Double Taxation Agreement between Thailand and Usa

The United States and Thailand have a tax treaty in place. The main purpose of tax treatment is to ensure proper tax treatment of funds earned by U.S. citizens, Thai citizens, expats, and residents of the other country. When a tax treaty is in force, it usually provides for a reduction in taxes on passive income, the elimination of certain taxes such as the foreign savings income of residents of the other country, and the avoidance of double taxation. Scholarships, allowances or scholarships for students and trainees resident in other Contracting States may be taxed only in the State in which they are granted and are exempt from tax in the other Contracting State. (42) This exception applies to students who study at recognized universities or educational institutions or who are trained to qualify the person for a profession, or to a person who studies or conducts research as a recipient of a grant, stipend or special award. The exemption includes compensation for income earned in the other State Party, provided that the income does not exceed $3,000 (or the equivalent in Thai baht) for a tax year. (43) This exception has a duration of 5 years. (44) Thailand and the USA have not concluded a social security agreement between them. This means that some U.S. expats will have to contribute to both social security systems for some Thai income. Double taxation treaties have a dual legal character. The treaty is both an international agreement on behalf of two nations and is part of the national tax legislation of each Contracting State.

(7) As an international treaty, the interpretation of the treaty is governed by international law, in particular the 1969 Vienna Convention on the Law of Treaties. (8) In the United States, the rules of interpretation applied in the interpretation of treaties are essentially the same as those applied by the court in interpreting the law. (9) Article 25 provides for the exemption from double taxation as follows: The United States grants to a resident or citizen of the United States a tax credit for income tax paid to Thailand by United States individuals or corporations. (49) The Government of Thailand will also grant a credit for the US income tax due imposed by the two Contracting States. (50) Both Articles 9 and 25 are intended to mitigate international double taxation resulting from the actions of one or both Contracting States. Article 9 allows a State Party to increase the tax imposed by one of its companies on that company dealing with an affiliate of the other Contracting State, thereby providing an incentive for the other Contracting State to make a normal downward adjustment to its established tax. For example, Article 9 has the dual objective of reducing double taxation and properly distributing fiscal sovereignty among States. *Whether or not a country has entered into a FATCA agreement does not affect whether you, as an individual or company, are required to report your accounts abroad. * Attorney, State of Hawaii, United States Federal District of the State of Hawaii; Doctor of Laws, University of Houston, USA (1986); Foreign expert, Sukhothai Thammathirat Open University (1) Convention between the Government of the United States of America and the Government of the Kingdom of Thailand on the Prevention of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income of 26 November 1996 (hereinafter referred to as the Agreement). (2) Convention, art. 30. , 3) “Tax Treaty Promises `a New Era of Trade`”.

Bangkok Post, 27 November 1996. 4) “Clinton Expected to Sign Tax Treaty”, Bangkok Post, 18 September 1996. (5) M. Dominic, Income Taxation and Foreign Investment in Developing Countries (Amsterdam, 1980) and C. Irish, International Double Taxation Agreements and Income Taxation at Source (1973) 23 I.C.L.Q. 292.6) Philip Baker. Double taxation and international tax law. London: Sweet and Maxwell, 1991, pp.

280-7) Ibid., pp. 5-6. (8) The Vienna Convention entered into force on 17 January 1980. See Sir Ian Sinclair at the International Fiscal Association; Interpretation of tax treaties (1986) Bull I.B.F.D. .