Double Tax Treaty between Luxembourg & Thailand | Damalion

CONVENTION

Between the Grand Duchy of Luxembourg and the Kingdom of Thailand for the avoidance of double taxation
and the Prevention of Fiscal Evasion with respect to Taxes on income and on capital

 

The Government of the Grand Duchy of Luxembourg and the Government of the Kingdom of Thailand,

desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital taxes on income and on capital 

have agreed as follows:

Art. 1 st . – Targeted persons

This Convention applies to persons who are residents of a Contracting State or of both Contracting States.

 

Art. 2. – Taxes covered

1.This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its local authorities, regardless of the system of collection.

 

2.Taxes on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable property, are regarded as taxes on income and on capital. or real estate, taxes on the aggregate amount of wages paid by companies, as well as taxes on capital gains.

 

3.The current taxes to which the Convention applies are:

 

To)

with regard to Thailand:

income tax; and

the petroleum income tax;

(hereinafter referred to as “Thai tax”);

b)

with regard to Luxembourg:

personal income tax;
corporate income tax;
the special tax on directors’ fees;
wealth tax; and

municipal business tax;

(hereinafter referred to as “Luxembourg tax”).

4.The Convention also applies to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replace existing taxes. The competent authorities of the Contracting States will notify each other of any major changes made to their respective tax laws.

 

Art. 3. – General definitions

1.For the purposes of this Convention, unless the context requires a different interpretation:

 

a) (a) the term “Thailand” means the Kingdom of Thailand including any area adjacent to the territorial waters of the Kingdom of Thailand subject, under Thai law and international law, to the jurisdiction of the Kingdom of Thailand;
(b) the term “Luxembourg” designates the territory of the Grand Duchy of Luxembourg;
c) the terms “a Contracting State” and “the other Contracting State” mean, as the context requires, Thailand or Luxembourg;
(d) the term “person” includes natural persons, companies and any other body of persons, as well as any entity considered as a taxable unit under the tax legislation in force in each of the Contracting States;
(e) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
(f) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
(g) the term “tax” means, as the context requires, Thai tax or Luxembourg tax;
(h)

The term “national” means:

(i) any natural person who has the nationality of a Contracting State;
(ii any legal person, partnership, association and any other entity constituted in accordance with the legislation in force in a Contracting State;
(i) the expression “international traffic” means any transport effected by a ship or an aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated only between points situated in the other State. Contractor;
(j) the term “competent authority” means, in the case of Thailand, the Minister of Finance or his authorized representative, and, in the case of Luxembourg, the Minister of Finance or his authorized representative.
  1. For the application of the Convention by a Contracting State, any expression which is not defined therein has the meaning assigned to it by the law of that State relating to the taxes to which the Convention applies unless the context requires a different interpretation.

 

Art. 4. – Resident

  1. For the purposes of this Convention, the expression “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax in that State by reason of his domicile, his residence, place of incorporation, place of management or any other criterion of a similar nature. However, this expression does not include persons who are subject to tax in that State only on income from sources situated in that State or on capital situated there.

 

  1. Where, under the provisions of paragraph l er , an individual is a resident of both Contracting States, his status shall be determined as follows:
a) (a) that person is considered to be a resident of the State in which he has a permanent home; if he has a permanent home in both states, he is considered a resident of the state with which his personal and economic ties are closest (center of vital interests);
(b) if the state or that person has the center of his vital interests cannot be determined, or if he does not have a permanent home in any of the states, he is considered to be a resident of the state where he is staying in the usual way;
c) if this person is habitually resident in the two States or if he does not habitually reside in either of them, he shall be considered as a resident of the State of which he is a national;
(d) If this person possesses the nationality of both States or if he does not possess the nationality of either of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
  1. Where, under the provisions of paragraph 1 st , a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall settle the question by mutual agreement.

 

Art. 5. – Permanent establishment

  1. For the purposes of this Convention, the expression “permanent establishment” means a fixed place of business through which an enterprise carries out all or part of its activity.

 

  1. The term “permanent establishment” includes especially:
(a) an executive seat,
(b) branch,
(c) a desk,
(d) factory,
(e) a workshop,
(f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources,
(g) a farm or plantation,
(h) a warehouse in relation to a person providing storage facilities for others,
(i) a construction site, assembly or surveillance activities carried out there, but only when this site or these activities last more than 6 months and
(j) the provision of services, including consultancy services, by a resident of one of the Contracting States acting through employees or other personnel engaged by the enterprise for that purpose, but only when activities of that nature continue for the same or a related project in the territory of the other Contracting State for a period or periods representing a total of more than 6 months within the limits of any period of twelve months.
  1. Notwithstanding the preceding provisions of this article, it is considered that there is no “permanent establishment” if:

 

(a) facilities are used for the sole purpose of storing or displaying goods belonging to the company;
(b) goods belonging to the company are stored for the sole purpose of storage or display;
(c) goods belonging to the company are stored for the sole purpose of processing by another company;
(d) a fixed place of business is used for the sole purpose of purchasing goods or gathering information, for the business;
(e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.
  1. Notwithstanding the provisions of paragraphs 1 and 2, when a person – other than an agent enjoying an independent status to which paragraph 6 applies – acts in a Contracting State on behalf of the enterprise of the other State Contracting State, the enterprise is considered to have a permanent establishment in the first Contracting State, if the said person

 

(a) has in the first State the powers which he habitually exercises there enabling him to conclude contracts on behalf of the enterprise, unless the activities of that person are limited to the purchase of goods for the enterprise;
(b) not having such powers, it usually keeps in the first State a stock of goods belonging to the enterprise to which it regularly executes orders or makes deliveries on behalf of the enterprise; Where
(c) not having such powers, it usually ensures orders in the first State exclusively or almost exclusively either for the company, or for the company and other companies that this company controls or which have a right of control over this company. Business.
  1. Notwithstanding the foregoing provisions of this article, an insurance undertaking of a Contracting State is considered, except in matters of reinsurance, as having a permanent establishment in the other State if it collects premiums in the territory of that other State or insures the risks incurred therein, through a person other than an agent enjoying an independent status within the meaning of paragraph 6 of this article.

 

  1. An enterprise of a Contracting State is not deemed to have a permanent establishment in the other Contracting State by the sole fact that it carries on business in that other State through a broker, a commission agent or any other intermediary enjoying an independent status if these persons act in the ordinary course of their activity. However, when the activities of such an agent are carried out exclusively or almost exclusively either on behalf of this company or on behalf of this company and other companies which this company controls or which have a right of control over this company, he is not considered to be an independent agent within the meaning of this paragraph.

 

  1. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business there (whether through an establishment stable or not) is not in itself sufficient to make any one of these companies a permanent establishment of the other.

 

Art. 6. – Real estate income

 

  1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

 

  1. The expression “immovable property” has the meaning assigned to it by the law of the Contracting State in which the property in question is situated. The expression includes, in any case, the accessories, the dead or alive livestock of agricultural and forestry operations, the rights to which the provisions of private law apply concerning land ownership, the usufruct of real estate and the rights to variable payments. or fixed for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources; ships, boats and aircraft are not considered real property.

 

  1. The provisions of paragraph l st apply to income derived from the direct use, letting or leasing, as well as any other form of immovable property.

 

  1. The provisions of paragraphs 1 and 3 also apply to income from immovable property of a business as well as to income from immovable property used for the exercise of an independent profession.

 

Art. 7. – Business profits

  1. The income or profits of an enterprise of a Contracting State may be taxed only in that State, unless the enterprise carries on its activity in the other Contracting State through a permanent establishment therein. is located. If the business carries on its business in such a way, the income or profits of the business may be taxed in the other State but only to the extent that they are attributable.

 

(a) said permanent establishment;
(b) to sales, in that other State, of goods of the same or similar nature as those sold by the permanent establishment; Where
(c) to other commercial activities carried on in that other State of the same or similar nature as those carried on by the permanent establishment.
  1. Subject to the provisions of paragraph 3 of this article, when an enterprise of a Contracting State carries on its activity in the other Contracting State through a permanent establishment situated therein, it shall be charged, in each State contracting, to this permanent establishment the income or profits that it could have achieved if it had set up a separate enterprise carrying out identical or similar activities under identical or similar conditions and dealing in complete independence with the enterprise of which it constitutes a stable establishment.

 

  1. To determine the profits of a permanent establishment, the expenses incurred for the purposes pursued by this permanent establishment are allowed as a deduction, including management expenses and general administrative expenses thus incurred, either in the State in which the said establishment is located. permanent establishment or elsewhere. However, no deduction is allowed for the sums which would be, if applicable, paid (for other purposes than the reimbursement of costs incurred) by the permanent establishment at the head office of the company or at anyone from its offices, as royalties, fees or other similar payments, for the use of patents or other rights, or as commission, for specific services rendered or for management activity or, except in the case of a company banking, as interest on amounts loaned to the permanent establishment. Likewise, in calculating the profits of a permanent establishment, sums (other than the reimbursement of costs incurred) charged by the permanent establishment to the debit of the head office of the company or of any of its other offices, as royalties, fees or other similar payments, for the use of patents or other rights, or as commission for specific services rendered or for management activity or, except as of a banking enterprise, as interest on sums loaned to the central office of the enterprise or to any of its other offices.

 

  1. While it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of a certain percentage of the gross receipts of the enterprise or permanent establishment or on the basis of a distribution of the total profits of the enterprise among its various parts, nothing in paragraph 2 of this article shall prevent that Contracting State from determining the taxable profits according to the method in use; the distribution method adopted must, however, be such that the result obtained complies with the principles contained in this article.
  2. No income or profit is charged to a permanent establishment simply because it has purchased goods for the business.

 

  1. For the purposes of the preceding paragraphs, the income or profits to be attributed to the permanent establishment are determined each year using the same method, unless there are valid and sufficient reasons for proceeding otherwise.

 

  1. Where income or profits include items of income treated separately in other articles of this Convention, the provisions of those Articles shall not be affected by the provisions of this article.

 

Art. 8. – Maritime and air navigation

  1. Income or profits which an enterprise of a Contracting State derives from the operation in international traffic of aircraft shall be taxable only in that Contracting State.
  2. The income or profits which an enterprise of a Contracting State derives from the operation, in international traffic, of ships may be taxed in the other Contracting State, but the tax imposed in that other State is reduced by 50 percent. of its amount.
  3. The provisions of paragraphs 1 and 2 also apply to income or profits from the participation in a pool, a joint business or an international operating agency.

Art. 9. – Associated companies

 

When

 

(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and of an enterprise of the other Contracting State,

and that, in either case, the two companies are, in their commercial or financial relations, bound by conditions agreed or imposed which differ from those which would be agreed between independent companies, the income or the profits which, without these conditions, would have been carried out by one of the companies but could not in fact be carried out because of these conditions, can be included in the income or profits of that company and taxed accordingly.

 

 

Art. 10. – Dividends

 

  1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

 

  1. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the legislation of that State, but if the person who receives the dividends is the beneficial owner, the tax thus established cannot exceed:
(a)

in the case of Thailand:

15 percent of the gross amount of dividends;
(b)

in the case of Luxembourg:

i) 5 percent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which directly owns at least 25 percent of the capital of the company paying the dividends;
ii) 15 percent of the gross amount of the dividends, in all other cases.

This paragraph does not affect the taxation of the company in respect of the profits out of which the dividends are paid.

 

  1. The term “dividends” used in this article designates income from shares, mine shares, founder’s shares or other beneficiary shares with the exception of claims, as well as income from other shares subject to the same tax regime. as income from shares by the legislation of the State of which the distributing company is a resident.

 

  1. The provisions of paragraphs 1 and 2 do not apply when the beneficial owner of the dividends, resident in a Contracting State, exercises in the other Contracting State of which the company paying the dividends is a resident, either an industrial or commercial activity. through a permanent establishment located there, or an independent profession by means of a fixed base located there, and that the dividend-generating participation is effectively attached to it. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.

 

  1. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not levy any tax on the dividends paid by the company, except to the extent that such dividends are payable. paid to a resident of that other State or to the extent that the dividend-generating participation is effectively attached to a permanent establishment or to a fixed base situated in that other State, nor to levy any tax, in respect of the taxation of profits not distributed, out of the undistributed profits of the company, even if the dividends paid or the undistributed profits consist wholly or in part of profits or income deriving from that other State. The provisions of this paragraph shall not be interpreted as preventing Thailand from levying,

 

Art. 11. – Interest

 

  1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

 

  1. However, such interest is also taxable in the Contracting State from which it originates and according to the legislation of that State, but if the person who receives the interest is the beneficial owner, the tax thus established may not exceed:

 

(a) 10 percent of the gross amount of interest received by a financial institution (including an insurance company);
(b) 15 percent of the gross amount of interest, in all other cases.
  1. Notwithstanding the provisions of paragraph 2, interest accruing in a Contracting State and paid to the Government of the other Contracting State is exempt from tax in the first Contracting State.

For the purposes of this paragraph, the term “Government”

 

(a)

means, in the case of Thailand, the Government of the Kingdom of Thailand and comprises:

(i) the Bank of Thailand;
(ii the local collectives; and
(iii all institutions the capital of which is wholly owned by the Government of the Kingdom of Thailand or by its local communities or public establishments, when it has been so agreed from time to time by the competent authorities of the two Contracting States;
(b) means, in the case of Luxembourg, the Government of the Grand Duchy of Luxembourg and comprises:
c) institutions whose capital is wholly owned by the Government of the Grand Duchy of Luxembourg or by its local authorities or public establishments, when it has been so agreed periodically by the competent authorities of the two Contracting States.
  1. The term “interest” used in this article means income from debts of any kind, whether or not accompanied by mortgage guarantees or a profit-sharing clause of the debtor, and in particular income from public funds and loan obligations.

 

  1. The provisions of paragraphs 1 and 2 do not apply when the beneficial owner of the interest, resident in a Contracting State, exercises in the other Contracting State from which the interest arises, that is to say an industrial and commercial activity through the intermediary a permanent establishment located there, or an independent profession by means of a fixed base located there, and that the interest-generating claim actually relates to:
(a) at that permanent establishment or fixed base, or
(b) the business activities referred to in subparagraph (c) of paragraph 1 st of article 7

In such cases, the provisions of article 7 or article 14, as the case may be, shall apply.

 

  1. Interest is considered as accruing from a Contracting State when the debtor is that State itself, a local authority or a resident of that State.  However, when the debtor of the interest, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment, or a fixed base, for which the debt giving rise to the payment of interest has been contracted and which bears the cost of these interests, they are considered as coming from the State where the permanent establishment, or the fixed base, is located.

 

  1. When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of interest, taking into account the claim for which they are paid, exceeds that of which agreed between the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account the other provisions of this Convention.

 

 

Art. 12. – Royalties

 

  1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

 

  1. However, these royalties are also taxable in the Contracting State from which they originate and according to the legislation of that State, but if the person who receives the royalties is the beneficial owner, the tax thus established cannot exceed 15 per cent. the gross amount of the royalties.

 

  1. The term “royalties” used in this article means remuneration of any kind paid for the use or the concession of the use of a copyright in a literary, artistic or scientific work, including cinematographic films, or films or tapes for radio or television, of a patent, of a trade mark, of a design or of a model, of a plan, of a formula or of a secret process, or for the use or concession of the use of industrial, commercial or scientific equipment, or for information relating to the experience acquired in the industrial, commercial or scientific field.

 

  1. The provisions of paragraphs 1 and 2 do not apply when the beneficial owner of the royalties, resident in a Contracting State, exercises in the other Contracting State from which the royalties originate, that is to say an industrial and commercial activity through the intermediary a permanent establishment located there, or an independent profession by means of a fixed base located there, and that the right or property generating the royalties is actually attached:
(To) at that permanent establishment or fixed base, or
(b) the business activities referred to in subparagraph (c) of paragraph l st of Article 7.

In such cases, the provisions of article 7 or article 14, as the case may be, shall apply.

 

  1. Royalties are considered to arise from a Contracting State when the debtor is that State itself, a local authority or a resident of that State. However, when the debtor of the royalties, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment, or a fixed base, for which the commitment giving rise to the payment of the royalties has been contracted and who bears the burden of these fees, they are considered to come from the State where the permanent establishment, or the fixed base, is located.

 

  1. When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of the royalties, taking into account the service for which they are paid, exceeds that of which agreed between the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account the other provisions of this Convention.
  2. The provisions of this article shall also apply to gains from the alienation of any right or property generating royalties when such right or property is alienated by a resident of a Contracting State for the exclusive use in the other State. The contracting party and that the payment for that right or that good is borne by an enterprise of that other State or by a permanent establishment situated there.

 

 

Art. 13. – Capital gains

  1. Gains which a resident of a Contracting State derives from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

 

  1. Gains from the alienation of movable property which form part of the assets of a permanent establishment which an enterprise of one Contracting State has in the other Contracting State, or from the movable property which belongs to a fixed base of which a resident of a Contracting State has in the other Contracting State for the exercise of an independent profession, including such gains arising from the alienation of this permanent establishment (alone or with the whole enterprise) or of this fixed base, are taxable in that other State.

 

  1. Gains which an enterprise of a Contracting State derives from the alienation of ships or aircraft operated in international traffic or from movable property used in the operation of such ships or aircraft shall be taxable only in that State.

 

  1. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 of this article and in paragraph 7 of article 12, may be taxed only in the Contracting State of which the transferor is a resident. The provisions of this paragraph shall not prevent either Contracting State from taxing gains or income from the sale or transfer of shares or other securities.

 

 

Art. 14. – Independent professions

 

  1. Income which a resident of a Contracting State derives from a liberal profession or other activities of an independent character may be taxed only in that State; however, such income may also be taxed in the other Contracting State in the following cases:

 

(a) if that resident has in the other Contracting State a fixed base for the exercise of his activities for a period or periods of a total duration equal to or greater than 183 days during any period of twelve months; in this case, only the fraction of the income which is attributable to the said fixed base may be taxed in that other State; Where
(b) if his stay in the other Contracting State is for a period or periods totaling 183 days or more during any twelve-month period; in this case, only the fraction of the income which is derived from activities carried on in that other State may be taxed in that other State; Where
(c) if the remuneration for its activities in the other Contracting State is paid by a resident of that Contracting State or is borne by a permanent establishment or a fixed base situated in that Contracting State; in this case, only the fraction of the income received in this respect may be taxed in that other State.
  1. The term “professional services” includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, dentists, lawyers, engineers, architects and accountants.

 

Art. 15. – Dependent professions

 

  1. Subject to the provisions of Articles 16, 18, and 19, wages, salaries, and other similar remuneration which a resident of a Contracting State receives in respect of paid employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

 

  1. Notwithstanding the provisions of paragraph l st of this Article, the remuneration that a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in that State if:

 

(a) the beneficiary stays in the other State for a total period of 183 days in any twelve-month period, and or periods not exceeding
(b) the remuneration is paid by or on behalf of an employer who is not a resident of the other State, and
(c) the cost of remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
  1. Notwithstanding the foregoing provisions of this article, remuneration received in respect of salaried employment exercised on board a ship or an aircraft operated in international traffic, by an enterprise of a Contracting State, shall be taxable only in this State.

 

Art. 16. – Tantièmes

  1. Directors’ fees, attendance fees and other similar remuneration received by a resident of a Contracting State in his capacity as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting State may be taxed in this other state.

 

  1. Salaries, wages and other similar remuneration which a resident of a Contracting State receives in his capacity as an officer in a high-level managerial position in a company which is a resident of the other Contracting State may be taxed in that other State. .

 

Art. 17. – Artists and athletes

 

  1. Notwithstanding the provisions of Articles 14 and 15, the income which a resident of a Contracting State derives from his personal activities carried on in the other Contracting State as a performing artist, such as a theater or film artist, radio or television, or that a musician, or as an athlete, are taxable in that other State.

 

  1. When the income from activities that an entertainer or an athlete exercises personally and in this capacity are attributed not to the artist or to the athlete himself but to another person, this income is taxable, notwithstanding the provisions of the Articles 7, 14 and 15, in the Contracting State where the activities of the artist or sportsman are carried out.

 

3.The provisions of paragraphs 1 and 2 of this Article shall not apply to the remuneration or benefits, wages, salaries, and other similar income which an entertainer or sportsman derives from his activities performed in a Contracting State, when the stay in that Contracting State is predominantly financed by public funds of the other Contracting State, including a local authority or a public establishment of that other State.

 

  1. Notwithstanding the provisions of article 7, when the activities mentioned in paragraph 1 of this article are carried out in a Contracting State by an enterprise of the other Contracting State, the profits which this enterprise derives from the performance of these activities may be taxed in the first Contracting State, unless the company is, in relation to the provision of said activities, financed for a preponderant part by public funds of the other Contracting State, including a local authority or a public establishment of that other State.

 

Art. 18. – Pensions and social security payments

 

  1. Subject to the provisions of paragraph 2 of article 19, pensions and other similar remuneration paid to a resident of a Contracting State in respect of previous employment may be taxed in that State.

 

  1. However, such pensions and other similar remuneration may also be taxed in the other Contracting State if the payment is made by a resident of that other State or by a permanent establishment situated there.

 

  1. Notwithstanding the provisions of paragraphs 1 and 2, pensions and other sums paid under a public scheme which forms part of the social security legislation of a Contracting State or of its local authorities, shall be taxable only in that State.

 

Art. 19. – Public functions

1.

(a) Remuneration, other than pensions, paid by a Contracting State or one of its local communities to a natural person, in respect of services rendered to that State or to that community, maybe taxed only in that State.
(b)

However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and if the natural person is a resident of that State who:

(i) has the nationality of that state; Where
(ii) did not become a resident of that State for the sole purpose of rendering the services.

2.

(a) Pensions paid by a Contracting State or one of its local communities, either directly or by deduction from funds which they have established, to a natural person, for services rendered to that State or to that community, are not taxable only in that state.
(b) However, these pensions are taxable only in the other Contracting State if the natural person is a resident of that State and holds its nationality.
  1. The provisions of Articles 15, 16 and 18 apply to remuneration and pensions paid for services rendered within the framework of an industrial or commercial activity exercised by a Contracting State or one of its local communities.

 

Art. 20. – Students

 

A natural person who was, immediately before going to a Contracting State, a resident of the other Contracting State and who is staying in the first Contracting State for the sole purpose of:

 

(a) study at a university or other recognized educational institution; Where
(b)

to receive training in order to qualify to practice a profession or operate a business; 

Where

(c)

to study or carry out research as a recipient of a scholarship, stipend or award received from a governmental, religious, charitable, scientific, literary or educational organization;

is exempt from tax in the first State on:

 

(i) the sum that this person receives from abroad to cover his maintenance, study, research or training costs;
(ii scholarship, allowance or prize; and
(iii income received in consideration for personal services rendered in that State provided that the income constitutes the sums necessary to cover his expenses of maintenance and studies.

Art. 21. – Professors, teachers and researchers

 

  1. An individual who is a resident of a Contracting State immediately before traveling to the other Contracting State and who, at the invitation of a university, college, school or other institution of similar teaching recognized by the competent authority of that other Contracting State, stays in that other Contracting State solely for the purpose of teaching or carrying out research, or both, in that educational institution, for a period of not exceeding two years, is exempt from tax in that other Contracting State on any remuneration received for such teaching or research.

 

  1. This article only applies to income received for research, if such research is undertaken by a natural person in the public interest and not primarily for the benefit of another private person or other private persons.

 

 

Art. 22. – Income not expressly mentioned

 

Items of income of a resident of a Contracting State which are not expressly mentioned in the preceding articles of this Convention shall be taxable only in that State; however, if these items of income arise from sources situated in the other Contracting State, they may also be taxed in that other State.

 

Art. 23. – Fortune

 

  1. The fortune constituted by immovable property referred to in Article 6, owned by a resident of a Contracting State and which is situated in the other Contracting State, may be taxed in that other State.

 

  1. The fortune constituted by movable property which forms part of the assets of a permanent establishment that an enterprise of a Contracting State has in the other Contracting State, or by movable property which belongs to a fixed base of which a resident a Contracting State has in the other Contracting State for the exercise of an independent profession, is taxable in that other State.

 

  1. All other elements of the capital of a resident of a Contracting State are taxable only in that State.

 

 

Art. 24. – Elimination of double taxation

 

  1. The laws in force in either Contracting State shall continue to govern the taxation of income and capital in the respective Contracting States unless this Convention provides for formal provisions to the contrary. Where income or capital is subject to tax, in both Contracting States, double taxation shall be eliminated in accordance with the following paragraphs of this article.

 

  1. In the case of Thailand, double taxation is avoided as follows:

Subject to the provisions of Thai law relating to the deduction of Thai tax from tax due in any other state, except Thailand, when a resident of Thailand receives income from Luxembourg which in accordance with the provisions of this Convention, are taxable in Luxembourg, the amount of Luxembourg tax due as a result of such income is deducted from Thai tax imposed on this resident. The amount of the deduction may not, however, exceed the fraction of Thai tax that corresponds to such income.

 

3.In the case of Luxembourg, double taxation is avoided as follows:

 

(a) Where a resident of Luxembourg receives income or possesses capital which, in accordance with the provisions of this Convention, is taxable in Thailand, Luxembourg shall exempt such income or capital from tax, subject to the provisions of sub-paragraphs b) and c), but may, in order to calculate the amount of tax on the remainder of the resident’s income or capital, apply the same tax rates as if the income or capital had not been exempted.
(b) When a resident of Luxembourg receives income which, in accordance with the provisions of paragraph 2 of article 8, articles 10, 11, 12, paragraph 4 of article 13 and article 22, is taxable in Thailand, Luxembourg grants a deduction from the tax it collects on the income of this resident in an amount equal to the tax paid in Thailand. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to these items of income received from Thailand.
(c) When a company which is a resident of Luxembourg receives dividends from Thai sources, Luxembourg exempts such dividends from tax, provided that the company which is a resident of Luxembourg has held, since the beginning of its operating year, a direct participation at least 25 percent of the capital of the company paying the dividends. The aforementioned shares of the Thai company are, under the same conditions, exempt from Luxembourg wealth tax.
(d)

For the purposes of subparagraph (b), the term “tax paid in Thailand” is intended to include the amount of Thai tax that would have been paid under Thai law in the absence of the exemptions or reductions in tax provided for by special legislation of Thailand intended to promote economic development in Thailand, applicable on the date of signature of this Convention or introduced subsequently and which would modify or add to existing legislation. However, the amount of tax referred to in this subparagraph may not exceed:

 

(i) 15 percent of the gross amount of dividends;
(ii) 10 percent of the gross amount of interest referred to in subparagraph (a) of paragraph 2 of Article 11;
(iii) 15 percent of the gross amount of interest referred to in subparagraph (b) of paragraph 2 of Article 11;
(iv 15 percent of the gross amount of the royalties.

The provisions of this subparagraph shall apply only for a period of 12 years beginning on the first of January of the fiscal year next following that in which the Convention enters into force. This period may be extended by mutual agreement between the competent authorities.

 

Art. 25. – Non-discrimination

 

  1. Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or obligation relating thereto which is different or heavier than those to which nationals of that other State who are in the same State are or may be subject. Situation.

 

  1. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State is not established in that other State in a less favorable manner than the taxation of enterprises of that other State which carry out the same activity.

 

  1. Companies of a Contracting State, the capital of which is wholly or in part, directly or indirectly, owned or controlled by one or more residents of the other Contracting State, are not subject in the first State to any taxation or obligation therein. relative, which is different or heavier than those to which the other similar enterprises of the first State are or may be subject.

 

4.The provisions of this article. cannot be interpreted as obliging a Contracting State to grant to the residents of the other Contracting State the personal deductions, allowances and reductions of tax according to the situation or the family responsibilities which it grants to its own residents.

 

  1. The provisions of this article apply only to taxes which are the subject of this Convention.

 

Art. 26. – Amicable procedure

 

  1. Where a resident of a Contracting State considers that the measures taken by a Contracting State or by both Contracting States involve or will result for him or her in taxation not in accordance with the provisions of this Convention, he may, independently of the remedies provided by the law of these States, submit his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of this Convention.

 

  1. The competent authority shall endeavor, if the complaint appears to it to be justified and if it is not itself able to find a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, for the avoidance of taxation which is not in accordance with the Convention.

 

  1. The competent authorities of the Contracting States shall endeavor, by mutual agreement, to resolve any difficulties or to dispel any doubts which may arise in the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

 

  1. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement as indicated in the preceding paragraphs.

 

Art. 27. – Exchange of information

 

  1. The competent authorities of the Contracting States shall exchange the information necessary to apply the provisions of this Convention or those of the internal legislation of the Contracting States relating to the taxes covered by the Convention insofar as the taxation it provides is not contrary. to the Convention. Information received by a Contracting State shall be kept secret in the same way as information obtained under the domestic law of that State and shall only be communicated to persons or authorities (including courts and administrative bodies) concerned by the. establishment or collection of taxes covered by the Convention, by proceedings or prosecutions relating to such taxes, or by decisions on appeals relating to such taxes. These persons or authorities only use this information for these purposes. They may use this information in public court hearings or in judgments.

 

  1. The provisions of paragraph 1 may in no case be interpreted as imposing on a Contracting State the obligation:

 

(a) to take administrative measures at variance with its laws and administrative practice or those 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 provide information which would reveal a trade secret, industrial, professional or a trade process or information the communication of which would be contrary to public order.

Art. 28. – Diplomatic agents and consular officials

 

The provisions of this Convention shall not affect the fiscal privileges enjoyed by diplomatic agents or consular officials by virtue either of the general rules of international law or of the provisions of special agreements.

 

Art. 29. – Exclusion of certain companies

 

This Agreement does not apply to holding companies within the meaning of specific Luxembourg legislation currently governed by the law of July 31, 1929, and the Grand-Ducal decree of December 17, 1938, nor to companies subject in Luxembourg to tax legislation. similar. It also does not apply to income earned by a resident of Thailand from such companies or to shares or other equity securities of such companies that that person owns.

 

Art. 30. – Entry into force

 

  1. This Convention shall be ratified and the instruments of ratification shall be exchanged at

Luxembourg as soon as possible.

 

  1. The Convention will enter into force by the exchange of the instruments of ratification and its provisions will be applicable:

 

(a) Taxes withheld at source on amounts paid or credited on or after 1 st January following the year immediately following that in which the instruments of ratification are exchanged;
(b) to other taxes on income and on capital due for any fiscal year or accounting period beginning on or after January 1 of the year immediately following that in which the instruments of ratification have been exchanged.

Art. 31. – Denunciation

This Convention shall remain in force indefinitely, but either of the Contracting States may give written notice through the diplomatic channel of its denunciation to the other Contracting State no later than June 30 of any calendar year beginning after the end of the year. ‘expiration of a period of five years from the date of its entry into force.

 

In this event, the Convention will cease to be applicable:

 

(a) Taxes withheld at source on amounts paid or credited on or after 1 st January of the year next following that in which the notice is given;
(b) other taxes on income and wealth due for any tax year or accounting period beginning on or after 1 st January following the year immediately following that in which the notice is given.

IN WITNESS WHEREOF the undersigned, being duly authorized for this purpose, have signed this Convention.

 

DONE in duplicate at Bangkok on May 6, 1996, of the Thai and English era, all texts being equally authentic.

 

Want to know more about LUXEMBOURG with Damalion?

Damalion offers you from bespoke advice by directly operational experts in the fields that challenge your business.
We advice you to give information at its best, so we can qualify your demand and revert to you under the next 8 hours.