C. Elimination of double taxation
The focus of a DTA is the elimination of double taxation. Each DTA may prescribe different methods of elimination of double taxation of a person by the resident country:
(1) Exemption method
The country of residence does not tax the income which according to the DTA is taxed in the source country.
(2) Credit method
The resident country retains the right to tax the income which was already taxed in the source country. It calculates its tax on the basis of the taxpayer's total income including income from the other country which according to the DTA is taxed in that other country. However, it allows a deduction from its own tax for the tax paid in the other country.Where a DTA does not exist with a particular country, there are provisions within the Royal Decree No. 300 which allow unilateral credit relief against Thai tax for tax paid in the other country by a Thai juristic person.