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a person is a resident of one state, and is already an
employee of a resident of that state goes to the other
state to receive either technical, professional, or business
training, or to engage in study at a recognized university,
he shall also be exempt from taxation in the other state
for a period not exceeding 12 consecutive months and for
an aggregate amount of 7,500 United States dollars(or
its equivalent in Thai currency).(45)
Teachers
and Researchers: Article 23 provides
that an individual visiting a contracting state for a
period not exceeding two years for the purpose of teaching
or engaging in research at a recognized educational institution
shall be exempt from taxation in the state he is visiting.(46)
Other
Income: Article 24 provides that
other income shall be taxable in the state where the recipient
resides.(47) An example
of other income is gambling winnings.(48)
Paragraph 2 however provides an exception, where the other
income derives from property or right effectively connected
with a permanent establishment or fixed base in the other
contracting state; in such cases Article 7(Business Profits)
or Article 15 (Independent Personal Services ) shall apply,
and the other contracting state may tax so much of the
other income as is attributable to the permanent establishment
or fixed base.
Relief
from Double Taxation: Article 25 provides
for the relief from double taxation in the following manner.
The United States shall allow a tax credit to a resident
or citizen of the United States for the income tax paid
to Thailand by either individuals or United States companies.(49)
The Thai government will also give a credit for United
States tax payable in respect to income that is subject
to taxation by both contracting states.(50)
Non-Discrimination
and Mutual Agreement Procedure: Article 27 provides
that nationals and enterprises of a contracting state
shall not be subjected in the other Contracting state
to any taxation measure which is more burdensome than
nationals of the other state are subjected to in the same
circumstances.(51)
Article
27 provides a mutual agreement procedure by which an individual
that believes that tax is being assessed not in compliance
with the treaty may present his case to the competent
authority of the state where he resides.(52)
If the individual believes that the tax is being assessed
in violation of the Non-Discrimination Article, he may
present his case to the state of which he is a national.
There is a three year statute of limitation on grievances.
Further, an individual does not waive any other remedies
he may have under domestic law by exercising his rights
under the Convention. The competent authorities shall
attempt to resolve any difficulties by mutual agreement.
However paragraph 2 provides that the taxpayer's objection
must be "justified" for the competent authorities to endeavor
to resolve the case.(53)
Exchange
of Information: Article 28 provides
that the competent authorities of each state agree to
exchange information for the purpose of carrying out the
provisions of this Convention.(54)
All information shall be secret, and shall be disclosed
only to authorized government agencies. The Convention
omits the provision in the Model Treaty that expands this
article to include assistance in the collection of taxes.(55)
Although
article 28 purports to mandate an exchange of information,
the obligation to provide information does not go beyond
what is "necessary" for carrying out the convention
and the domestic laws of the contracting states.(56)
Paragraph
3 of Article 28 further qualifies the obligation by stating
that a state that is requested to supply information to
the other state has a duty to obtain information in the
same manner and to the same extent as if it were obtaining
information in order to collect its own taxes. Paragraph
3 provides that the application of paragraph 2 shall be
suspended until such time as the government of Thailand
sends a diplomatic note stating that it is prepared to
comply with this provision.
Conclusion:
The Convention between the United States
and Thailand is a tax treaty that is intended to prevent
double taxation and fiscal evasion. The Convention will
become effective upon ratification by the United States
legislature, possibly as soon as 1998. The Convention
should stimulate trade and investment between the two
states. The treaty will also make it easier for individuals
engaged in occupations, students, and researchers to travel
between the two states.
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