Thailand

This Convention applies to persons resident in one or both Contracting States.

1. This Convention applies to income taxes levied by each Contracting State, its political subdivisions or its local entities, whatever the system of its levy.

2. Income taxes are those which tax the entire income or any part thereof, including taxes on profits resulting from the disposal of immovable property, taxes on the amount of wages or salaries paid by enterprises, as well as taxes on capital gains.

3. The current taxes to which this Convention specifically applies are:

(a) In Spain:

(i) Personal Income Tax;

(ii) corporation tax;

(hereinafter referred to as ‘the Spanish tax’);

(b) Thailand:

(i) Income Tax (the income tax);

(ii) The Oil Income Tax (the petroleum income tax);

(hereinafter referred to as ‘Thai tax’).

4. The Convention shall also apply 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 replaced by existing taxes. The competent authorities of the Contracting States shall communicate to each other any relevant amendments to their respective tax laws.

1. For the purposes of this Convention, unless the context of the Convention is different:

(a) the term ‘Spain’ means the Spanish State and, used geographically, designates the territory of the Spanish State including areas outside its territorial sea in which, under international law and under its domestic law, the Spanish State may exercise jurisdiction or rights of sovereignty over the seabed, its subsoil and superjacent waters, and its natural resources;

(b) the term ‘Thailand’ means the Kingdom of Thailand, comprising its territorial sea and areas outside it, including the seabed and its subsoil, over which the Kingdom of Thailand may exercise jurisdiction under its law and in accordance with international law;

(c) the terms ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or Thailand according to the context;

(d) the term ‘person’ includes natural persons, companies and any other grouping of persons;

(e) the term 'company' means any legal person or any entity which is considered a legal person for tax purposes;

(f) the terms ‘undertaking of one Contracting State’ and ‘undertaking of the other Contracting State’ mean, respectively, an undertaking operated by a resident of one Contracting State and an undertaking operated by a resident of the other Contracting State;

(g) the term ‘tax’ means Spanish tax or Thai tax according to the context;

(h) ‘national’ means:

(i) any natural person possessing the nationality of a Contracting State;

(ii) any legal person, company of persons, association and any other entity constituted under the law in force in a Contracting State;

(i) 'international traffic' means any transport carried out by a ship or aircraft operated by an undertaking of a Contracting State, except where the ship or aircraft is operated only between two points situated in the other Contracting State;

(j) the term ‘competent authority’ means in the case of Spain, the Minister of Economy and Finance or his authorised representative; and in the case of Thailand, the Minister of Finance or his authorised representative.

2. For the application of the Convention by a Contracting State, any expression not defined in the Convention shall have, unless its context is in conflict with a different interpretation, the meaning attributed to it by the law of that State concerning the taxes which are the subject of the Convention.

1. For the purposes of this Convention, the term ‘resident of a Contracting State’ means any person who, under the law of that State, is subject to taxation in that State by reason of his domicile, residence, place of incorporation, seat of address or any other criterion of a similar nature. However, this term does not include persons who are subject to taxation in this State solely for income they obtain from sources located in that State.

2. Where, under the provisions of paragraph 1, a natural person is a resident of both Contracting States, his or her situation shall be resolved as follows:

(a) This person shall be considered a resident of the State in which he or she has permanent housing at his or her disposal; if he or she has permanent housing at his or her disposal in both States, he or she shall be considered a resident of the State in which he or she maintains closer personal and economic relations (centre of vital interests);

(b) If it is not possible to determine the State in which that person has the centre of his or her vital interests, or if he or she does not have permanent housing at his or her disposal in any of the States, he or she shall be considered a resident of the Contracting State in which he or she habitually lives;

(c) If he habitually lives in both States or does not live in either State, he or she shall be considered a resident of the State of which he or she is a national;

(d) if he is a national of either State or is not a national of either State, the competent authorities of the two Contracting States shall decide the case by mutual agreement.

3. Where under the provisions of paragraph 1 a person other than a natural person is a resident of both Contracting States, the competent authorities of the Contracting States shall decide the case by mutual agreement.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which an undertaking carries out all or part of its activity.

2. The term ‘permanent establishment’ includes, in particular:

(a) the head offices;

(b) branches;

(c) Offices;

(d) factories;

(e) Workshops;

(f) mines, oil or gas wells, quarries or any other place of extraction of natural resources; and

(g) farms or plantations.

3. The expression ‘permanent establishment’ also includes:

(a) a construction, installation or assembly work, or related supervision activities, if the duration of such work or activity exceeds six months;

(b) the provision of services, including consultancy services, by a resident of one of the Contracting States through workers or other personnel, where such activities continue for the same or related project, carried out in the other Contracting State for a period or periods exceeding six months within any period of twelve months.

4. Notwithstanding the provisions of this Article, it is considered that the term ‘permanent establishment’ does not include:

(a) the use of facilities for the sole purpose of storing, displaying or delivering goods or goods belonging to the undertaking;

(b) the maintenance of a warehouse of goods or goods belonging to the undertaking for the sole purpose of storing, displaying or delivering them;

(c) the maintenance of a deposit of goods or goods belonging to the undertaking for the sole purpose of processing by another undertaking;

(d) the maintenance of a fixed place of business for the sole purpose of purchasing goods or goods or collecting information for the undertaking;

(e) the maintenance of a fixed place of business for the sole purpose of advertising, providing information, conducting scientific research, or any other similar activity of an auxiliary or preparatory nature for the undertaking;

(f) the maintenance of a fixed place of business for the sole purpose of the combined exercise of the activities referred to in subparagraphs (a) to (e), provided that the whole activity of the fixed place of business retains its auxiliary or preparatory character.

5. Notwithstanding paragraphs 1, 2 and 4, where a person, other than an agent enjoying an independent status, referred to in paragraph 7, is acting in a Contracting State on behalf of an express from the other Contracting State, that undertaking is considered to have a permanent establishment in the State referred to first, if that person:

(a) holds and exercises habitually in the State referred to above powers enabling it to conclude contracts on behalf of the undertaking, unless such activities are limited to the purchase of goods or goods for the undertaking;

(b) does not possess such powers, but habitually maintains in the State referred to above a deposit of goods or goods belonging to the undertaking from which it regularly executes orders or makes deliveries on behalf of the undertaking; or

(c) it does not possess such powers, but it usually executes orders in the State mentioned above either wholly or almost entirely for the undertaking or for the undertaking and other undertakings controlled by it.

6. Notwithstanding the above provisions of this article, an insurance undertaking of a Contracting State, except for reinsurance operations, shall be considered to have a permanent establishment in the other State if it collects premiums in the territory of that State or if it secures risks situated therein through a person other than an independent representative to whom paragraph 7 of this article applies.

7. An enterprise of a Contracting State is not considered to have a permanent establishment in a Contracting State merely because it carries out its activities through a broker, a general commissioner or any other agent enjoying an independent status, provided that such persons act within the ordinary framework of their activity.

8. The fact that a company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State, or that it carries out activities in that other State (whether by permanent establishment or otherwise), does not in itself make any of these companies permanent establishment of the other State.

1. Income from immovable property (including income from agricultural or forestry holdings) situated in the other Contracting State may be taxed in the other Contracting State.

2. The term ‘real property’ shall have the meaning attributed to it by the law of the Contracting State in which the property in question is situated. In any event, that term includes accessories, livestock and equipment used on agricultural and forestry holdings, rights to which the provisions of private law relating to real estate, the use of immovable property and rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources apply; ships and aircraft are not regarded as immovable property.

3. The provisions of paragraph 1 apply to income derived from direct use, lease or shareholding, as well as from any other form of exploitation of immovable property.

4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an enterprise and from immovable property used for independent work.

1. The profits of an enterprise in one Contracting State may be taxed only in that State unless the enterprise carries out its business in the other Contracting State through a permanent establishment situated in that State. If the undertaking does so, the profits of the undertaking may be taxed in the other State, but only to the extent that they can be attributed:

(a) this permanent establishment;

(b) sales in that other State of goods or goods of the same or similar nature as those sold through the permanent establishment; or

(c) other commercial activities of an identical or similar nature to those carried out through the said permanent establishment.

2. Without prejudice to paragraph 3, where an undertaking of one Contracting State carries out its activity in the other Contracting State through a permanent establishment situated therein, in each Contracting State the profits it could have derived from being a separate and separate undertaking carrying out the same or similar activities under the same or similar conditions shall be attributed to that establishment and shall deal with the enterprise of which it is a permanent establishment with such independence.

3. In order to determine the benefit of the permanent establishment, the deduction of expenses shown to have been incurred for the purposes of the transactions of the permanent establishment, including management and general administrative expenses, shall be permitted, whether incurred in the State in which the permanent establishment is located or elsewhere. However, payments made, where appropriate, by the permanent establishment (not due to reimbursement of actual expenses), to the central house or to one of its other branches, by way of royalties, fees or similar payments, in exchange for the right to use patents or other rights, by way of commission, for specific services rendered or by arrangements made or, except in the case of a bank, by way of interest on money lent to the permanent establishment, shall not be deductible. In order to determine the profits of a permanent establishment, account shall also not be taken of the amounts received by that permanent establishment (not due to reimbursement of actual expenses), the head office of the undertaking or one of its other branches, by way of royalties, fees or similar payments in exchange for the right to use patents or other rights, or by way of commission for specific services rendered or by arrangements made or, except in the case of a banking undertaking, by way of interest on the money lent to the head office of the undertaking or to one of its other branches.

4. As long as it is customary in a Contracting State to determine profits attributable to permanent establishments on the basis of a sharing of the total profits of the enterprise among its various parties, the provisions of paragraph 2 shall not preclude that Contracting State from determining taxable profits in this manner.

5. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the undertaking.

6. Where profits include income covered separately by other articles of this Convention, the provisions of those articles shall not be affected by those of this Article.

1. Profits earned by an enterprise in a Contracting State from the operation of aircraft in international traffic may only be taxed in that Contracting State.

2. Income obtained by an undertaking of one Contracting State from the operation of ships in international traffic may be taxed in the other Contracting State, but the tax required in that other State shall be reduced by 50 per 100.

3. The provisions of paragraphs 1 and 2 also apply to profits arising from participation in a pool, on a joint holding or in an international operating body.

When:

(a) an undertaking of a Contracting State participates directly or indirectly in the direction, control or capital of an undertaking of the other Contracting State; or

(b) the same persons participate directly or indirectly in the direction, control or capital of an undertaking of one Contracting State and of an undertaking of the other Contracting State,

and in either case the two companies are, in their commercial or financial relations, bound by accepted or imposed conditions which differ from those which would be agreed by independent undertakings, the profits which would have been obtained by one of the undertakings in the absence of these conditions, and which in fact did not occur because of them, may be included in the profits of that undertaking and subject to taxation accordingly.

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

2. However, such dividends may also be taxed in the Contracting State in which the company paying the dividends resides and in accordance with the law of that State, but if the recipient of the dividends is the beneficial owner, the tax thus required may not exceed 10 per cent of the gross amount of the dividends.

The competent authorities of the Contracting States shall, by mutual agreement, determine how these limits are to be applied.

This paragraph does not affect the company's taxation of profits from which dividends are paid.

3. The term ‘dividends’, used in this Article, means the income from shares, parts of mines, parts of founders or other rights, except credit rights, which permit participation in profits, as well as income from other social participations subject to the same tax regime as the income from shares under the law of the State in which the company distributing them resides.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident of one Contracting State, exercises in the other Contracting State of which the company that pays the dividends is resident, an industrial or commercial activity through a permanent establishment located here, or provides independent work through a fixed base located here, with which the share generated by the dividends is effectively linked. In such cases, the provisions of article 7 or article 14 apply as appropriate.

5. Where a company resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not require any tax on dividends paid by the company, except to the extent that these dividends are paid to a resident of that other State or the share generated by the dividends is effectively linked to a permanent establishment or a fixed base situated in that other State, or subject the undistributed profits of the company to a tax on them, even if the dividends paid or the undistributed profits consist, in whole or in part, of profits or income from that other State. This paragraph shall not prevent a Contracting State, where provided for in its law, from imposing the benefits of the permanent establishment situated in that State which are transferred, but such tax may not exceed the percentage provided for in paragraph 2 of this article.

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

2. However, these interests may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that State, but if the recipient of the resident interest of the other Contracting State is the beneficial owner, the tax thus required may not exceed:

(a) 10 per cent of the gross amount of interest, if collected by a financial institution (including insurance companies);

(b) 15 per 100 of the gross amount of interest, in other cases.

The competent authorities of the Contracting States shall, by mutual agreement, determine how this limit is to be applied.

3. Notwithstanding the provisions of paragraph 2, interest from one Contracting State and paid to a resident of the other Contracting State may not be taxed in the State mentioned above in the first instance when it comes from a loan granted by:

(a) in the case of Thailand, the Government of Thailand, including:

(i) The Bank of Thailand;

(ii) The Export and Import Bank of Thailand (export-import Bank of Thailand);

Local authorities; and

(iv) those institutions, whose capital is fully held by the Government of Thailand or any local entity, determined by agreement of the competent authorities of the Contracting States;

(b) for Spain, it means:

(i) the Banco de España;

(ii) any financial institution determined by common agreement of the competent authorities of the two Contracting States.

4. The term ‘interest’, used in this Article, means the income from claims of any kind, with or without mortgage guarantees or participation clauses in debtor’s profits, and in particular income from public funds and bonds or bonds, including premiums and lots attached to such securities.

5. The provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the interest, resident of one Contracting State, exercises in the other Contracting State, from which the interest is derived, an industrial or commercial activity through a permanent establishment located in that other State or provides professional services through a fixed base situated therein, and the credit generated by the interest is effectively linked to: (a) such permanent establishment or fixed base of business; or (b) the activities referred to in article 7, paragraph 1 (c). In such cases, the provisions of article 7 or article 14 apply, as appropriate.

6. Interests are considered to come from a Contracting State when the debtor is the State itself, a Local Entity or a resident of that State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the debt giving rise to the payment of the interest and bearing the burden thereof has been incurred, the interest shall be considered as originating in the Contracting State where the permanent establishment or fixed base is located.

7. Where, on account of the special relations between the debtor and the beneficial owner of the interest or the interest between them and third parties, the amount of interest paid, taking into account the claim for which it is paid, exceeds that agreed upon by the debtor and the creditor in the absence of such relations, the provisions of this article apply only to the latter amount. In this case, the excess may be subject to taxation, in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. Fees from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such fees may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that State, but if the beneficial owner is a resident of the other Contracting State, the tax thus required may not exceed:

(a) 5 per cent of the gross amount of royalties for the use or granting of a copyright on a literary, theatrical, musical, artistic or scientific work, excluding cinematographic films and video or audio tapes used for radio and television;

(b) 8 per 100 of the gross amount of fees levied on account of financial leasing relating to the use or concession of industrial, commercial or scientific equipment; and

(c) 15 per 100 of the gross amount of royalties, in other cases.

3. The term ‘royalties’ used in this Article means quantities of any kind paid for the use or grant of a copyright on a literary, artistic or scientific work, including cinematographic films, or video or audio tapes used on radio or television, a patent, trademark or trade mark, design, plan, formula or secret procedure, as well as for the use or granting of use of industrial, commercial or scientific equipment, including quantities received by financial leasing and information relating to industrial, commercial or scientific know-how. The term ‘royalties’ also includes gains arising from the disposal of such goods or rights, to the extent that the gains are determined on the basis of productivity, use or transmission thereof.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the royalties, resident of one Contracting State, exercises in the other Contracting State from which the royalties come an industrial or commercial activity through a permanent establishment located in that other State or provides professional services through a fixed base situated therein, and the right or ownership for which the royalties are paid is effectively linked to: (a) such permanent establishment or fixed base of business; or (b) the activities referred to in article 7, paragraph 1 (c). In such cases, the provisions of article 7 or article 14 apply, as appropriate.

5. The royalties are considered to come from a Contracting State when the debtor is the State itself, a Local Entity or a resident of that State. However, where 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 basis in respect of which the effect is given to the payment of the royalties and bears the burden thereof, they shall be regarded as originating in the Contracting State where the permanent establishment or fixed base is situated.

6. Where, on account of the special relations between the debtor and the beneficial owner of the royalties or of those which both maintain with third parties, the amount of the royalties paid, taking into account the benefit for which they are paid, exceeds that for which the debtor and the beneficial owner would have agreed in the absence of such relationships, the provisions of this article apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. Profits that a resident of one Contracting State obtains from the disposal of immovable property, as defined in article 6, located in the other Contracting State, may be taxed in that other State.

2. Profits that a resident of a Contracting State obtains from the disposal of shares or shares in the capital of a company whose assets are wholly or mainly constituted of immovable property, as defined in article 6, located in the other Contracting State, may be taxed in that other State.

3. Gains arising from the disposal of movable property forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or from movable property belonging to a fixed basis held by a resident of one Contracting State in the other Contracting State for the provision of independent work, including gains arising from the disposal of that permanent establishment (only or with the enterprise as a whole) or from that fixed basis, may be subject to taxation in that other State.

4. Profits obtained by a company resident in a Contracting State from the alienation of ships or aircraft operated in international traffic or from movable property affected by the operation of such ships or aircraft may only be taxed in that State.

5. Profits arising from the disposal of any property other than those referred to in paragraphs 1, 2 and 3 of this article and in article 12, paragraph 3, may be taxed only in the Contracting State in which the transferor resides.

1. Incomes which a resident of a Contracting State obtains from the provision of professional services or other activities of an independent nature may only be taxed in that State, except in the following circumstances where such income may also be taxed in the other State, if that resident has a fixed basis in that other State for the purpose of carrying out his activities for more than one hundred and eighty-three consecutive or alternative days in any twelve-month period; in this case, only income attributable to that fixed base may be taxed.

2. The term “professional services” includes, in particular, independent scientific, literary, artistic, educational or pedagogical activities, as well as independent activities of Physicians, Dentistry, Lawyers, Engineers, Architects and Accountants.

1. Without prejudice to articles 16, 18 and 19, similar salaries, salaries and salaries obtained by a resident of a Contracting State on account of employment may be subject to taxation only in that State, unless the employment is exercised in the other Contracting State. If the employment is thus exercised, the remuneration received for this purpose may be subject to taxation in this other State.

2. Notwithstanding paragraph 1 of this article, remuneration obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may be subject to taxation in the former State only if:

(a) the recipient does not remain in total in the other State, for one or more periods, more than one hundred and eighty-three days for any period of twelve months; and

(b) remuneration is paid for or on behalf of an employer who is not a resident of the other State; and

(c) Remuneration is not borne by a permanent establishment or a fixed basis which the employer has in the other State.

3. Notwithstanding the preceding provisions of this article, remunerations earned on account of employment on board a ship or aircraft operated in international traffic by an undertaking of a Contracting State may be subject to taxation only in that State.

Participations, attendance allowances and other similar remunerations which a resident of a Contracting State obtains as a member of a Board of Directors or supervisory body of a company resident of the other Contracting State may be subject to taxation in that other State.

1. Notwithstanding the provisions of articles 14 and 15, the rents which a resident of a Contracting State obtains from the exercise of his personal activity in the other Contracting State, as performing artists, theatre, radio and television actors, or as a musician, or as an athlete, may be subject to taxation in that other State.

2. Notwithstanding Articles 7, 14 and 15, where the income derived from the activities of an artist or athlete personally and as such is attributed, not to the artist or athlete himself, but to another person, such income may be taxed in the Contracting State in which the activities of the artist or athlete are carried out.

3. The provisions of paragraphs 1 and 2 shall not apply to remuneration or benefits, salaries, salaries and other similar income derived from activities carried out in one Contracting State by an artist or sportsman if such activities in that State are substantially financed by public funds, local entities or legal entities governed by public law of the other Contracting State.

4. Notwithstanding the provisions of article 7, where the activities referred to in paragraph 1 of this article are carried out in one Contracting State by an undertaking of the other Contracting State, the profits derived from the conduct of such activities by that undertaking may be taxed in the State referred to first, unless the undertaking is financed, in respect of the activities referred to above, substantially by public funds, local entities or legal entities governed by public law of the other Contracting State.

Without prejudice to article 19, paragraph 2, pensions and other similar remuneration paid to a resident of a Contracting State on account of previous employment may only be taxed in that State.

1. (a) Remuneration, excluding pensions, paid by a Contracting State or one of its Local Entities to a natural person for services rendered to that State or entity, may only be subject to taxation in that State.

(b) However, these may be subject to taxation in the other Contracting State only if the services are provided in this State and the natural person is a resident in this State who:

(i) possesses the nationality of this State; or

(ii) has not acquired resident status only to provide the services.

2. (a) Pensions paid by a Contracting State or by one of its Local Entities, either directly or from funds constituted, to a natural person on account of services rendered to that State or to that entity, may only be subject to taxation in this State.

(b) However, such pensions may be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State.

3. Articles 15, 16 and 18 apply to remuneration and pensions paid for services rendered within the framework of an industrial or commercial activity carried out by a Contracting State or one of its Local Entities.

A student or a trainees who has been, immediately before arriving in a Contracting State, resident of the other Contracting State and who is in the former State for the sole purpose of continuing his studies or practical training shall be exempt from taxation in the State referred to first by reason of:

(i) The amounts received from abroad for maintenance, education, studies, research or practical training;

(ii) scholarships, grants or awards from a public body of a scientific, literary or educational nature; and

(iii) the income derived from personal services provided in that Contracting State, provided that such income constitutes income reasonably necessary to support it and that studies and practical training are not secondary in relation to the services provided.

1. A natural person who is a resident of a Contracting State immediately before he begins his stay in the other Contracting State and who, at the invitation of an officially recognized university, institute, college or other educational institution in that other Contracting State, remains in that other State, for a period not exceeding two years, for the sole purpose of teaching or engaging in research, or for both activities, in that educational institution, shall be exempt from taxation in that other State for any remuneration derived from such educational or research activity.

2. This Article shall only apply to research income, if such research is carried out in the public interest and not primarily for the private benefit of a particular person or persons.

1. The income of a resident of a Contracting State, not mentioned in the previous articles of this Convention, may only be taxed in that State.

2. Paragraph 1 does not apply to income, excluding that derived from property defined as immovable in article 6, paragraph 2, where the beneficiary of such income, resident of a Contracting State, engages in an industrial or commercial activity in the other Contracting State through a permanent establishment located therein or provides professional services through a fixed base equally situated therein, to which the right or ownership for which the income is paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

3. Notwithstanding the provisions of paragraphs 1 and 2, the income of a resident of a Contracting State not mentioned in the preceding articles and originating in the other Contracting State may be taxed in that other State.

1. The laws in force of each Contracting State shall continue to govern the taxation of the income of the respective Contracting States unless expressly provided otherwise in this Convention. Where an income is subject to taxation in both Contracting States, double taxation shall be eliminated in accordance with the following paragraphs of this article.

2. In Spain, double taxation shall be avoided as follows:

(a) Where a resident of Spain obtains income which, in accordance with the provisions of this Agreement, may be taxed in Thailand, Spain shall deduct from the income tax of that resident an amount equal to the tax paid in Thailand. However, this deduction may not exceed the part of the Spanish tax corresponding to the income that may be taxed in Thailand, calculated before the deduction.

(b) Where, in accordance with any provision of the Convention, income obtained by a resident of Spain is exempt from taxes in Spain, Spain may, however, take into account exempt income for the purpose of calculating the amount of tax on the remaining income of that resident.

3. In the case of Thailand, where a resident of Thailand obtains income which, in accordance with the provisions of this Agreement, may be taxed in Spain, Thailand shall deduct from the income tax of this resident an amount equal to the tax paid in Spain. However, this deduction may not exceed the part of the Thai tax, corresponding to the income that may be taxed in Spain, calculated prior to the deduction.

4. For the purposes of paragraph 2(a), the term ‘tax on income paid in Thailand’ refers to the amount of Thai tax that would have been paid, in accordance with the provisions of this Convention, even if it is not fully or partially paid due to a tax exemption or reduction to promote industrial, commercial, scientific, educational or other development contained in the following rules:

(a) Articles 31 and 35.3 (but only where the exemption or reduction granted by these provisions would not have been possible in the absence of such provisions) and 33, 34, 35.2 and 35.4 of the Investment Promotion Act B. E. 2520’ as long as they are in force and have not been amended since the signing of this Convention, unless only minor aspects which do not affect their general character have been amended; or

(b) Any other provision that may be enacted by granting a tax exemption or reduction that is agreed upon by the competent authorities of the Contracting States on the basis of a similar nature, if it has not been subsequently amended or changed only in minor respects that do not affect its general character.

The provisions of this paragraph shall apply for a period of 10 years from the first January of the first tax year following the entry into force of this Convention. This period may be extended by mutual agreement of the competent authorities.

1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxes or obligations relating thereto which are not or are more burdensome than those to which nationals of that other State who are in the same conditions are or may be subject.

2. Permanent establishments held by an enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of that other State carrying out the same activities.

3. Unless the provisions of article 9, article 11, paragraph 7, or article 12, paragraph 6, apply, interest, royalties or other expenses paid by an enterprise of one Contracting State to a resident of the other Contracting State are deductible, in order to determine the profits subject to taxation of that enterprise, under the same conditions as if they had been paid to a resident of the former State.

4. Undertakings of a Contracting State whose capital is, in whole or in part, directly or indirectly detained or controlled by one or more residents of the other Contracting State are not subject in the first State to any tax or obligation relating thereto which is not or is more burdensome than those to which other similar undertakings of the first Contracting State are or may be subject.

5. The provisions of this article cannot be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, reliefs and tax reductions it grants to its own residents in view of their marital status or family burdens.

6. In this Article the term ‘tax’ means all taxes, whatever their nature and name.

1. Where a resident of a Contracting State considers that the measures taken by one or both Contracting States entail or may entail for him an imposition that is not in conformity with this Convention, irrespective of the remedies provided for by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which he is a resident. The case shall be brought within three years of the first notification of the measure involving an imposition not in accordance with the provisions of the Convention.

2. The competent authority shall, if it finds the complaint well founded and if it is not in a position to adopt a satisfactory solution, make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid an imposition not in conformity with this Convention.

3. The competent authorities of the Contracting States shall endeavour to resolve difficulties or to dispel any doubts arising from the interpretation or application of the Convention through an amicable agreement. They may also agree to try to avoid double taxation in cases not covered by the Convention.

4. The competent authorities of the Contracting States may communicate directly with each other in order to reach an agreement as set out in the preceding paragraphs.

1. The competent authorities of the Contracting States shall exchange the information necessary to apply the provisions of this Convention or of the national law of the Contracting States relating to taxes covered by the Convention, to the extent that the taxation required by that Convention 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 be communicated only to persons or authorities (including courts and administrative bodies) responsible for the management or collection of taxes covered by the Convention, declaratory or executive procedures relating to such taxes or for the resolution of appeals relating to such taxes. These persons or authorities will only use these reports for these purposes. They may disclose such information in public hearings of the Tribunals or in court judgements.

2. In no case can the provisions of paragraph 1 be interpreted as obliging a Contracting State to:

(a) To take administrative measures contrary to its legislation or administrative practice or those of the other Contracting State;

(b) Provide information that cannot be obtained on the basis of its own legislation or in the exercise of its normal administrative practice or that of the other Contracting State;

(c) Provide information revealing a commercial, industrial or professional secret, or a commercial procedure or information whose communication is contrary to public policy.

The provisions of this Convention do not affect the tax privileges enjoyed by diplomatic agents or consular officials, in accordance with the general principles of international law or under special agreements.

1. This Convention will be ratified and the instruments of ratification will be exchanged as soon as possible.

2. The Convention shall enter into force on the basis of the exchange of instruments of ratification, and its provisions shall apply:

(a) In respect of taxes on withholding taxes, amounts paid or accrued after 1 January immediately following the date on which the instruments of ratification are exchanged;

(b) For other income, from the tax period or accounting year beginning after 1 January immediately following the date on which the instruments of ratification are exchanged.

This Convention shall remain in force indefinitely, but any Contracting State may notify in writing the denunciation of the Convention to the other Contracting State, through diplomatic channels, until 30 June of any calendar year commencing after the expiry of the five-year period from the date of its entry into force.

In that case, the Convention shall cease to have effect:

(a) In relation to taxes withheld at source, in respect of amounts paid or referred from 1 January following the date of notification of the complaint;

(b) In relation to other forms of income taxation, in respect of social years or periods starting from 1 January following the date of notification of the complaint.

In faith, the signatories, duly authorized to do so, have signed this Convention.

Done in duplicate in Madrid on 14 October 1997, in the English, Thai and Spanish languages, all texts being equally authentic, except in case of doubt that the English text will prevail.

At the time of signing the Convention between the Kingdom of Spain and the Kingdom of Thailand to Prevent Double Taxation and Tax Fraud on Income, the undersigned have agreed on the following provisions which form part of the Convention:

1. In relation to Article 3.1(d), in the case of Thailand, the term ‘person’ also includes undivided assets.

2. (1) In relation to article 5, paragraph 4, if a person who is a resident of a Contracting State makes available to other persons in one of the Contracting States, a warehouse or any facility where he or she stores goods or goods, he or she shall be considered to be engaged in an activity in that Contracting State through a permanent establishment.

(2) In relation to article 5, paragraph 4 (a) and (b), the use of delivery facilities is understood to constitute a permanent establishment if used as a sales centre.

3. With regard to article 5, paragraph 7, of the Convention, it is understood that the term ‘a broker, a general commissioner or any other agent enjoying an independent status’ does not include that person who engages, alone or in a case only, in one of the Contracting States, in activities described in paragraph 5 (a), (b) and (c) of that article for or on behalf of an undertaking of the other Contracting State or for or on behalf of that undertaking and other undertakings which are controlled by or exercise control over that undertaking.

4. With regard to Article 7.1(b) and (c), it is understood that:

(1) In case of doubt, the competent authorities of the Contracting States shall consult with a view to reaching a satisfactory solution in relation to the similarity of the goods or goods to the activities referred to in points (b) and (c) above;

(2) Losses arising from sales or activities referred to in points (b) and (c) shall also be taken into account in determining the profits of the permanent establishment.

5. With regard to article 8, paragraph 2, it is understood that if there is a reduction or exemption in the taxation required by one of the Contracting States on the income obtained by an undertaking of any other country from the operation of ships in international traffic, the competent authorities of the Contracting States shall, by mutual agreement, agree on a reduction or equivalent exemption.

6. With regard to paragraph 5 of article 10, if, following the signature of the Convention, any Contracting State concludes a Convention to Prevent Double Taxation with another country, in which the transfer of profits tax referred to in that paragraph does not apply, the competent authorities of the Contracting States shall, by mutual agreement, agree on the exemption from such taxation.

7. In relation to Article 12(2), the fees levied on the basis of financial leasing mean the amounts received in consideration of the use or right of use of industrial, commercial or scientific equipment when the lessee has, at the time of conclusion of the contract, the option to purchase the equipment, renew the leasing or terminate the contract.

In faith, the signatories, duly authorized to do so, have signed this Protocol.

Done in duplicate at Madrid on 14 October 1997, in the English, Thai and Spanish languages.

This Convention, as provided for in Article 28(2) and the Protocol thereto, entered into force on 16 September 1998, the date of the exchange of instruments of ratification.

What is made public for general knowledge. Madrid, September 28, 1998. –The Technical Secretary General of the Ministry of Foreign Affairs, Julio Núñez Montesinos.