Section Code: 0012 - 0013
U.S. – THAILAND TAX TREATY 1998
Convention between the government of the United States of America and the government of the kingdom of Thailand for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
Article 12: Royalties
Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed:
- 5 percent of the gross amount of the royalties described in subparagraph (a) of paragraph 3;
- 8 percent of the gross amount of the royalties described in subparagraph (b) of paragraph 3; and
- 15 percent of the gross amount of the royalties described in subparagraph (c) of paragraph 3.
The term "royalties" as used in this Article means payments of any kind received as a consideration:
- for the use of or the right to use any copyright of literary, artistic or scientific work, including software, and motion pictures and works on film, tape or other means of reproduction for use in connection with radio or television broadcasting;
- for the use of or the right to use industrial, commercial or scientific equipment; or
- for the use of or the right to use any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.
The term "royalties" also includes gains derived from the alienation of any such right or property which are contingent on the productivity, use or disposition thereof.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with
- such permanent establishment or fixed base, or with
- business activities referred to under subparagraph (c) of paragraph 1 of Article 7 (Business Profits).
In such case the provisions of Article 7 (Business Profits) or Article 15 (Independent Personal Services), as the case may be, shall apply.
- Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. However, when the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
- Where subparagraph (a) does not operate to treat royalties as being from sources in one of the Contracting States and the royalties relate to the use of or the right to use in one of the Contracting States any property or right described in paragraph 3, the royalties shall be deemed to arise in that State.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right, or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of the Convention.
Article 13: Gains
Except as otherwise provided in this Convention, each Contracting State may tax gains from the alienation of property in accordance with the provisions of its domestic law.
Notwithstanding the provisions of paragraph 1, gains from the alienation of ships, aircraft or containers used or operated by an enterprise of a Contracting State in international traffic or movable property pertaining to the use or operation of such ships, aircraft or containers shall be taxable only in the Contracting State of which the enterprise is a resident.