Thailand first introduced a double taxation convention in 1963 (with Sweden) and has since significantly increased the list. Currently, 55 countries have a double taxation agreement with Thailand: double taxation agreements have a dual legal character. The treaty is both an international agreement on behalf of two nations, and is also part of the national tax law of each contracting state. (7) As an international treaty, the interpretation of the treaty is governed by international law and, in particular, by the 1969 Vienna Convention on Treaty Law. (9) Tax treaties are designed to avoid double taxation and prevent tax evasion. As a general rule, they offer a means of granting a double payment of taxes on the same income to a person who has income that would normally be taxed in more than one country, or a tax credit for the tax paid in one country against the tax debt of a taxpayer in another country. In addition to providing benefits to taxpayers, double taxation agreements also provide for cooperation between governments in the prevention of tax evasion. On November 26, 1996, William H. Itoh, Ambassador of the United States of America, and Amnuay Virawan, Deputy Prime Minister and Minister of Foreign Affairs of the Kingdom of Thailand, signed an agreement to avoid double taxation and prevent income tax evasion. 1. The agreement between the United States and Thailand (the so-called “agreement”) will enter into force with ratification by the legislative bodies of each nation. (2) The treaty can enter into force as early as 1998, provided that the U.S. Senate must ratify itself.
(3) In the United States and Thailand, an income tax agreement is in effect. The main purpose of tax treatment is to ensure proper tax treatment of funds earned by U.S. citizens, Thai citizens, ex-pats and residents of the other country. Where a tax treaty is in effect, it generally provides for a reduction in taxes on passive income, the elimination of certain taxes, such as foreign interest income, which are generated by residents of the other country and the prevention of double taxation. Double taxation occurs when the same reported income is taxed by two or more different legal regimes. This can occur when an individual or business is established or operates in more than one country and is mitigated by double taxation agreements between countries. As a result, income is taxed only once. Scholarships, allowances or allowances for students and interns residing in other contracting states are taxable only in the state where they are created and are exempt in the other State party.
(42) This exception applies to students who are studying or receiving training at universities or educational institutions recognized to be able to practise a profession or to any person who has studied or researched as a recipient of a special scholarship, allowance or distinction.