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EY
+66 (2) 264-9090, +66 (2) 264-0777, Mail address: +66 (2) 661-9190
G.P.O. Box 1047
Fax: +66 (2) 264-0790, Bangkok 10501 +66 (2) 661-9192 Thailand
Street address: 33rd Floor Lake Rajada Office Complex 193/136-137 New Rajadapisek Road (Opposite Queen Sirikit National Convention Centre) Klongtoey, Bangkok 10110 Thailand
Principal Tax Contact
Yupa Wichitkraisorn
+66 (2) 264-0777, Ext. 77002 Mobile: +66 (84) 439-2673 Email: yupa.wichitkraisorn@th.ey.com
International Tax and Transaction Services – International Corporate Tax Advisory Pathira Lam-ubol
+66 (2) 264-0777, Ext. 77052 Mobile: +66 (92) 250-7363 Email: pathira.lam-ubol@th.ey.com Sarunya Sutiklang-viharn +66 (2) 264-0777, Ext. 21020 Mobile: +66 (84) 910-0470 Email: sarunya.sutiklang-viharn@th.ey.com Kasem Kiatsayrikul +66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
International Tax and Transaction Services – Transaction Tax Advisory Rudeewan Mikhanorn +66 (2) 264-0777, Ext. 77063 Mobile: +66 (92) 283-5551 Email: rudeewan.mikhanorn@th.ey.com
Chinumar Huk-han +66 (2) 264-0777, Ext. 21008 Mobile: +66 (87) 716-6616 Email: chinumar.huk-han@th.ey.com Kasem Kiatsayrikul +66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
International Tax and Transaction Services – Tax Desk Abroad Pariyanuch Ngamcherdtrakul +1 (212) 773-7512 (resident in New York) Mobile: +1 (718) 915-6554 Email: pariyanuch.ngamcherdtrakul1@ey.com
International Tax and Transaction Services – International Capital Markets
+66 (2) 264-0777, Ext. 21008 Email: chinumar.huk-han@th.ey.com Kasem Kiatsayrikul +66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
Chinumar Huk-han
International Tax and Transaction Services – Operating Model Effectiveness
Su San Leong
William Chea
+66 (2) 264-0777, Ext. 77036
Mobile: +66 (92) 283-3113 Email: su-san.leong@th.ey.com
+66 (2) 264-0777, Ext. 77056 Mobile: +66 (81) 341-9350 Email: william.chea@th.ey.com
International Tax and Transaction Services – Transfer Pricing
Papatchaya Akkararut
+66 (2) 264-0777, Ext. 77064
Mobile: +66 (83) 979-6111 Email: papatchaya.akkararut@th.ey.com
Sorraya Boonsongprasert +66 (2) 264-0777, Ext. 77109 Mobile: +66 (96) 915-6995 Email: sorraya.boonsongprasert@th.ey.com
Su San Leong +66 (2) 264-0777, Ext. 77036 Mobile: +66 (92) 283-3113 Email: su-san.leong@th.ey.com
Hirohisa Furuse
+66 (2) 264-0777, Ext. 54035 Mobile: +66 (92) 617-3581 Email: hirohisa.furuse@th.ey.com
Kasem Kiatsayrikul +66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
Yupa Wichitkraisorn +66 (2) 264-0777, Ext. 77002 Mobile: +66 (84) 439-2673 Email: yupa.wichitkraisorn@th.ey.com
Business Tax Services
Kamolrat Nuchitprasitchai +66 (2) 264-0777, Ext. 77062 Mobile: +66 (92) 283-2112 Email: kamolrat.nuchitprasitchai@th.ey.com
Kasem Kiatsayrikul +66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
Yupa Wichitkraisorn +66 (2) 264-0777, Ext. 77002 Mobile: +66 (84) 439-2673 Email: yupa.wichitkraisorn@th.ey.com
Business Tax Advisory
Kamolrat Nuchitprasitchai
Kasem Kiatsayrikul
+66 (2) 264-0777, Ext. 77062 Mobile: +66 (92) 283-2112 Email: kamolrat.nuchitprasitchai@th.ey.com
+66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
Yupa Wichitkraisorn +66 (2) 264-0777, Ext. 77002 Mobile: +66 (84) 439-2673 Email: yupa.wichitkraisorn@th.ey.com
Tax and Finance Operate
Wiwattana Akkarawong
Jarassri Esapong
+66 (2) 264-0777, Ext. 77053
Mobile: +66 (96) 391-6642 Email: wiwattana.akkarawong@th.ey.com
+66 (2) 264-0777, Ext. 77089
Mobile: +66 (95) 501-6556 Email: jarassri.esapong@th.ey.com
Phasist Thanapitwiwat +66 (2) 264-0777, Ext. 77105 Mobile: +66 (85) 136-4456 Email: phasist.thanapitwiwat@th.ey.com
Chinumar Huk-han
+66 (2) 264-0777, Ext. 21008 Mobile: +66 (87) 716-6616 Email: chinumar.huk-han@th.ey.com
Tax Technology and Transformation
Kamolrat Nuchitprasitchai
Global Compliance and Reporting
Wiwattana Akkarawong
+66 (2) 264-0777, Ext. 77062
Mobile: +66 (92) 283-2112 Email: kamolrat.nuchitprasitchai@th.ey.com
+66 (2) 264-0777, Ext. 77053 Mobile: +66 (96) 391-6642 Email: wiwattana.akkarawong@th.ey.com
Jarassri Esapong +66 (2) 264-0777, Ext. 77089
Mobile: +66 (95) 501-6556 Email: jarassri.esapong@th.ey.com
Phasist Thanapitwiwat +66 (2) 264-0777, Ext. 77105
Mobile: +66 (85) 136-4456 Email: phasist.thanapitwiwat@th.ey.com
Puangrat Anusanti
People Advisory Services
Siriporn Thamwongsin
+66 (2) 264-0777, Ext. 77088
Mobile: +66 (61) 402-7102 Email: puangrat.anusanti@th.ey.com
+66 (2) 264-0777, Ext. 77090 Mobile: +66 (61) 418-2667 Email: siriporn.thamwongsin@th.ey.com
Wai Ph’ng Ng +66 (2) 264-0777, Ext. 2102 Mobile: +66 (86) 979-0742 Email: wai-ph’ng.ng@th.ey.com
Yupa Wichitkraisorn +66 (2) 264-0777, Ext. 77002 Mobile: +66 (84) 439-2673 Email: yupa.wichitkraisorn@th.ey.com
Indirect Tax
William Chea +66 (2) 264-0777, Ext. 77056 Mobile: +66 (81) 341-9350 Email: william.chea@th.ey.com
Thitima Tangprasert +66 (2) 264-0777, Ext. 77035 Mobile: +66 (81) 371-6927 Email: thitima.tangprasert@th.ey.com
Legal Services
Kamolrat Nuchitprasitchai
+66 (2) 264-0777, Ext. 77062 Mobile: +66 (92) 283-2112 Email: kamolrat.nuchitprasitchai@th.ey.com
Kasem Kiatsayrikul +66 (2) 264-0777, Ext. 77033 Mobile: +66 (84) 439-2703 Email: kasem.kiatsayrikul@th.ey.com
B. Taxes on corporate income and gains
Corporate income tax. Thai resident companies are subject to corporate income tax on their worldwide income. Thai resident companies are those incorporated in Thailand. Branches of for eign corporations are subject to Thai tax on Thailand-source income only.
Rates of corporate tax. Thai resident companies and branches of foreign corporations are subject to corporate income tax at a flat rate of 20% on taxable profits.
Progressive corporate income tax rates of 0%, 15% and 20% apply to locally incorporated companies with paid-up capital of not more than THB5 million and revenue of not more than THB30 million per year.
Tax incentives. Tax incentives are available in Thailand for International Business Centers (IBCs) and Treasury Centers (TCs), if relevant conditions are met.
IBCs. An IBC should be able to provide support services func tions and/or financial management services under a TC license from the Bank of Thailand. The following are tax incentives available to IBCs and TCs:
• Reduced corporate income tax rate to 8%, 5% or 3%, based on the net profits from qualifying service fees and royalty income earned from its Thai and overseas associated enterprises, if it meets annual local spending requirements of THB60 million, THB300 million or THB600 million, respectively (see below)
• Exemption from corporate income tax on qualifying dividends received from its associated enterprises
• Exempt from Specific Business Tax (see Section D) on qualify ing income from treasury services
• Entitled to a flat personal income tax rate of 15% for employ ment remuneration of qualifying expatriates working full time for the qualifying IBC
• Exemption from withholding tax on dividends distributed by the IBC to its overseas shareholders that are paid out of profits from the IBC’s operations that are subject to tax at a reduced corporate income tax rate
• Exemption from withholding tax on qualifying interest paid by the IBC to an overseas loan provider in connection with a loan obtained for re-lending as a result of its treasury activities
The following are the conditions for qualifying as an IBC:
• Registered share capital of at least THB10 million at the end of each accounting year
• Providing qualifying support services and/or treasury services to its associated enterprises
• Employing at least 10 skilled full-time employees (or at least 5 employees if the IBC performs only a treasury center function)
• Minimum local spending requirement of at least THB60 mil lion per accounting period unless converted from a Regional Operating Headquarters (ROH) or IHQ (see below)
• Obtains approval from the Director-General of the Revenue Department
Qualifying IBCs are entitled to reduced corporate income tax rates of 8%, 5% or 3%, provided that is meets the minimum annual local spending requirements of THB60 million, THB300 million or THB600 million, respectively. However, for entitlement to the reduced 8% corporate income tax rate, no minimum local spend ing requirement is imposed on ROH Is (ROH Is are the ROHs registered under Royal Decree No. 405) that convert to IBCs, while ROH IIs (ROH IIs are the ROHs registered under Royal Decree No. 508) and IHQs that convert to IBCs are required to have minimum local spending of at least THB15 million per accounting year.
Capital gains. Capital gains are treated as ordinary business income subject to income tax.
Administration. Corporate income tax returns, together with the audited financial statements, must be filed with the Revenue Department within 150 days after the accounting year-end. Corporate income tax payments are due on the filing date.
Mid-year (interim) tax returns must be filed with interim tax pay ments within two months after the end of the first half of the accounting year. Listed companies, financial institutions and com panies approved by the Director-General of the Revenue Department compute their interim tax based on actual operating results for the first half-year. Other companies compute their interim tax based on one-half of the estimated annual profit. These companies do not have to submit audited or reviewed finan cial statements. The interim tax is creditable against the annual tax payable at the end of the year.
Dividends
Received from resident companies. In general, one-half of divi dends received by resident companies from other resident com panies may be excluded from taxable income. However, the full amount of the dividends may be excluded if either of the follow ing applies:
• The recipient is a company listed on the Stock Exchange of Thailand.
• The recipient owns at least a 25% equity interest in the distrib uting company, provided that the distributing company does not own a direct or indirect equity interest in the recipient company.
These rules apply if the related shares are acquired not less than three months before receiving the dividends and are not disposed of within three months after receiving the dividends.
Received from foreign companies. A Thai company that owns an equity interest of at least 25% in a foreign company can exclude dividends received from such foreign company from its taxable profit if, on the date of receipt of the dividend, it has held the investment for at least six months and if the profit out of which the dividends are distributed is subject to income tax in the hands of the foreign company at a rate of at least 15%.
Foreign tax relief. Thailand has entered into double tax treaties with 61 jurisdictions. In general, under the treaties, foreign tax relief is limited to the lower of the foreign tax and the amount of Thai tax calculated on such income.
Foreign tax payable in non-treaty jurisdictions may be credited against Thai tax, limited to the Thai tax computed on the foreign income, provided the foreign tax meets the conditions set forth in the relevant measure. If the foreign tax is not used as a credit, it may be claimed as a deduction for income tax purposes.
C. Determination of trading income
General. Corporate income tax is based on audited financial state ments, subject to certain adjustments.
In general, expenses are tax-deductible if they are incurred wholly and exclusively for the purpose of generating income. However, expenses created by means of provisions or allowances, such as those for bad debts or stock obsolescence, are not tax-deductible until they are actually used.
Inventories. Inventories must be valued at the lower of cost or market value. Cost may be determined using any generally accepted accounting method. After a method is adopted, a change to another method may be made only with approval of the Director-General of the Revenue Department.
Depreciation and amortization allowance. A company may depre ciate its fixed assets under any generally accepted accounting method, provided the number of years of depreciation under the selected method is not less than the minimum prescribed period. However, after a method is adopted, it may not be changed unless prior consent has been obtained from the Director-General of the Revenue Department. The following are the minimum prescribed periods applicable to some major fixed assets.
Asset Time period
Buildings 20 years Furniture, fixtures, machinery, equipment and motor vehicles 5 years Trademarks, goodwill, licenses, patents and copyrights (including software)
Over period of use (or 10 years if no period of use)
Computer hardware and operating software 3 years
Relief for losses. Operating losses may be carried forward for a period of five years. Loss carrybacks are not allowed.
Groups of companies. The Thai tax law does not include any pro visions for consolidated treatment under which companies within a group may be treated as one tax entity. Each individual company must file its income tax return and pay its tax.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax Rate (%)
Value-added tax, on goods sold, services rendered and imports 7 Specific Business Tax, on financial service and real estate businesses Various
E. Miscellaneous matters
Foreign-exchange controls. On presentation of supporting documents, virtually all foreign-exchange transactions may be pro cessed by a commercial bank.
Transfer pricing. Under Thailand transfer-pricing laws and regula tions, all transactions with related parties must be executed at an arm’s-length price, and the taxpayer may prepare and maintain contemporaneous documentation to substantiate the price. Acceptable transfer-pricing methods include the following:
• Comparable uncontrolled price method
• Resale price method
• Cost-plus method
• Profit split method
• Transactional net margin method.
If the taxpayer fails to prove that a transaction challenged by the tax authorities was executed on an arm’s-length basis, additional tax can be assessed.
The following are the key features of Thailand transfer-pricing provisions, effective from accounting years starting on or after 1 January 2019:
• The tax authorities can assess additional tax on a transfer price charged between related parties if it is not at market rate.
• Taxpayers who have a related party and generate annual reve nue (per the audited financial statements) of THB200 million and above are required to prepare the Transfer Pricing Disclosure Form (TPDF) and submit it to Thai Revenue Department within 150 days after the accounting year end.
• Up to five years after submission of the TPDF, the tax authori ties with the approval of the Director-General of the Revenue Department can request additional transfer-pricing documenta tion. The taxpayer is required to submit the transfer-pricing documentation within 60 days after receiving a request letter. In the case of a first-time request, the taxpayer has 180 days to prepare the transfer pricing documentation.
In September 2021, the Thai Revenue Department issued two new regulations, Director-General of Thai Revenue Department Notification (DGN) 407 and DGN 408.
The DGN 407 provides the key mandatory items of the transferpricing documentation under the transfer-pricing provisions. It is similar to the list of information required for the Local File under Organisation for Economic Co-operation and Development (OECD) guidelines. The Master File has not been required under any regulation to date.
The DGN 408 is related to the local requirement of the Countryby-Country Report (CbCR). Basically, it is applied to Thai tax payers in the group with annual revenue of THB28 billion and above. Basically, the following taxpayers are required to file the CbCR in Thailand.
• Thai ultimate parent entity of the group
• A Thai subsidiary of the group if any of the following circum stances exist:
—
The ultimate parent entity of the group is not required to submit a CbCR in its country of residence for tax pur poses.
— The ultimate parent entity of the group is required to sub mit a CbCR in its country of residence for tax purposes, but that country does not have an agreement on exchange of information with Thailand or such agreement was not yet effective during the reporting period. There is a systematic failure during information exchange.
• A Thai subsidiary is appointed as a surrogate by the ultimate parent entity of the group.
F. Treaty withholding tax rates
The rates in the table reflect the lower of the treaty rate and the rate under domestic tax law.
Dividends Interest (a)(b) Royalties
% % %
Armenia 10 15 (c) 15
Australia 10 15 (c) 15
Austria 10 15 (c) 15 Bahrain 10 15 (c) 15
Bangladesh 10 15 (c) 15
Belarus 10 15 (c)(q) 15
Belgium 10 15 (c) 15 (f)
Bulgaria 10 15 (c)(e) 15 (f)
Cambodia 10 15 (c) 10
Canada 10 15 (c) 15 (f)
Chile 10 15 15 (u)
China Mainland 10 15 (c) 15
Cyprus 10 15 (c)(e)(q) 15 (r)
Czech Republic 10 15 (c) 15 (f)(g)
Denmark 10 15 (o) 15 (f)
Estonia 10 10 (c) 10 (x)
Finland 10 15 (c) 15 France 10 15 (c)(d) 15 (f)(h)
Germany 10 15 (c)(e) 15 (f)
Hong Kong 10 15 (c)(m) 15 (f)(g)
Hungary 10 15 (c) 15
India 10 15 (c) 10 (cc)
Indonesia 10 15 (c) 15
Ireland 10 15 (c)(y) 15 (z)
Israel 10 15 (c) 15 (f)
Italy 10 15 (c)(e) 15 (f)
Japan 10 15 (c) 15
Korea (South) 10 15 (c) 15
Kuwait 10 15 (c)(e)(o) 15
Laos 10 15 (c)(e) 15
Luxembourg 10 15 (c) 15
Malaysia 10 15 (c) 15
Mauritius 10 15 (c) 15 (f)
Myanmar 10 10 (c) 15 (f)(v)
Dividends Interest (a)(b) Royalties % % %
Nepal 10 15 (c) 15
Netherlands 10 15 15 (f)
New Zealand 10 15 (c)(m) 15 (n)
Norway 10 15 (c)(o) 15 (f)(s)
Oman 10 15 (c)(t) 15
Pakistan 10 15 (c) 15 (f)(h)
Philippines 15 (w) 15 (c) 15
Poland 10 15 (c) 15 (f)(h)
Romania 10 15 (c) 15
Russian
Federation 10 15 (c) 15
Seychelles 10 15 (c) 15
Singapore 10 15 (c) 10 (bb)
Slovenia 10 15 (c)(o) 15 (k)
South Africa 10 15 (c) 15
Spain 10 15 (c) 15 (l)
Sri Lanka 10 15 (c) 15
Sweden 10 15 (c) 15
Switzerland 10 15 (i) 15 (f)(g)
Taiwan 10 (w) 15 (c) 10
Tajikistan 10 10 (c)(aa) 10 (f)
Turkey 10 15 (c) 15
Ukraine 10 15 (c)(o) 15
United Arab Emirates 10 15 (c)(e)(o) 15
United Kingdom 10 15 (c) 15 (f)
United States 10 15 (c)(j) 15 (k)
Uzbekistan 10 15 (c)(p) 15
Vietnam 10 15 (c) 15
Non-treaty jurisdictions 10 15 15
(a) The following types of interest are exempt from tax:
• Interest paid to a financial institution wholly owned by another state
• Interest on certain foreign-currency loans brought into Thailand between 1 May 1979 and 28 February 1990
• Interest paid by the government or a financial institution established by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce and industry
• Interest paid by the central bank or state enterprises on loans approved by the Ministry of Finance
(b) The rate is reduced to 10% if the interest is paid to banks, financial institu tions or insurance companies of the treaty countries.
(c) Interest paid to the government, subdivisions of contracting states or a central bank is exempt from tax.
(d) The withholding rate is 3% for interest on loans or credits granted for at least four years with the participation of a public financing institution to a statutory body or enterprise of the other contracting state, in relation to sales of equip ment, or in relation to the survey, installation or supply of industrial, com mercial or scientific premises, or public works.
(e) Interest paid to a financial institution wholly owned by the other contracting state is exempt.
(f) The withholding rate is 5% (10% for Pakistan) for royalties for copyrights of literary, artistic or scientific works.
(g) The withholding rate is 10% for royalties paid for patents, trademarks, designs, models, plans, or secret formulas or processes.
(h) Royalties and similar payments paid to the other contracting state or a stateowned company for films or tapes are exempt.
(i) Interest paid to residents of Switzerland with respect to loans guaranteed or insured under the Swiss provisions regulating the Export or Investment Risk Guarantee is exempt.
(j) The rate is reduced to 10% for interest paid on indebtedness resulting from sales on credit of equipment, merchandise or services. Interest on debt obli gations guaranteed or insured by the government is exempt.
(k) The withholding rate is 5% (10% for Slovenia) for royalties for the use of, or the right to use, copyrights of literary, artistic or scientific works, including software and motion pictures and works on films, tape or other means of reproduction for use in connection with radio or television broadcasting. The withholding rate is 8% (10% for Slovenia) for royalties for the use of, or the right to use, industrial, commercial or scientific equipment.
(l) The withholding rate is 5% for royalties paid for the use of, or the right to use, copyrights of literary, dramatic or scientific works, excluding cinemato graphic films or films or tapes used for radio or television broadcasting. The withholding rate is 8% for amounts paid under financial leases for the use of, or the right to use, industrial, commercial or scientific equipment.
(m) The rate is reduced to 10% for interest paid on indebtedness resulting from sales on credit of equipment, merchandise or services, except for sales between persons not dealing with each other at arm’s length. Under the New Zealand treaty, interest derived by the government of New Zealand or its central bank from the investment of official reserves is exempt from tax.
(n) The withholding tax rate is 10% for royalties paid for the following:
• The use of or right to use, copyrights, industrial, scientific or commercial equipment, motion picture films, films or videotapes or other recordings for use in connection with television, and tapes or other recordings used in connection with radio broadcasting
• For the reception of, or the right to receive, visual images or sounds trans mitted to the public by satellite, cable, optic fiber or similar technology
• For the use of, or right to use, in connection with television or radio broad casting, visual images or sounds transmitted by cable, optic fiber or similar technology
(o) Interest on loans made, guaranteed or insured by the government, central bank, agency or body wholly owned or controlled by the government is exempt from tax.
(p) Interest is exempt from tax if it is paid on loans made, guaranteed or insured by the contracting state or by an authorized body of the state on behalf of the state or if it is paid on other debt claims or credits guaranteed or insured on behalf of the contracting state by an authorized body of the state.
(q) The rate is reduced to 10% for interest paid on indebtedness resulting from sales on credit of industrial, commercial, or scientific equipment or from sales on credit of merchandise between enterprises.
(r) A withholding tax rate of 5% applies to royalties for the use of, or the right to use, copyrights of literary, dramatic, musical, artistic or scientific works, includ ing software, cinematographic films and films or tapes used for radio or television broadcasting. A withholding tax rate of 10% applies to royalties for the use of, or the right to use, industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experi ence.
(s) The withholding tax rate is 10% for royalties paid for the use of, or the right to use, industrial, commercial or scientific equipment.
(t) The rate is reduced to 10% if the loan or debt claim generating the interest is guaranteed by the government, central bank, state general reserve fund, local authorities, or a body wholly owned by the government.
(u) The withholding tax rate is 10% for royalties paid for copyrights of literary, artistic or scientific works and the right to use industrial, commercial and scientific equipment.
(v) The withholding tax rate is 10% for royalties paid for managerial or consul tancy services or for information concerning commercial, industrial, or sci entific experience.
(w) The withholding tax rate is reduced to 5% (10% for Philippines) if the benefi cial owner holds directly at least 25% of the dividend-paying company.
(x) The withholding tax rate is 8% for royalties paid for the use of, or the right to use, industrial, commercial or scientific equipment. The rate is 10% for royal ties in other cases.
(y) The rate is 10% for interest paid on indebtedness resulting from sales on credit of equipment, merchandise or services, except for sales between per sons not dealing with each other at arm’s length.
(z) The withholding tax rate is 5% for royalties for the use of, or the right to use, copyrights of literary, artistic or scientific works, including software and motion pictures and works on films or other means of reproduction for use in connection with radio or television broadcasting. The rate is 10% for royalties for the use of, or the right to use, industrial, commercial or scientific equip ment or patents.
(aa) Interest is exempt from tax if any of the following circumstances exists:
• The interest is paid in connection with the sale on credit of merchandise or equipment.
• This interest is paid on a loan or credit granted by a bank.
• The interest is paid to the government including a political subdivision or local authority thereof, the central bank or a financial institution controlled by the government.
• The interest is paid to a resident of the other contracting state in connection with a loan or credit guaranteed by the government including a political subdivision or local authority thereof, the central bank or a financial institu tion controlled by the government.
(bb) The withholding rate is 5% for royalties for the use of, or the right to use, copyrights of literary, artistic or scientific works, including software and cinema films, or films or tape for radio or television broadcasting. The with holding rate is 8% for royalties for the use of, or the right to use, patents, trademarks, designs, models, plans, secret formulas or processes, or indus trial, commercial, or scientific equipment. The withholding tax rate is 10% for other types of royalties.
(cc) The maximum withholding tax rate for all types of royalties is 10%.