ARTICLE 31

Termination

1. This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after 5 years from the date on which the Convention enters into force, provided that at least 6-months prior notice of termination has been given through diplomatic channels. In such event, the Convention shall cease to have effect:

a) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January next following the expiration of the 6-months period;

b) in respect of other taxes, for taxable periods beginning on or after the first day of January next following the expiration of the 6-months period.

2. Notwithstanding paragraph 1, this Convention shall terminate on January 1 of the 6th year following the year in which the Convention enters into force, unless the Government of the United States has received from the Government of Thailand by June 30, of the 5th year following entry into force, a diplomatic note of the character described in the last sentence of paragraph 3 of Article 28 (Exchange of Information).

DONE at Bangkok in duplicate, on this 26th day of November, 1996, in the English language.

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA: KINGDOM OF THAILAND: (s) William H. Itoh (s) Amnuay Virawan Ambassador of the Deputy Prime Minister and United States of America Minister of Foreign Affairs

NOTES OF EXCHANGE

EMBASSY OF THE UNITED STATES OF AMERICA

Bangkok, November 26, 1996

No. 1107

His Excellency Amnuay Viravan, Deputy Prime Minister and, Minister of Foreign Affair, of the Kingdom of Thailand

EXCELLENCY: I have the honor to present my compliments to Your Excellency and have the honor to refer to the Convention Between the Government of the United States of America and the Government of the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed by our two governments on November 26, 1996.

I have the further honor, on behalf of the Government of the United States of America, to convey the following understandings relating to the Convention:

It is understood that if the United States hereafter alters its policy regarding the provision of a tax sparing credit, or if the United States reaches an agreement on the provision of a tax sparing credit with any other country, the United States will agree to reopen negotiations with Thailand with a view to the conclusion of a Protocol which would provide a similar tax sparing credit to Thailand.

It is understood that if Thailand agrees in a treaty or other agreement with any other country to (1) a rate of tax an income or profits derived by residents of such other country on the operation of ships that is lower than the rate specified in paragraph 2 of Article 8 (Shipping and Air Transport), or (2) treatment for the rental or use of containers in international traffic that is more favorable than the treatment specified in paragraph 8 of Article 7 (Business Profits) or paragraph 4 of Article 8 (Shipping and Air Transport), then Thailand will agree to reopen negotiations with the United States with a view to the conclusion of a Protocol which would extend such lower rate or more favorable treatment to residents of the United States.

It is understood that the use of the term “conditions” in paragraph 1 of Article 25 (Relief from Double Taxation) is intended to make clear that U.S. rules regarding “dual capacity” taxpayers apply in determining the extent to which the Thailand petroleum income tax will be considered an income tax under Article 25.

I would appreciate confirmation that the Government of the Kingdom of Thailand shares these understandings.

Accept, Excellency, the renewed assurances of my highest consideration.

(s) William H. Itoh Ambassador Extraordinary and Plenipotentiary

of the United States of America

No. 0504/4970 Ministry of Foreign Affairs

Saranrom Palace.

26 November B.E. 2539 (1996)

His Excellency William H. Itoh Ambassador Extraordinary and Plenipotentiary of the United States of America BANGKOK

Excellency,

I have the honour to present my compliments to Your Excellency and have the honor to acknowledge receipt of Your Excellency's Note No. 1107 dated 26 November l996 which reads as follows:

“I have the honor to present my compliments to Your Excellency and have the honor to refer to the Convention Between the Government of the United States of America and the Government of the Kingdom of Thailand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed by our two Governments on November 26, 1996.

I have the further honor, on behalf of the Government of the United States of America, to convey the following understandings relating to the Convention:

It is understood that if the United States hereafter alters its policy regarding the provision of a tax sparing credit, or if the United States reaches an agreement on the provision of a tax sparing credit with any other country, the United States will agree to reopen negotiations with Thailand with a view to the conclusion of a Protocol which would provide a similar tax sparing credit to Thailand.

It is understood that if Thailand agrees in a treaty or other agreement with any other country to (1) a rate of tax on income or profits derived by residents of such other country on the operation of ships that is lower than the rate specified in paragraph 2 of Article 8 (Shipping and Air Transport), or (2) treatment for the rental or use of containers in international traffic that is more favorable than the treatment specified in paragraph 8 of Article 7 (Business Profits) or paragraph 4 of Article 8 (Shipping and Air Transport), then Thailand will agree to reopen negotiations with the United States with a view to the conclusion of a Protocol which would extend such lower rate or more favorable treatment to residents of the United States.

It is understood that the use of the term "conditions" in paragraph 1 of Article 25 (Relief from Double Taxation) is intended to make clear that U.S. rules regarding "dual capacity" taxpayers apply in determining the extent to which the Thailand petroleum income tax will be considered an income tax under Article 25.

I would appreciate confirmation that the Government of the Kingdom of Thailand shares these understandings.

Accept, Excellency, the renewed assurance of my highest consideration."

In reply, I have the honour to confirm that the Government of the Kingdom of Thailand shares the same understandings contained in Your Excellency’s Note under reference.

Accept, Excellency, the renewed assurances of my highest consideration.

(s) Amnuay Viravan Deputy Prime Minister and

Minister of Foreign Affairs