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(1) Dixidends paid by a company which is a resident of a Contracting State to a resident of the other Con- tracting State may be taxed in that other State
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(2) However, such dividends may be taxed in the Contrecung State of which the company paying the dividends 1s a resident, but a) the Thai tax shall not exceed 1. 20 per cent of the gross amount of the dividends if the company paying the dividends engages in an industrial undertaking or if the recipient of the dividends is @ company which is a resident of the Federal Republic owning at least 25 per cent of the voting shares of the company paying the dividends, 2.15 per cent of the gross amount of the dividends if the company paying the dividends engages in an industrial undertaking and the recipient of the dividends is a company which is a resident of the Federal Republic owning at least 25 per cent of the voting shares of the former company: b) the German tax shall not exceed: 1, 20 per cent of the gross amount of the dividend, unless sub-paragraph 2 applies; 2. 15 per cent of the gross amount of the dividends, Hf the recipient of the dividends is a company which is a resident of Thailand owning at least 25 per cent of the voting shares of the company paying the dividends.
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(3) Notwithstanding the provisions of paragraph 2 the tax of a Contracting State on dividends paid by a company which is a resident of that State may exceed the rates provided for in that paragraph, but shall not exceed 25 per cent of the gross amount of the dividends, if @) the corporation tax of that State on distributed profits is lower than that on undistributed profits and the difference between those two rates is 20 percentage points or more, and b) such dividends are paid by a company which is a resident of that State to a company resident of the other State and which owns at least 25 per cent of the voting shares of the first-mentioned company.
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(4) In this Article a) the term "dividends“ means income from shares and income from other corporate rights assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident; b) the term “industrial undertaking" means 1. any undertaking engaged in i) manufacturing, assembling and processing, i) construction, civil engineering and ship- building, iii) production of electricity, hydraulic power, gas or the supply of water, or iv) agriculture, forestry and fishery and the carrying on of a plantation, nd 2. any other undertaking entitled to the privileges accorded under the laws of Thailand on the promo ion of industrial investment, and 3. any other undertaking which may be declared 10 be an “industrial undertaking” for the purpose of this Article by the competent authority ol Thailand
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(5) The provisions of paragraphs 1 to 3 shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected, provided that under the law of that other State the dividends are taxed as part of the profits of the permanent establishment.
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(6) Where a company which is a resident of a Con- tracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company to persons who are not resident of that other State, or subject the company's undistributed profits to a tax on undistributed profits even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State