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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
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DT: Thailand: double taxation agreement, Article 11: Dividends

 

(1)

(a) A dividend paid by a company which is a resident of the United Kingdom to a resident of Thailand may be taxed in Thailand.
(b) Where, under paragraph (2) of this Article, a resident of Thailand is entitled to a tax credit in respect of that dividend, tax may also be charged in the United Kingdom and according to the laws of the United Kingdom on the aggregate of the amount or value of the dividend and the amount of the tax credit at a rate not exceeding 15 per cent.
(c) Except as provided in sub-paragraph (b) of this paragraph, a dividend paid by a company which is a resident of the United Kingdom to a resident of Thailand who is subject to tax in Thailand in respect of that dividend shall be exempt from any tax in the United Kingdom which is chargeable on dividends.

(2) A resident of Thailand who receives a dividend from a company which is a resident of the United Kingdom and who is subject to tax in Thailand on that dividend shall be entitled to the tax credit in respect of that dividend which an individual resident in the United Kingdom would have been entitled to had he received that dividend and to the payment of any excess of that tax credit over his liability to United Kingdom tax. However, this paragraph shall not apply where the recipient of the dividend is a company which either alone or together with one or more associated companies directly or indirectly controls at least 10 per cent of the voting power in the company paying the dividend; for this purpose, two companies shall be deemed to be `associated` if one is directly or indirectly controlled by the other, or both are directly or indirectly controlled by a third company.

(3) A dividend paid by a company which is a resident of Thailand to a resident of the United Kingdom may be taxed in the United Kingdom. The dividend may also be taxed in Thailand but where the recipient of the dividend is subject to tax thereon in the United Kingdom the Thai tax so charged shall not exceed:

(a) 15 per cent of the gross amount of the dividend if the company paying the dividend engages in an industrial undertaking and the recipient of the dividend is a company which is a resident of the United Kingdom and controls at least 25 per cent of the voting power of the company paying the dividend;
(b) 20 per cent of the gross amount of the dividend if the company paying the dividend engages in an industrial undertaking or if the recipient of the dividend is a company which is a resident of the United Kingdom and controls at least 25 per cent of the voting power of the company paying the dividend.

(4) For the purposes of paragraph (3) of this Article, the term `industrial undertaking` means:

(a) any undertaking engaged in:

(i) manufacturing, assembling and processing;
(ii) construction, civil engineering and ship building;
(iii) mining, exploration for and exploitation of natural resources;
(iv) production of electricity, hydraulic power, gas or the supply of water; or
(v) agriculture, forestry and fishery and the carrying on of a plantation;

(b) any other undertaking within the scope of the laws of Thailand relating to the promotion of industrial investment;
(c) any other undertaking declared to be an `industrial undertaking` for the purposes of this Article by the competent authority of Thailand.

(5) The preceding paragraphs of this Article shall not affect the taxation of the company in respect of the profits out of which the dividend is paid.

(6) The provisions of paragraphs (1) and (2) or, as the case may be, paragraph (3) of this Article shall not apply if the recipient of the dividend, being a resident of a Contracting State, has in the other Contracting State of which the company paying the dividend is a resident, a permanent establishment with which the holding by virtue of which the dividend is paid is effectively connected. In such a case the provisions of Article 8 shall apply.

(7) 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 impose any tax on a dividend paid by the company to persons who are not residents of that other State, or subject the undistributed profits of the company to a tax on undistributed profits, even if the dividend paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

(8) As used in this Article the term `dividend` means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights treated in the same manner as income from shares by the taxation law of the State of which the company making the distribution is a resident and any other item treated as a distribution under that law.