The India-Thailand DTAA, in force since 13 October 2015, generally caps dividend, interest, and royalty withholding at 10% each -- and unlike several other treaties this platform covers, it does not contain a general Most Favoured Nation rate-reduction clause.
The India-Thailand DTAA -- rates and scope
The current India-Thailand Double Taxation Avoidance Agreement superseded an earlier 1985 convention.
The Income Tax Department's own site states it was signed on 29 June 2015 at Bangkok and entered into
force on 13 October 2015 -- this platform flags that one secondary source cited a conflicting 29 July
2015 signing date, and recommends the primary-source date while suggesting a final cross-check against
the official Gazette notification. Commonly cited withholding rates are 10% on dividends, 10% on interest,
and 10% on royalties. This platform could not confirm a distinct, separately-stated Fees for Technical
Services rate or article from the treaty text and recommends verifying the exact FTS treatment against the
full treaty text for a specific transaction.
No general MFN clause
Unlike India's treaties with the Netherlands, France, Switzerland, Spain, and Sweden -- each covered
separately on this platform, each containing a Most Favoured Nation rate-reduction clause -- the
India-Thailand DTAA does not contain a general MFN clause. Its Protocol includes only a narrower
provision: if Thailand introduces a domestic-law provision on assistance in collection of taxes, or agrees
to such assistance with another treaty partner, the two governments will negotiate similar assistance.
This platform explicitly does not present this narrower provision as an MFN rate-reduction clause, and
anyone considering an MFN-style argument involving Thailand should not assume one is available.
Practical filing points for an NRI connected to Thailand
Indian-source income paid to a Thailand resident is subject to Section 195 TDS, generally at the rates
set by the Income Tax Act unless a lower treaty rate applies and is properly claimed with a Tax Residency
Certificate and Form 10F. Form 15CA (and Form 15CB where applicable) is required before remittance abroad.
Given the large, long-settled Indian community in Thailand, residential-status questions for an NRI here
often turn on the standard Indian day-count tests rather than any Thailand-specific complication.
Common mistakes in this area for NRIs connected to Thailand:
- Assuming the India-Thailand treaty carries a general MFN clause, when its Protocol only has a
narrower tax-collection-assistance provision.
- Applying withholding rates from the superseded 1985 treaty rather than the current treaty in
force since 13 October 2015.
- Not confirming the exact FTS treatment against the treaty text before relying on a specific
rate.
