The US-Thailand income tax treaty

By Brent Chudoba, editor Updated September 15, 2026

Under the US-Thailand income tax treaty, the most the paying country can withhold from an ordinary investor is 15% on dividends, 15% on interest and 5% to 15% on royalties depending on what is licensed. Some recipients and some kinds of payment get a different rate, and the table below lists each one. Without a treaty, US-source dividends and royalties paid to a nonresident are withheld at 30%, while the tax code already exempts most portfolio and bank-deposit interest whether or not a treaty applies.

The treaty has generally applied since 1998. It also decides residency when both countries claim you, and assigns who taxes pensions and Social Security. It does not generally stop the US taxing its own citizens.

What are the US-Thailand treaty withholding rates?

US-Thailand treaty withholding rates and who qualifies
Income	Rate cap	Who gets this rate, and where the treaty says so
Dividends	15%	Anyone not in a category below, including an ordinary individual investor (Article 10(2)(b))
Dividends	10%	a company resident in the other country that controls at least 10% of the voting power of the company paying the dividend (the Technical Explanation says indirect holdings and non-voting shares do not count) (Article 10(2)(a))
Interest	15%	Anyone not in a category below, including an ordinary individual investor (Article 11(2)(c))
Interest	10%	interest beneficially owned by any financial institution, including an insurance company (Article 11(2)(a))
Interest	10%	interest on a debt arising from a sale on credit of equipment, merchandise or services by a resident of the other country, unless buyer and seller were not dealing at arm's length (Article 11(2)(b))
Interest	0%	interest paid to the government of the other country, or to a resident of the other country on a debt guaranteed or insured by that other country's government (for Thailand this includes the Bank of Thailand, the Export-Import Bank of Thailand, local authorities and agreed wholly government-owned financial institutions; for the United States, the Federal Reserve Banks, the Export-Import Bank, the Overseas Private Investment Corporation, states and local authorities, and agreed wholly government-owned financial institutions) (Article 11(3))
Royalties	5%	payments for the use of, or right to use, a copyright of a literary, artistic or scientific work, including software, and motion pictures and works on film, tape or other media for radio or television broadcasting (Article 12(2)(a), 12(3)(a))
Royalties	8%	payments for the use of, or right to use, industrial, commercial or scientific equipment (Article 12(2)(b), 12(3)(b))
Royalties	15%	payments for the use of, or right to use, a patent, trademark, design or model, plan, secret formula or process, or for information about industrial, commercial or scientific experience (know-how) (Article 12(2)(c), 12(3)(c))

The cap applies to income paid from one country to a resident of the other, and each treaty conditions it on that resident being the real recipient rather than a conduit; the article cited beside each rate is the one that sets the condition. Which document sets each rate today: dividends, base treaty (1996 Convention); no protocol exists; interest, base treaty (1996 Convention); no protocol exists; royalties, base treaty (1996 Convention); no protocol exists.

What else changes the rate?

These are edge cases. If you hold ordinary shares, bonds or a copyright, skip to the next section.

Dividends: An individual can never use the 10% rate; it is for companies only. Dividends from a US regulated investment company (RIC) are capped at 15% and never get 10% (10(3)). Dividends from a US real estate investment trust (REIT) never get 10%, and get 15% only if the owner is an individual holding less than a 25% interest in the REIT; otherwise the full US domestic rate applies, which the Technical Explanation describes as the 30% statutory rate (10(3)). The same RIC and REIT limits reach Thai companies only once the two tax authorities agree a Thai company is similar. Rates are symmetrical.

Interest: The 0% rate turns on the lender's or guarantor's government, meaning the government of the country where the recipient lives; it is not an exemption for all interest on government bonds, whatever the Letter of Submittal's shorthand suggests. None of these limits applies to an excess inclusion on a residual interest in a US real estate mortgage investment conduit (REMIC) (11(8)). Rates are symmetrical.

Royalties: The rate depends on what is licensed, not on who receives the payment, so there is no single rate for an individual. Most US treaties treat equipment rental as business profits; this one treats it as a royalty at 8% (Technical Explanation to 12(2)(b)). The Technical Explanation also says a software payment can be a royalty or a sale depending on the facts, and payments for shrink-wrap software are business profits. Royalties include gains on selling such a right when the price depends on its productivity, use or disposition (12(3)). Rates are symmetrical.

Which country are you a resident of under the US-Thailand treaty?

If the US and Thailand both treat you as a resident under their own laws, Article 4(2) decides. It works through these tests in order, and stops at the first one that points to a single country:

Where you have a permanent home available to you
If you have a permanent home in both countries, where your personal and economic ties are closer (your centre of vital interests)
If that centre cannot be determined, or you have no permanent home in either country, where you have a habitual abode
If you have a habitual abode in both countries or in neither, the country you are a national of
If you are a national of both countries or of neither, the two tax authorities settle it by mutual agreement

Using the tie-breaker to be treated as a resident of Thailand has US consequences: you file Form 1040-NR with Form 8833 attached, and a green card holder of 8 of the last 15 years who makes the claim is treated as having ended US residency. The details are on the hub page.

How does the US-Thailand treaty tax pensions and Social Security?

Pensions (Article 20(1)). A private pension or similar payment for past employment, paid to a resident of either country, is taxable only in the country where the recipient lives; the Technical Explanation says US plans covered include 401(a), IRA, SEP, 403(a), 403(b) and non-discriminatory 457 plans, but only for distributions meeting its age, service and timing conditions. Because 20(1) is not an exception to the saving clause, the United States still taxes a US citizen living in Thailand on a US pension, and government-service pensions follow 21(2) instead: taxable only by the paying government unless the retiree is both a resident and a national of the other country.

Social Security (Article 20(2)). Social security and similar public pensions (including US tier 1 Railroad Retirement) paid by one country to a resident of the other country or to a US citizen are taxable only by the paying country, and this overrides the saving clause: US Social Security received by a resident of Thailand is taxable only by the United States, and Thai social security received by a US resident or a US citizen is taxable only by Thailand.

Does the treaty stop the US taxing its own citizens?

Generally no. The saving clause (Article 1(2)) keeps that right. Each country may tax its own residents, and tax its citizens, as if the treaty did not exist; this reaches a former citizen whose loss of citizenship had tax avoidance as one of its principal purposes, and for the United States a former long-term lawful resident with the same purpose, for 10 years after the loss.

The exceptions: For everyone, including US citizens (1(3)(a)): correlative transfer-pricing adjustments (9(2)), social security and child support taxed only by the paying country (20(2) and 20(5)), relief from double taxation (25), non-discrimination (26) and mutual agreement (27). Only for individuals who are neither citizens nor immigrants of the taxing country (1(3)(b)): government service (21), students and trainees (22), teachers (23) and diplomats (29).

What does the treaty say about students?

Article 22. A student, professional trainee or grant-funded researcher visiting from the other country is exempt in the host country on gifts from abroad, on the grant, and on up to 3,000 US dollars a year of local pay, for up to five tax years from arrival, counting any time under Article 23 (22(1), 22(4)); an employee or contractor of a home-country resident visiting to gain experience from someone other than the employer, or to study, is exempt on up to 7,500 US dollars a year of pay for up to 12 consecutive months (22(2)), and a participant in a host-government program lasting up to one year is exempt on up to 10,000 US dollars a year of related pay (22(3)). None of this helps a US citizen or green card holder in the United States (1(3)(b)).

What do people most often get wrong about this treaty?

There is one document and no protocol, so every rate is still the 1996 text. Three things a reader would most likely get wrong. First, Thailand's rates are higher and more tiered than the US model treaty: dividends 15% (10% only for a company controlling 10% of the voting power), interest 15% (10% for financial institutions and arm's-length credit sales, 0% for a government lender or government-guaranteed debt), and royalties that depend on what is licensed: 5% copyright including software, 8% equipment rental, 15% patents, trademarks and know-how. Second, for Americans retired in Thailand, US Social Security is taxable only by the United States (20(2)), while a qualifying private US pension or IRA is assigned to Thailand by 20(1) but the United States still taxes its citizens on it under the saving clause. Third, under 4(1) a US citizen or green card holder who is not a Thai resident counts as a US resident for treaty purposes only with a substantial presence, permanent home or habitual abode in the United States; one who is also a Thai resident goes to the 4(2) tie-breaker. Separately, the treaty's own 18(6) says that where the country of residence taxes income only by reference to the amount remitted to or received in it, the other country's treaty relief covers only the amount remitted in the calendar year the income accrues or the next year; IRS Table 1 footnote bbb flags this for Thailand. IRS Table 1 agrees with the treaty text on every rate and article checked.

How do you claim the treaty rate?

Give the US payer Form W-8BEN naming Thailand as your country of residence, before the payment. Many countries ask a US resident for Form 6166, a US residency certificate requested on Form 8802, before they apply the lower rate on their side. Both, with the fees and who can get them, are covered on US tax treaties by country.

Sources

Every rate and article on this page was read in the treaty text and its protocols, then checked a second time by a separate review of the same documents, on September 15, 2026.