Thailand Law Source: The Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

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ARTICLE 28
Exchange of Information

1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1 (General Scope). Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment, collection, or administration of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

(a)

to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(b)

to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c)

to supply information which would disclose any trade, business, industrial, commercial, or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).

3. Subject to the provisions of paragraph 2 of Article 31 (Termination), if information is requested by a Contracting State in accordance with this Article, the other Contracting State shall obtain the information to which the request relates in the same manner and to the same extent as if the tax of the first-mentioned State were the tax of that other State and were being imposed by that other State. The application of this paragraph shall be suspended until such time as the Government of the United States receives from the Government of Thailand a diplomatic note indicating that Thailand is prepared and able to implement the provisions of this paragraph.
4. For the purposes of this Article, the Convention shall apply, notwithstanding the provisions of Article 2 (Taxes Covered) to all taxes imposed:

(a)

in the case of the United States, under the Internal Revenue Code; and

(b)

in the case of Thailand, under the Revenue Code, and under the Petroleum Income Tax Act.

ARTICLE 29
Diplomatic Agents and Consular Officers

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.

ARTICLE 30
Entry Into Force

1. This Convention shall be subject to ratification in accordance with the applicable procedures of each Contracting State and instruments of ratification shall be exchanged at Washington as soon as possible.

2. The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect:

(a)

in respect of taxes withheld at source, for amounts paid or credited on or after the first day of the sixth month next following the date on which the Convention enters into force;

(b)

in respect of other taxes, for taxable periods beginning on or after the first day of January next following the date on which the Convention enters into force.

ARTICLE 31
Termination

1. This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after 5 years from the date on which the Convention enters into force, provided that at least 6 months prior notice of termination has been given through diplomatic channels. In such event, the Convention shall cease to have effect:

(a)

in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January next following the expiration of the 6 months period;

(b)

in respect of other taxes, for taxable periods beginning on or after the first day of January next following the expiration of the 6 months period.

2. Notwithstanding paragraph 1, this Convention shall terminate on January 1 of the 6th year following the year in which the Convention enters into force, unless the Government of the United States has received from the Government of Thailand by June 30, of the 5th year following entry into force, a diplomatic note of the character described in the last sentence of paragraph 3 of Article 28 (Exchange of Information).
     Done at Bangkok in duplicate, on this 26th day of November, 1996, in the English language.

FOR THE GOVERNMENT
OF THE KINGDOM OF THAILAND:

FOR THE GOVERNMENT
OF THE UNITED STATES OF AMERICA:

Amnuay Viravan

William H. Itoh

EMBASSY OF THE UNITED STATES OF AMERICA
Bangkok, November 26, 1996
No. 1107
His Excellency
Amnuay Viravan,
Deputy Prime Minister and,
Minister of Foreign Affairs,
of the Kingdom of Thailand.

Excellency:

     I have the honor to present my compliments to Your Excellency and have the honor to refer to the 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 signed by our two governments on November 26, 1996.

     I have the further honor, on behalf of the Government of the United States of America, to convey the following understandings relating to the Convention:
      It is understood that if the United States hereafter alters its policy regarding the provision of a tax sparing credit, or if the United States reaches an agreement on the provision of a tax sparing credit with any other country, the United States will agree to reopen negotiations with Thailand with a view to the conclusion of a Protocol which would provide a similar tax sparing credit to Thailand.
     It is understood that if Thailand agrees in a treaty or other agreement with any other country to (1) a rate of tax on income or profits derived by residents of such other country on the operation of ships that is lower than the rate specified in paragraph 2 of Article 8 (Shipping and Air Transport), or (2) treatment for the rental or use of containers in international traffic that is more favorable than the treatment specified in paragraph 8 of Article 7 (Business Profits) or paragraph 4 of Article 8 (Shipping and Air Transport), then Thailand will agree to reopen negotiations with the United States with a view to the conclusion of a Protocol which would extend such lower rate or more favorable treatment to residents of the United States.
     It is understood that the use of the term "conditions" in paragraph 1 of Article 25 (Relief from Double Taxation) is intended to make clear that U.S. rules regarding "dual capacity" taxpayers apply in determining the extent to which the Thailand petroleum income tax will be considered an income tax under Article 25.
     I would appreciate confirmation that the Government of the Kingdom of Thailand shares these understandings.
     Accept, Excellency, the renewed assurances of my highest consideration.
William H. Itoh

No. 0504/4970
MINISTRY OF FOREIGN AFFAIRS,
SARANROM PALACE

26 November B.E. 2539 (1996)

His Excellency
William H. Itoh
Ambassador Extraordinary and Plenipotentiary
of the United States of America
Bangkok

Excellency,

     I have the honour to present my compliments to Your Excellency and have the honour to acknowledge receipt of Your Excellency's Note No. 1107 dated 26 November 1996 which reads as follows:
     "I have the honor to present my compliments to Your Excellency and have the honor to refer to the 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 signed by our two Governments on November 26, 1996.
     "I have the further honor, on behalf of the Government of the United States of America, to convey the following understandings relating to the Convention:
     It is understood that if the United States hereafter alters its policy regarding the provision of a tax sparing credit, or if the United States reaches an agreement on the provision of a tax sparing credit with any other country, the United States will agree to reopen negotiations with Thailand with a view to the conclusion of a Protocol which would provide a similar tax sparing credit to Thailand.
     It is understood that if Thailand agrees in a treaty or other agreement with any other country to (1) a rate of tax on income or profits derived by residents of such other country on the operation of ships that is lower than the rate specified in paragraph 2 of Article 8 (Shipping and Air Transport), or (2) treatment for the rental or use of containers in international traffic that is more favorable than the treatment specified in paragraph 8 of Article 7 (Business Profits) or paragraph 4 of Article 8 (Shipping and Air Transport), then Thailand will agree to reopen negotiations with the United States with a view to the conclusion of a Protocol which would extend such lower rate or more favorable treatment to residents of the United States.
     It is understood that the use of the term "conditions" in paragraph 1 or Article 25 (Relief from Double Taxation) is intended to make clear that U.S. rules regarding "dual capacity" taxpayers apply in determining the extent to which the Thailand petroleum income tax will be considered an income tax under Article 25.
     I would appreciate confirmation that the Government of the Kingdom of Thailand shares these understandings.
     Accept, Excellency, the renewed assurances of my highest consideration."
     In reply, I have the honour to confirm that the Government of the Kingdom of Thailand shares the same understandings contained in your Excellency's Note under reference.
     Accept, Excellency, the renewed assurances of my highest consideration.

Amnuay Viravan
Deputy Prime Minister and
Minister of Foreign Affairs

(a)	to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
(b)	to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
(c)	to supply information which would disclose any trade, business, industrial, commercial, or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).

(a)	in the case of the United States, under the Internal Revenue Code; and
(b)	in the case of Thailand, under the Revenue Code, and under the Petroleum Income Tax Act.

(a)	in respect of taxes withheld at source, for amounts paid or credited on or after the first day of the sixth month next following the date on which the Convention enters into force;
(b)	in respect of other taxes, for taxable periods beginning on or after the first day of January next following the date on which the Convention enters into force.

FOR THE GOVERNMENT OF THE KINGDOM OF THAILAND:	FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
Amnuay Viravan	William H. Itoh