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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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DT: Thailand: double taxation agreement, Article 23: Elimination of double taxation

(1) In the case of the United Kingdom and subject to the provisions of the law of theUnited Kingdom regarding the allowance as a credit against United Kingdom tax of taxpayable in a territory outside the United Kingdom (which shall not affect the generalprinciple hereof):

(a) Thai tax payable under the laws of Thailand and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Thailand (excluding, in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Thai tax is computed.
(b) Where a dividend is paid by a company which is a resident of Thailand to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 25 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Thai tax for which credit may be allowed under the provisions of subparagraph (a) of this paragraph) the Thai tax payable by the company in respect of the profits out of which such dividend is paid.

(2) For the purposes of paragraph (1) of this Article, the term `Thai tax payable`shall be deemed to include any amount which would have been payable as Thai tax for anyyear but for an exemption or reduction of tax granted with a view to promoting industrial,commercial, scientific, educational or other development in Thailand, for that year or anypart thereof under:

(a) Sections 31 and 35(3) (but only to the extent that the exemption or reduction allowed by those provisions would not have been available if those provisions had not been enacted), 33, 34, 35(2) and 35(4) of the Investment Promotion Act BE2520 so far as they were in force on, and have not been modified since, the date of signature of this Convention, or have been modified only in minor respects so as not to affect their general character; or
(b) any other provision which may subsequently be made granting an exemption or reduction of tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character.
Provided that relief from United Kingdom tax shall not be given by virtue of this paragraph in respect of income from any source if the income arises in a period starting more than ten years after the exemption from or reduction of Thai tax was first granted in respect of that source.

(3) In the case of Thailand, United Kingdom tax payable in accordance with thisConvention in respect of income from sources within the United Kingdom shall be allowed asa credit against Thai tax payable in respect of that income. The credit shall not,however, exceed that part of the Thai tax, as computed before the credit is given, whichis appropriate to such item of income.

(4) For the purposes of paragraphs (1) and (3) of this Article profits, income and capitalgains owned by a resident of a Contracting State which may be taxed in the otherContracting State in accordance with this Convention shall be deemed to arise from sourcesin that other Contracting State.

(5) Where profits on which an enterprise of a Contracting State has been charged to tax inthat State are also included in the profits of an enterprise of the other State and theprofits so included are profits which would have accrued to that enterprise of the otherState if the conditions made between the enterprises had been those which would have beenmade between independent enterprises dealing wholly independently with each other, theamount included in the profits of both enterprises shall be treated for the purposes ofthis Article as income from a source in the other State of the enterprise of thefirst-mentioned State and relief shall be given accordingly under the provisions ofparagraph (1) or paragraph (3) of this Article.