The Double Taxation Agreement signed between Poland and Thailand embodies a formal legal commitment towards fostering stronger economic ties by reducing double taxation barriers while encouraging cross-border investments. As some of H&P lawyers have professional experience working in the jurisdiction of Poland and advising multiple polish and Thai corporations and private individuals on international tax exposure and compliance with the Thai Revenue Code, we have prepared a summary of the Thailand and Poland DTA.
This bilateral agreement implies a proactive approach taken by both national regulators toward combating tax evasion while boosting trade relations. As we move forward with its implementation, it is expected that the DTA will contribute significantly to mutually beneficial growth for both Poland and Thailand’s economies.
Herrera and Partners lawyers in Thailand would like to provide some initial legal comments on important incomes that are subject to this treaty:
1- Immovable Property
If a resident of one contracting state receives income from real estate located in the other contracting state, that income may be subject to taxation in the country where the real estate is situated.
2-Business Profits
In the case of business profits derived by a company from one contracting state, they are only taxable in that state unless the company has a permanent establishment in the other contracting state. A permanent establishment is a fixed place of business where the company carries out its operations, such as branches, offices, factories, workshops, and mines.
If a company has a permanent establishment in both Poland and Thailand, the profits are taxed according to specific rules outlined in Article 7. These rules aim to prevent double taxation while ensuring that companies pay their fair share of taxes.
3-Shipping and Air Transport Business
If a resident of a Contracting State engages in an international aircraft business, the income generated by this business is only taxable in the country where the principal place of business is located.
4-Dividends
The dividends paid by a company resident in a Contracting State to a recipient in another may be taxed in the recipient’s Contracting State, but the tax charged should not exceed 20% of the gross amount if the recipient owns 25% of the company’s capital.
5-Interest
Interest arising in one country and paid to a resident of another country may be taxed in both countries. The country where the interest arises will have the primary right to tax it, but the tax imposed should not exceed 10 percent of the total amount of interest.
6-Royalties
Royalties derived in one country and paid to a resident of another country may be taxed in both countries.
However, the tax charged in the Contracting State may not exceed 5% of the gross amount of royalties if they are made as a consideration for the alienation or use of copyright of literary, artistic, or scientific work, excluding cinematographic films or tapes for television or broadcasting.
Royalties or payments payable to a Contracting State or a State-owned company in respect of films are exempt from tax in the other Contracting State. The provisions above do not apply if the recipient of the royalties has a permanent establishment in the other Contracting State with the right or property giving rise to the royalties.
The information of above is just a brief of relevant aspects of the DTA signed between Poland and Thailand however we strongly recommend discussing your specific case with a tax lawyer based on a review and interpretation of the DTA, Revenue Code of both countries and the applicable jurisprudence.
If you need to consult with a tax lawyer in Thailand on Double Taxation Agreements or DTAs please contact our tax experts in Bangkok at [email protected]
