The first-time income tax treaty and protocol between Thailand and Turkey, signed on 11 April 2002, entered into force on 13 January 2005. The treaty will generally apply from 1 January 2006. — Orbitax Tax News & Alerts
The maximum rates of withholding tax are:
| - |
15% on dividends in general and 10% if the beneficial owner is a company (excluding a partnership) holding directly at least 25% of the capital of the company paying the dividends; |
|
| - | 15% on interest in general and 10% on interest received by any financial institution including an insurance company; and | |
| - | 15% on royalties. |
Thailand provides for the credit method to avoid double taxation. Turkey generally provides for the exemption-with-progression method to avoid double taxation, except in respect of dividends, interest, royalties and certain capital gains, where the credit method applies. The treaty includes a tax sparing provision operating in Turkey for 3 years from the applicable date for the treaty, under which taxes paid in Thailand include tax which would otherwise have been payable but for special incentive measures designed to promote economic development.