingdom of Thailand.
5.
In the case of Thailand, Australian tax payable in respect of income from sources within Australia shall be allowed as a credit against Thai tax payable in respect of that income. The credit shall not, however, exceed that part of the Thai tax, as computed before the credit is given which is appropriate to such item of income.
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