Double Taxation Agreement Thailand Myanmar

Double Taxation Agreement between Thailand and Myanmar: An Overview

If you`re planning to do business in Thailand and Myanmar, understanding the double taxation agreement (DTA) between these two countries can be crucial. In simple terms, a DTA is an agreement between two countries that aims to prevent businesses or individuals from paying taxes twice on the same income. In this article, we`ll delve into the DTA between Thailand and Myanmar and its implications for businesses.

Overview of the Agreement

Thailand and Myanmar signed their DTA on September 7, 2016. The agreement is intended to promote economic cooperation and investment between the two countries. The DTA outlines the tax treatment of income earned by residents of one country in the other country. The DTA covers taxes on income, including personal income tax, corporation tax, and withholding tax.

Taxation on Business Income

Under the DTA, business income is taxed in the country where the business is located. For example, if you`re a Thai business operating in Myanmar, you`ll be subject to Myanmar`s corporate tax laws. On the other hand, if you`re a Myanmar business operating in Thailand, you`ll be subject to Thailand`s corporate tax laws. This helps avoid double taxation on the same income.

Taxation on Dividends, Interest, and Royalties

The DTA also covers income from dividends, interest, and royalties. Dividends and interest derived from one country and paid to a resident of the other country are subject to a maximum tax rate of 10 percent. Royalties paid to residents of one country by residents of the other country are subject to a maximum tax rate of 15 percent.

Taxation on Capital Gains

The DTA also covers capital gains. However, the taxation of capital gains is left to the domestic tax laws of each country. Generally, if you`re a resident of one country and you sell an asset located in the other country, you`ll be subject to tax in both countries. However, the DTA allows for a tax credit in the country where you reside to avoid double taxation.

Avoidance of Double Taxation

The DTA also includes provisions to avoid double taxation. For example, if you`re a resident of one country and you pay tax on income derived from the other country, you`ll be entitled to a tax credit in your country of residence. This helps ensure that you`re not taxed twice on the same income.

Conclusion

The DTA between Thailand and Myanmar is crucial for businesses operating in both countries. It helps prevent double taxation and promotes economic cooperation and investment. As a business owner, it`s important to understand the tax implications of operating in these countries and to seek professional advice to ensure compliance.