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Thailand: New income tax treaty with Philippines, effective 2019

Thailand: New income tax treaty with Philippines

A new income tax treaty between Thailand and the Philippines has entered into force, and the treaty provisions will be effective 1 January 2019.


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The new Thailand-Philippines income tax treaty replaces one from 1983. Among the provisions of the new income tax treaty are the following:

  • An expanded definition of “resident” based on place of effective management and a new “tie-breaker test”
  • An expanded definition of “permanent establishment” as well as an expanded business profits rule
  • Measures concerning the operation of ships or aircrafts in international traffic
  • Changes to the withholding tax rates for dividends (generally, a 15% withholding tax rate, plus a new 10% rate on dividends if beneficial owner is a company holding directly 25% or more of the capital of the company paying the dividends)
  • Changes to the withholding tax rate for interest (generally, a 15% withholding tax rate if the recipient of the interest is the beneficial owner, and a 10% withholding tax rate on interest paid to financial institutions including insurance companies)
  • Changes to the withholding tax rate for royalties (a 15% withholding tax rate if the recipient is also the beneficial owner)
  • Revisions to the “personal services” provision, with separate articles and criteria for independent personal services and for dependent personal services
  • An updated exchange of information article, generally reflecting the OECD Model Tax Convention measures


Read a June 2018 report prepared by the KPMG member firm in Thailand

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