Transcript of the above video:

As the title of this video suggests, we are discussing Tax Treaties. The preface to this video I will say, you always have to remember, Treaty Law is an interesting subset of law. Even one specific Treaty can almost be its own specialty. I found this to be the case as a student of the US-Thai Treaty of Amity lo these past roughly 15 going on 16 now years that yeah knowing even just one Treaty really well can be its own specialty which is saying something because that means you have to have a lot of pretty deep knowledge about a given tract if you will, about a given charter, about a given body of law. That is kind of what each individual Treaty is. It's its own sort of exclusive unto itself if you will, body of Law. I remember I had a Contracts Professor who described contracts between individuals as 'private legislation between two parties or two or more parties'. Well Treaties are very similar in that they are in fact under the US system with our ratification process and Article 6, aka the Supremacy Clause wherein Treaties once ratified become the so-called "law of the land". In a very real sense, they are sort of bilateral legislation which pertains solely to the two parties under the American system, very similar I think analysis with regarded Treaties here in Thailand. So the first thing to take away is to understand that Treaties are in and of themselves sort of a specialty. 

I thought of making this video after reading a recent comment on one of our prior videos regarding Double Tax Treaties and this recently announced change to how Thailand will apply tax liability, especially on foreign remittances inbound and how they are assessed after Jan 1 of 2024. Not going to go too deep into that in this video because we are anticipating further regulatory clarification on that, hopefully before January 1 rolls around. That said, quoting directly from this comment: "Fun facts on the US citizen only retiree side - For retirees who receive Social Security and are not taxed by the US Government because your earnings outside Social Security do not reach the required threshold under the tax code to be included in AGI, this is covered by Section 20 of the US-Thai Tax Treaty. Also Social Security or OASDI remuneration received is exempt from taxation in Thailand under the Treaty." (I am going to come back to that.) "Also excluded are US Government pensions, not only that, annuity payments issued by US life insurance companies are also exempt." A lot of good information in there; a lot of good data points if you will. 

That said, there is a presumption in here that I don't think people are fully understanding when it comes to any Treaty let alone a Double Tax Treaty, any of them. Just going back to this quote: "Also Social Security, or OASDI remuneration received is exempt from taxation in Thailand under the Treaty." That is your interpretation; that might be the American interpretation; that might be the Thai interpretation and it might not. Remember, there are two parties to a Treaty and both of those parties are sovereign. Their Courts and their legislatures make their own laws. Now statutory law may not be able to trump Treaty Laws, we have discussed in other videos notably for example in the United States the Supremacy Clause after ratification of a US Treaty via the Senate, for example the US-Thai Treaty of Amity, that treaty is incorporated, I would argue, sort of akin to an amendment of the Constitution. It is incorporated under Article 6 as the Supreme Law of the Land to quote Article 6. So okay, that is incorporated in but there is another party to it and they may interpret the terms of the Treaty in their own nation as being different than the interpretation in the other party country. 

So again the thing to understand, and I am not saying that anything in that comment was wrong per se, what I am saying is there is an assumption being made that the interpretation on one end of the spectrum is going to be precisely the same as the interpretation on the other end of the spectrum. What I mean to say is the interpretation of one party as to the terms of that Treaty may be different than the interpretation for example of the Courts for example of another party or the Revenue Department or Tax Authorities generally, or bodies, or committees which are tasked with interpreting and applying, well making findings of facts and then making conclusions of law based upon their interpretation. So again that's the reason for the kind of quirky title here is 'it takes two to tango' in not only making a Treaty, but the tango goes on if you will and it goes on in kind of an interesting way where each of the parties might be applying the same law with a slightly different interpretation on folks in their jurisdiction differently.