| Limitation
on Benefits: Article 16 of the
Convention is directed to the avoidance of treaty shopping
by third state nationals. The first paragraph specifies
the requirements for a company, or juridicial person to
be entitled to the benefits of the Convention. Thus at
least 50 percent of the beneficial interest or stock ownership
must be by persons entitled to benefits under the other
provisions of the treaty, and at no more than 50 percent
of the gross income may be used to meet liabilities to
persons not entitled to benefit under the Convention.
A corporation would also be entitled to the benefits of
the convention if it could be shown that its stock was
publicly traded on a recognized stock exchange.
Paragraphs
3 and 4 of Article 18 provide that residents of Thailand
that are defined under the domestic law of Thailand as
"international banking facilities" will generally
be excluded from the benefits of the Convention unless
a special exception is made for them by the competent
authorities.
Artistes
and Sportsmen: Article 19 of the Convention
makes articles 14 and 15, relating to independent and
dependent services inapplicable, in the case of artistes
and sportsmen. The article provides that the income of
artistes or sportsmen residing in one state may be taxed
on his income attributed to activities in the other state
only if that income exceeds either 100 United States dollars
per day, or an aggregate amount of 3,000 United States
dollars per year (or the equivalent in Thai currency).(37)
The provision of the section does not apply to entertainers
who are wage earners supported by public funds, or in
government service.(38)
Pensions,
Social Security Payments, Annuities, Alimony and Child
Support: Article 20 covers four types
of payments which share the trait that they are typically
paid or received by individuals as "personal"
items. Pensions, social security payments, annuities,
alimony and child support payments paid to the resident
of a contracting state shall be taxable only in the state
where they arise.(39)
Government
Service: Remuneration paid by a contracting
state or a political subdivision of that contracting state
shall be taxable in that state. The remuneration will
also be taxable in the other state if the individual is
a national of that state or he is a resident of that state
who did not gain residency solely for the purpose of rendering
those services.(40) Pensions
paid for service to a contracting state in another resident
state are taxable in the first state, except if the individual
is a national resident of the other state, in which case
the pension shall be taxable only in the other state.(41)
Students
and Trainees: Grants, allowances or awards for
students and trainees residing in the other contracting
states shall be taxable only in the state in which they
arise, and will be exempt from taxation in the other contracting
state.(42) This exemption
applies to students studying at recognized universities
or educational institutions, or receiving training to
qualify the individual for a profession, or an individual
studying or doing research as a recipient of a special
grant, allowance, or award. The exemption will include
remuneration for income received in the other contracting
state so long as the income does not exceed 3,000 United
States dollars (or the equivalent in Thai baht) for any
tax year.(43) This exemption
will have a duration of 5 years.(44)
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