Section Code: 0025
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 25: Relief from Double Taxation
In accordance with the provisions and subject to the conditions and limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof), the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income
- the income tax paid to Thailand by or on behalf of such citizen or resident; and
- in the case of a United States company owning at least 10 percent of the voting stock of a company which is a resident of Thailand and from which the United States company receives dividends, the income tax paid to Thailand by or on behalf of the distributing company with respect to the profits out of which the dividends are paid.
For the purposes of this paragraph, the taxes referred to in paragraphs 1(b) and 2 of Article 2 (Taxes Covered) shall be considered income taxes.
In accordance with the provisions and subject to the limitations of the law of Thailand (as it may be amended from time to time without changing the general principle hereof), United States tax payable in respect of income from sources within the United States shall be allowed as a credit against Thai tax payable in respect of that income. The credit shall not exceed that part of the Thai tax as computed before the credit is given which is appropriate to such item of income. The provisions of this paragraph shall not apply in the case of income that has been denied benefits of this Convention under the provisions of Article 18 (Limitation on Benefits).
For the purposes of allowing relief from double taxation pursuant to this Article, income shall be deemed to arise exclusively as follows:
- income derived by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention (other than solely by reason of citizenship in accordance with paragraph 2 of Article 1 (Personal Scope)) shall be deemed to arise in that other State;
- income derived by a resident of a Contracting State which may not be taxed in the other Contracting State in accordance with the Convention shall be deemed to arise in the first mentioned State.
Notwithstanding the preceding sentence, the determination of the source of income for purposes of this Article shall be subject to such source rules in the domestic laws of the Contracting States as apply for the purpose of limiting the foreign tax credit. The rules of this paragraph shall not apply in determining credits against the tax of a Contracting State for foreign taxes other than the taxes of the other Contracting State referred to in Article 2 (Taxes Covered).