Terms of the exemption from withholding tax As a general rule, the payment must be made to a taxable unit in the recipient country in order for the payments to benefit from the exemption from withholding tax. 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. Section 23 provides that a person who visits a State Party for up to two years to teach or conduct research at a recognized educational institution is tax-exempt in the state where he or she attends. (46) – Lawyer, State of Hawaii, U.S.A. Federal District for the State of Hawaii; Doctor of Jurisprudenz, University of Houston, U.S.A. (1986); Foreign Expert, Sukhothai Thammathirat Open University 1) Agreement between the Government of the United States of America and the Government of the Kingdom of Thailand for the avoidance of double and the prevention of tax evasion with respect for income taxes of November 26, 1996 (hereafter referred to as the agreement). 2) Convention, art. 30.
3) “The tax treaty promises `new era of trade`.” Bangkok Post, November 27, 1996. 4) “Clinton Expected to Sign Tax Treaty,” Bangkok Post, September 18, 1996. 5) Mr. Dominic, Income Taxation and Foreign Investment in Developing Countries (Amsterdam, 1980) and C. Irish, International Double Taxation Agreements and Income at Taxation Source (1973) 23 I.C.L.Q. 292. 6) Philip Baker. Double taxation and international tax law. London: Sweet and Maxwell, 1991, at 280 7) Ibid., 5-6. 8) The Vienna Convention came into force on 17 January 1980.
See Sir Ian Sinclair, International Fiscal Association; Interpretation of the Taxi Treaty (1986) Bull I.B.F.D. 75. 9) David Brockway, Interpretation of Tax Treaties and their Relationship to Statutory Law-A.A.S. Perspective, 35 Tax Conference of the Canadian Tax Foundation 619 (1983) at 627.C. 10) In reviewing the purpose of double taxation conventions, the U.S. Supreme Court stated: “… the general objective of the treaty was not to ensure a complete and rigorous quality of treatment – a task that was virtually impossible given the different tax structures of the two nations – but, as the convention`s preamble itself provides, to facilitate trade by removing the double taxation resulting from the collection of double taxation of the two countries, which had the same operation or benefit; Another goal was to prevent tax evasion. Maximov vs. usa