Double Taxation Agreement Thailand Japan
April 8, 2021 | Leave a comment
Stable Establishment The concept of a stable establishment is of the utmost importance with respect to taxation under tax treaties. As a general rule, a business that receives income from a country is tax-exempt in that country, unless it has a stable establishment there. Athletes and artists who are supported by a public body These individuals are generally exempt from taxation in the country where they perform if their income comes from a public institution in their home country. In other cases, the rules for athletes and artists are the opposite of the rule applicable to other temporary workers. Athletes and artists are taxed in the country where they work, even temporarily, regardless of where they are paid, provided they are paid by private sources. For example, payments to a business in the UNITED Kingdom that is not domiciled or taxable in the United Kingdom are not eligible. Similarly, payments made to the bank account of a Hong Kong company are not eligible for the benefits of the Thai tax treaty in Singapore simply because the money is sent to Singapore because that factor alone would not be taxed on the Hong Kong company in Singapore. Inheritance Tax As mentioned in Chapter 15 Other taxes, Thailand came into force for the first time on February 1, 2016, inheritance tax. Thailand`s double taxation agreements do not deal with or mention inheritance tax. Therefore, the question arises as to whether inheritance tax is paid under Thai tax law and whether the deceased`s estate is charged in another country subject to inheritance and estate tax, or vice versa, whether the payment of inheritance tax in the first country is charged on the IHT bill in the second country.
Examples of benefits under certain tax treaties The following examples relate to benefits available under different tax treaties when income is generated in a country but is exempt from all or part of the tax in the country where it is produced. Tax treaties aim 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. Tax credits, although no tax payments from Singapore and some other countries, but not the United States, also allow a credit on their taxes for taxes that should and should have been paid to Thailand, but which are exempt from taxation in Thailand under the Investment Promotion Act. Tax Credit Tax treaties generally provide that if taxation on more than one country on the same income, then the second country generally has to pay a tax credit for taxes in the first country. Tax-exempt income from services and rents on personal property are generally tax-exempt in the country from which they are paid. However, under the tax treaty between Thailand and Japan, all rents, including rental income for personal property, are taxable. In this specific contract, there is no exception for this type of income.