(1) The laws in force in either of the Contracting
States will continue to govern the assessment and
taxation of income and capital in the respective Con-
tracting State except where express provision to the
contrary is made in this Agreement.
(2) Subject to the provisions of paragraph 1, tax shall
be determined in the case of a resident of the Federal
Republic as follows:
a) Unless the provisions of subparagraph b) below apply,
there shall be excluded from the basis upon which
German tax is imposed any item of income from
sources within Thailand and any item of capital
situated within Thailand which according to this
Agreement may be taxed in Thailand. The Federal
Republic, however, retains the right to take into
account in the determination of its rate of tax the
items of income and capital so excluded. The first
sentence shall in the case of dividends apply only
to such dividends as are paid to a company limited
by shares (Kapitalgesellschaft) which is a resident
of the Federal Republic by a company which is a
resident of Thailand and at least 25 per cent of the
voting shares of which are owned by the first-
mentioned company. There shall also be excluded
from the basis upon which German tax is imposed
any share-holding, the dividends on which, if paid,
would be excluded from the tax basis according to
the immediately foregoing sentence.
b) Tax payable under the laws of Thailand and in ac-
cordance with this Agreement on the following items
of income from sources within Thailand shall, subject,
to the provisions of German tax law regarding credit
for foreign tax, be allowed as a credit against such
German tax on income as is payable in respect of the
following items of income:
1. profits derived by operating ships in international
traffic which may be taxed in Thailand according to
paragraph 2 of Article 8;
2. dividends not dealt with in subparagraph a) above;
3. interest;
4, royalties and such gains as are mentioned in para-
graph 3 of Article 12;
5, profits which may be taxed in Thailand according
to paragraph 2 of Article 15;
6. remuneration mentioned in paragraph 1 of Ar-
ticle 17 paid to a German national who is not also
a Thai national;
7. pensions and other payments and annuities which
may be taxed in Thailand according to paragraph 1
of Article 18.
(3) Subject to the provisions of paragraph 1, tax shall
be determined in the case of a resident of Thailand as
follows:
a) Unless the provisions of subparagraph b) below apply.
there shall be excluded from the basis upon which
Thai tax is imposed any item of income from sources
within the Federal Republic and any item of capital
situated within the Federal Republic which according
to this Agreement may be taxed in the Federal Re-
public. Thailand, however, retains the right to take
into account in the determination of its rate of tax
the items of income and capital so excluded. The
first sentence shall in the case of dividends apply
only to such dividends as are paid to a company
which is a resident of Thailand by a company himited
by shares (Kapitalgesellschaft) which is a resident of
the Federal Republic and at least 25 per cent of the
voting shares of which are owned by the first-
mentioned company. There shall also be excluded
from the basis upon which Thai tax is imposed any
shareholding, the dividends on which, if paid, would
be excluded from the tax basis according to the
immediately foregoing sentence.
b) Tax payable under the laws of the Federal Republic
and in accordance with this Agreement by a resident
of Thailand on income from sources within the
Federal Republic shall be allowed as credit against
‘Thai tax if such income consists of:
1. profits derived by operating ships in international
traffic which may be taxed in the Federal Republic
according to paragraph 2 of Article 8;
2. dividends not dealt with in subparagraph a) above;
3. interest;
4. royalties and gains such as are mentioned in para-
graph 3 of Article 12;
5. profits which may be taxed in the Federal Republic
according to paragraph 2 of Article 15;
6 remuneration mentioned in paragraph 1 of Ar-
ticle 17 paid to a Thai national who is not also a
German national;
7. pensions and other payments and annuities which
may be taxed in the Federal Republic according to
Paragraph 1 of Article 18.
Such credit shall be based on the amount of tax paid to
the Federal Republic but shall not exceed the portion of
the Thai tax which net income from sources within the
Federal Republic bears to the entire net income subject
to Thai tax. In determining such entire net income a loss
incurred in any country shall not be taken into account.