CONVENTION
Between Luxembourg and Belgium for the Avoidance of Double Taxation and
the Settlement of Certain Other Questions Relating to Taxes income and on capital

 

His Royal Highness the Grand Duke of Luxembourg, and

His Majesty the King of the Belgians,

– Scope of the Convention

Article 1

Persons covered

This Convention shall apply to persons who are residents of one or both Contracting States

or of both States.

 

Article 2

Taxes referred to

(1). This Convention shall apply to taxes on income and on capital imposed on behalf of each of the Contracting States, its political subdivisions and its local

 (2) Taxes on total income, total wealth, or on items of income or wealth, including taxes on including taxes on gains from the alienation of movable or immovable property, taxes on the property, taxes on the amount of wages paid by employers, and taxes on capital gains.

The current taxes to which the Convention applies are

In the case of Belgium:

(a) the personal income tax

(b) the tax on companies;

(c) the tax on legal persons

(d) the tax on non-residents;

including withholding taxes, additional cents to the said taxes, and withholding taxes

as well as the additional taxes on personal income tax,(hereinafter referred to as “Belgian tax”)

In respect of the Grand Duchy of Luxembourg

(a) the personal income tax;

(b) the tax on the income of communities;

(c) the wealth tax;

(d) the communal commercial tax;

(e) the property tax,

(hereinafter referred to as “Luxembourg tax”).

The Convention shall also apply to future taxes of the same or a similar nature which are in addition to the present taxes which are additional to or replace existing taxes. The competent authorities of the Contracting States shall inform each other at the end of each year of the changes to each other at the end of each year of the changes made in their respective taxation laws.

 

Article 3

General Definitions

For the purposes of this Convention, unless the context otherwise requires different interpretation:

1. the term “Belgium”, used in a geographical sense, means the territory of the Kingdom of Belgium; it includes any territory outside the national sovereignty of Belgium which is or will be designated under Belgian continental shelf legislation and continental shelf and in accordance with international law, as territory over which the rights of on which the rights of Belgium with respect to the soil and subsoil of the sea and their natural resources may be exercised;

the term “Luxembourg”, used in a geographical sense, means the territory of the Grand Duchy of Luxembourg;

the terms “a Contracting State” and “the other Contracting State” mean, depending on the context, Belgium or Luxembourg;

the term “person” includes an individual and a company

the term “company” means any legal person or other entity which may be taxed on its income or capital in the State of which it is a resident, as well as general partnerships, limited partnerships, and civil companies under Luxembourg law;

the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

the term “competent authority” means

(a) in the case of Belgium, the competent authority under its national law

(b) as regards Luxembourg, the Minister having direct taxes in his attributions or his delegate.

 

(2) For the application of the Convention by a Contracting State, any expression not otherwise defined shall have the meaning which it has under the law of that State concerning taxes which are the subject of the Convention unless the context otherwise requires different interpretations.

 

Article 4

Domicile for tax purposes

1. (a) For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax in that State by reason of his domicile, residence, place of management or any other criterion of a similar nature the second sentence of § 1 of Article 4 of this Convention shall be replaced by the following of this Convention shall be replaced by paragraphs 1 and 3 of Article 3 of the IM]1

[it also refers to general partnerships, limited partnerships and civil companies under Luxembourg law and civil companies under Luxembourg law, which have their place of effective management in Luxembourg, as well as companies under Belgian law – other than joint-stock companies -which have opted to have their profits subject to personal income tax]. The taxpayer is not required to pay any tax on the profits of the company.]

(a) the taxpayer is not required to pay the tax on the profits of the company or its subsidiaries.

(b) the taxpayer is a resident of each of the Contracting States, the case shall be resolved in accordance with The following rules shall apply:

 

(1) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. Where he has a permanent home available to him in each of the Contracting States, he shall be deemed to be a resident of the Contracting State with which his or her personal and economic relations are closest (center of vital interests);

 

(2) if the Contracting State in which such person has his center of vital interests cannot be determined or he has no permanent home in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he is ordinarily present;

 

(3) if such person is ordinarily present in each of the Contracting States or is not ordinarily present in either of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

 

4. notwithstanding the provisions of 1.2. and 3:

(a) employees and hired hands who are employed on an inland navigation vessel operating in international traffic and whose only permanent abode is on board that vessel shall be deemed to be residents of the Contracting State in which the enterprise operating that vessel has its place of effective management

(b) boatmen whose only permanent home is on board a vessel which they operate in international traffic shall be deemed to be residents of the Contracting State of which they are nationals;

 

(5) if a person referred to in subparagraph 3 or 4(b) has the nationality of each of the Contracting States or does not have the nationality of either of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

 

(6) Where, under the provision of § 1, a company is considered to be a resident of each of the Contracting States, it shall be deemed to be a resident of the Contracting State in which it is situated of each of the Contracting States, it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.

 

(7) If the place of effective management of an inland navigation enterprise engaged in international traffic is on board a vessel, that place of business shall be deemed to be in the Contracting State of which the sole or principal operator is a resident.

 

Article 5

Permanent establishment

1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business where the enterprise carries on all or part of its activities.

 

(2) The term “permanent establishment” includes in particular

1. 1. a place of management;
   2. a branch office
   3. an office
   4. a factory
   5. a workshop;
   6. a mine, quarry, or other places of exploitation of natural resources;
   7.  a construction or assembly site of more than six months duration.

(3) [Amended by MI Article 13(3)] [A permanent establishment shall not be deemed to exist if the taxpayer is not considered to have a permanent establishment if:

1. 1. use is made of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
   2. goods belonging to the company are stored solely for the purpose of storage, display, or delivery;
   3. goods owned by the business are stored solely for processing by another business;

1. 4. a fixed place of business is used solely for the purpose of purchasing goods or gathering information for the enterprise;
   5. a fixed place of business is used for the sole purpose of advertising, provision of information, scientific research or similar activities which are preparatory or auxiliary in character].

4. A person – other than an agent with independent status referred to in § 5 – who acting in a Contracting State on behalf of an enterprise of the other Contracting State shall be Contracting State shall be deemed to be a permanent establishment of the enterprise in the first-mentioned State if it has, and habitually exercises, in that State an authority to conclude contracts in the name of the enterprise, unless the activity of such person the activity of that person is limited to the purchase of goods or merchandise for that business.

5. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other intermediary of an independent status, provided that status, provided that such persons are acting in the ordinary course of their business. An intermediary who acts on behalf of an insurance company and who has powers which he habitually exercises, enabling him to conclude contracts in the name of that the intermediary is not required to be a member of a group of persons who are not members of the group.

6. The fact that an enterprise of a Contracting State controls or is controlled by an enterprise of the other Contracting State or an enterprise that carries on business in that other another State (whether through a permanent establishment or otherwise) shall not, of itself, be sufficient to is not in itself sufficient to make any of those enterprises a permanent establishment of the other.

 

III. – Taxation of income

Article 6

Income from real estate

(1). Income from immovable property may be taxed in the Contracting State in which such property is situated.

(2). The term “immovable property” shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall, in any case, include accessories, livestock, and equipment used in agriculture and forestry, rights to which the provisions of private law concerning land ownership apply, usufruct of real estate and rights to variable or fixed royalties for the operation or the exploitation or concession of the exploitation of mineral deposits, springs and other mineral deposits, springs and other resources of the earth; ships, boats and aircraft are not considered real property.

(3) The provision of § 1 applies to income from the direct exploitation or use, rental enjoyment, rental or leasing, or any other form of exploitation of real estate.

(4) The provisions of §§ 1 and 3 also apply to income from the real estate of an enterprise and to income from any other form of exploitation of real estate property of an enterprise as well as to income from real estate used for the exercise of a liberal profession.

 

Article 7

Profits of enterprises

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business in such a manner if the enterprise carries on business in such a manner, the profits of the enterprise may be taxed in the other State, but only to the extent that they are attributable to that permanent establishment.

(2) Without prejudice to the application of § 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged carrying on the same or similar activities under the same or similar conditions the taxpayer is entitled to the benefit of the taxpayer’s own income.

(3) In calculating the profits of a permanent establishment, the following shall be allowed as deductions expenses incurred for the purposes of the permanent establishment, including normal

(a) the taxpayer shall be entitled to deduct the expenses incurred for the purposes of the permanent establishment, including the normal executive and general administrative expenses so incurred,

(b) the cost of the services rendered by the permanent establishment, including the normal management and general administrative expenses so incurred, either in the State in which the permanent establishment is situated or elsewhere.

(4). In the absence of proper accounting or other evidence as to the amount of the profits of an enterprise of one of the Contracting States, the taxable income of an enterprise of one of the Contracting States which is attributable to its permanent establishment situated in the other State, the tax may be in particular be assessed in that other State in accordance with its own laws, taking into account the normal profits of similar enterprises of the same State carrying on the same business or the same or similar activities under the same or similar conditions. In the case referred to in the preceding paragraph, the profit attributable to the said permanent establishment may also be determined on the basis of the permanent establishment may also be determined on the basis of an apportionment of the total profits of the enterprise among its various parts, provided that the result so obtained is in accordance with the principles set forth in this Article. If the application of the provisions of this paragraph would result in double taxation of the same profits, the competent of the same profits, the competent authorities of both Contracting States shall consult together with a view to the taxable income of the taxpayer shall be taxed in the hands of the taxpayer;

 

No profit shall be attributed to a permanent establishment by reason of the fact that the permanent establishment has merely purchased goods or merchandise for the enterprise.

The taxpayer shall not be liable for any loss or damage arising out of or in connection with the operation of the permanent establishment.the same method each year, unless there are valid and sufficient reasons for proceeding otherwise. The taxpayer shall be entitled to the benefit of the taxpayer’s own income and the taxpayer shall be entitled to the benefit of the taxpayer’s own assets and liabilities. separately in other Articles of this Convention, the provisions of this Article shall not prevent the application of the provisions of such other Articles to the taxation of such items of income.

 

Article 8

Profits of Maritime, Inland Navigation, or Air Navigation Enterprises

By way of derogation from Article 7, §§ 1 to 6

profits from the operation of ships or aircraft in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated;

profits from the operation of inland waterway vessels may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

 

Article 9

Interdependent Enterprises

Where an enterprise of a Contracting State participates directly or indirectly in the management, control or financing of an enterprise of the other Contracting State, or the same persons participate directly or indirectly in the management, control or financing of an enterprise of a Contracting State and an enterprise of the other Contracting State, and Contracting State, and in either case the two enterprises are, in their commercial or financial relations, bound by

commercial or financial relations, are bound by terms and conditions agreed upon or imposed which are different from between independent enterprises, the profits which would, but for those conditions, have accrued to the conditions, would have been obtained by one of the enterprises, but could not in fact have been obtained conditions, may be included in the profits of that enterprise and taxed accordingly

Article 10

Dividends

1. Dividends paid by a company that is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

 

2. However, such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident and according to the rules of that State, but the tax so charged shall not so imposed shall not exceed :

(a) 10 percent of the gross amount of the dividends if the recipient of the dividends is a company (except for civil companies, general partnerships, limited partnerships and cooperative societies) whose direct held since the beginning of its financial year in the capital of the company (with the companies, general partnerships, limited partnerships, and cooperative societies) partnerships, limited partnerships and cooperative societies) allocating the dividends is at least 25 percent or has an acquisition price of at least 250 million francs;

(b) 15 percent of the gross amount of the dividends in all other cases. The provisions of paragraph 1, a) also apply if the dividends are allocated to several companies (except for the companies (with the exception of civil companies, general partnerships, limited partnerships and companies, general partnerships, limited partnerships and cooperative societies) whose held since the beginning of their respective fiscal years, in the capital of the company (with the exception of civil companies, general partnerships, limited partnerships and cooperative societies) allocating the dividends are of at least 25 percent or have an acquisition price of at least CHF 250 million and that one of the recipient companies owns more than 50 percent of the share capital of each of the other recipient companies.

This paragraph does not concern the taxation of the company’s profits which are used to pay

The term “dividends” is used in this section to refer to dividends paid by a corporation. the corporation shall not be liable for any loss or damage to the corporation’s assets or to the property of any other corporation from shares, stocks or profit-sharing certificates; founder’s shares or other profit shares, with the exception of debt claims, as well as income from other shares the same treatment as income from shares under the taxation laws of the State of which the distributing company is resident. This term also means:

(1) income, even if allocated as interest, taxable as income from capital invested by the shareholders in companies – other than companies – other than joint-stock companies – resident in Belgium;

2) shares in the profits of a Luxembourg enterprise received by the investor who is remunerated in proportion to the profits. The provisions of §§ 1 and 2 do not apply if the recipient of the dividends, a resident of dividends, a resident of a Contracting State, has in the other Contracting State of which the company which pays the dividends is a resident, has in the other Contracting State a permanent establishment to which the holding in respect of which the dividends are paid is effectively connected. In such case, the provisions of Article 7 shall apply; these provisions shall not prevent the levying of tax due at source on such dividends in accordance with the laws of that other State. Where a company which is a resident of a Contracting State derives profits or income of the other Contracting State, that other State may not impose any tax on dividends paid by that company to a resident of the first-mentioned State, nor any tax on account of company’s undistributed profits, even if the distributed dividends or the dividends distributed or the undistributed profits consist wholly or partly of profits or income arising in that other State; this provision shall not prevent that other State from taxing dividends in respect of an interest that is effectively connected with a permanent establishment carried on in that other State by a resident of the first-mentioned State.

 

Article 11

Interest

1. Interest arising in a Contracting State and accruing to a resident of the other Contracting State may be taxed in that other State.

(2) However, such interest may be taxed in the Contracting State in which it arises and according to the laws of that State, but the tax so charged shall be borne by the resident of that State. However, such interest may be taxed in the Contracting State in which it arises and according to the laws of that State, but the tax so charged shall not exceed 15 percent of the amount thereof.

(3) By way of derogation from § 2, interest may not be taxed in the Contracting State in which it arises if it is attributed to an enterprise of the other Contracting State. The preceding paragraph shall not apply in the case of a company:

(a) interest on bonds and other debt instruments, with the exception of bills of exchange representing commercial claims;

(b) interests attributed by a company resident in a Contracting State to a company resident in the other Contracting State which holds directly or indirectly at least 25 percent of the voting shares of the first-mentioned company.

(4) The term “interest” as used in this Article means, subject to paragraph 2 hereof, income from debt-claims of the other Contracting State. 2 below, means income from debt obligations of any kind, whether or not secured by mortgage or guarantees or a profit-sharing clause, and in particular income from deposits, public funds, bonds, including premiums and prizes attached to such securities premiums and prizes attached to such securities, and all other income subject to the same regime as income from loans or deposits, by the tax laws of the State in which the income arises. This term does not include income considered as dividends under Article 10, § 3, paragraph 2.

(5) The provisions of §§ 1 to 3 shall not apply where the recipient of the interested resident of a Contracting State, has in the other Contracting State in which the interest arises a permanent establishment to which the debt-claim giving rise to the interest is effectively connected. In such a case, the provisions of Article 7 shall apply; these provisions shall not prevent the levying of taxes due to not the collection of taxes due at source on such interest in accordance with the laws of that the legislation of that other Contracting State.

(6) Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. However, where the payer of the interest, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment in respect of which the loan in respect of which the interest is paid was made and which attributes the creditor, such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

(7) If, by reason of a special relationship between the debtor and the creditor or between the debtor and the creditor, the amount of the interest, having regard to the debt-claim for which it is paid, shall be the debtor and the creditor, or with third parties, the amount of interest, taking into account the claim for which it is the debtor and the creditor would have agreed in the absence of such a relationship, the rate limitation and 2 and 3 apply only to the latter amount. The excess part of the interest may be taxed in accordance with the laws of the Contracting State from which the interest arises.

 

Article 12

Royalties

1. Royalties arising in a Contracting State and accruing to a resident of the other Contracting State shall be taxable only in that other State.

2. The term “royalties” as used in this Article means payments of any kind for the use or enjoyment remuneration of any kind paid for the use of, or the right to use, any copyright in a work of art a literary, artistic or scientific work, including cinematograph films or tapes for radio or television broadcasting, a patent, a trademark, a design, a design trademark, design or model, secret plan, formula or process, or any other secret formula or process, as well as for the use of or the right to use industrial, commercial or scientific equipment not constituting immovable property referred to in section 6 and for information relating to the experience acquired in the information relating to experience gained in the industrial, commercial or scientific field.

(3) The provision of § 1 shall not apply where the recipient of the royalties, being a resident of a Contracting State, has in the other Contracting State in which the royalties arise a permanent establishment to which the right or property in respect of which the royalties are paid is effectively connected of the royalties. In such a case, the provisions of Article 7 shall apply.

(4) Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a debtor is that State itself, a political subdivision, a local authority or a resident of that State. However, where the payer of the royalties, whether or not a resident of a Contracting State has in a Contracting State a permanent establishment in respect for which the contract giving rise to the payment of the royalties was made and which allocates directly to the recipient, the royalties shall be deemed to arise in the Contracting State in which the taxpayer is entitled to the benefit of the taxpayer’s income; 

(5) If, by reason of a special relationship between the debtor and the creditor or between the debtor and the creditor, the amount of the royalties, having regard to the service for which they are paid, shall be deemed to arise in the Contracting State in which the permanent establishment is situated the performance for which they are attributed, exceeds the normal amount which the debtor and the creditor would have agreed in the absence of such a relationship, the 1 applies only to the latter amount. In this case, the excess part of the  royalties shall be taxable, in accordance with its law, in the Contracting State in which the royalties arise.

(6) Where in the case referred to in § 5, the payer is an enterprise which is in fact dependent on or under the control of the taxpayer, the taxpayer shall be taxed in the Contracting State in which the royalties arise under the dependence or control of the enterprise receiving the royalties or vice versa, or vice versa, or where both enterprises are in fact dependent on or under the control of a third enterprise or of legally separate enterprises, but belonging to the same group, the normal amount of royalties may be determined by taking into account the cost taking into account the cost, plus a normal profit, of acquiring, improving and retention of the rights, property or information giving rise to the royalties, where that where such normal amount cannot be assessed by other more appropriate criteria, in particular by criteria, in particular by comparison with the royalties freely fixed for similar services between genuinely independent enterprises.

 

Article 13

Capital gains

1. Gains from the alienation of immovable property, as defined in Article 6, § 2, may be taxed in Article 6, § 2, may be taxed in the Contracting State in which such property is situated.

 

2.  Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other State Contracting State, or movable property pertaining to a fixed base available to a resident of a Contracting State for the purpose of performing professional services, including such gains from  including such gains from the aggregate disposition of such permanent establishment (alone or together with the permanent establishment (alone or with the whole enterprise) or fixed base, may be taxed in that other State. in that other State. The rules of Article 7, §§ 2 and 3, shall apply to the determination of The rules of Article 7, §§ 2 and 3, apply to the determination of the amount of such gains. However, gains from the alienation of movable property, referred to in Article 22, § 3, shall be taxable only in the Contracting State in which the property itself is taxable under that Article 22, § 3, shall be taxable only in the Contracting State in which such property is taxable under that Article.

 

3. Gains from the alienation of any other property shall be taxable only in the Contracting State of which the alienator is a resident. This rule shall apply, in particular, to gains from the alienation of interest, not forming part of the business property of a permanent establishment referred to in § 2, paragraph 1, in an enterprise operated by a joint-stock company or by another capital company.

 

Article 14

Liberal professions

1. Income derived by a resident of a Contracting State from professional services or other independent activities of a similar character shall be taxable only in that State unless the unless that resident has a fixed base regularly available to him in the other State for the purpose of performing his fixed base for the purpose of performing his activities. If he has such a base, the income may be taxable in the other State, but only to the extent that it is attributable to activities

 

(2) The term “professional services” includes in particular independent scientific, literary of a scientific, literary, artistic, educational or pedagogical nature, as well as the independent activities of doctors, lawyers, engineers, architects, dentists, and accountants.

 

Article 15

Dependent professions

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of a professional activity shall be treated as if they had been paid to the resident of that State. similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is exercised in that State, remuneration received in respect thereof may be taxed in that other State. If the employment is exercised in that State, remuneration received in respect thereof may be taxed in that other State.

 

2. Notwithstanding the provisions of §1, remuneration derived by a resident of a Contracting State in respect of an employment State shall be taxable only in the first-mentioned State in respect of remuneration derived from employment shall be taxable only in the first-mentioned State if:

(a) the beneficiary stays in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period beginning or ending in the calendar year concerned, and

(b) the remuneration is paid by or on behalf of an employer who is not a resident of the other State, and

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

 

3 By way of derogation from §§ 1 and 2 and subject to the reservation mentioned in § 1, remuneration in respect of an employment exercised on board a ship, aircraft, or a rail or road vehicle operated in international or road vehicle operating in international traffic, or onboard a vessel used for inland navigation in international inland navigation in international traffic, shall be considered as relating to an activity carried on in the Contracting State in which the place of effective management of the enterprise is situated and may be taxed in that State.

Article 16

Directors of companies

1. Directors’ fees and other similar payments derived by a resident of a State receives in his capacity as a member of the board of directors or a supervisory board or a similar board of directors or a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State. The foregoing provision shall also apply to remuneration received in respect of functions which, under the laws of the Contracting State of which the company is a resident, are treated as functions of a similar nature to those performed by a person referred  the company is a resident of the Contracting State of which the company is a resident; or

 

2. remuneration derived by a person referred to in § 1 from a company which is a resident of a Contracting State in respect of the performance of the day-to-day activity of a managerial, technical, commercial or financial nature may be taxed in accordance with the provisions of Article 15 as if it were remuneration derived by an employee of an employee and as if the employer were the company. This provision shall also apply to remuneration derived by a resident of Luxembourg from his daily from his day-to-day activity as a partner in a company, other than a société par actions, which other than a société par action, which is a resident of Belgium.

 

Article 17

Artists and sportsmen

1st. Notwithstanding the provisions of Articles 7, 14 and 15, income derived by a resident of a Contracting State from his personal activities as an entertainer, such as a sportsman or sportswoman, exercised in the other Contracting as an entertainer, such as a theater, motion picture, radio or television artiste, or a musician, or as an athlete, may be taxed in that other State.

2nd. Where income from activities which an entertainer or sportsman performs personally and in that capacity is income from activities which an entertainer or sportsman exercises personally and in that capacity is attributed not to the entertainer or sportsman himself but to another person, such income may be taxed, notwithstanding the provisions of Articles 7, 14 and 15, in the Contracting State in which the activities of the artist or athlete are carried on.

 

Article 18

Pensions

1. Subject to the provisions of Article 19, pensions and other similar remuneration paid to a remuneration paid to a resident of a Contracting State in respect of past employment shall be taxable only in that State.

2.  Pensions and other allowances, whether periodic or not, paid in pursuance of the social legislation of a Contracting State by that State, by a political subdivision or local authority thereof, or by a political subdivision or local authority thereof or by a legal person governed by its public law the amount of the taxable income of the State in which the taxable income is paid; and

3 The taxable income of a person who is not a national of a Contracting State and who is not a national of a Contracting State may be taxed in that State, provided that the taxable income of that person is not from Luxembourg and paid to a resident of Belgium are not taxable in Belgium if such payments are derived from contributions, allowances or insurance premiums paid to a supplementary pension scheme by or on behalf of the beneficiary, or on his behalf, or contributions made by the employer to an internal plan, and if contributions, allowances, insurance premiums or endowments have been effectively taxed in Luxembourg.

 

(4) Notwithstanding the provisions of § 1, capital and surrender values in lieu of pensions paid under pensions paid to a resident of Luxembourg in respect of previous employment which from Belgium are taxable in Belgium.

 

Article 19

Remuneration and public pensions

1. Remuneration, including pensions, paid by a Contracting State or by one of its political subdivisions or local authorities, either directly or indirectly, to a resident of a Contracting State, or to a resident of a Contracting State or of a political subdivision or local authority thereof, may be taxed in Belgium political subdivisions or local authorities thereof, either directly or out of funds or out of funds constituted by them, in respect of services rendered to that State or political subdivisions or local authorities thereof, may be taxed in that State. This provision shall not apply if the recipient of such income is a national of the other State without nationality of the other State without at the same time possessing the nationality of the First State.

 

2. §1 shall not apply to remuneration or pensions paid in respect of services rendered in connection with a commercial or industrial activity carried on by one of the States or by one of its political subdivisions or local authorities.

 

Article 20

Teachers and students, apprentices or trainees

1. The remuneration of teachers and other members of the teaching staff who are residents of a contracting State and who are temporarily present in the other Contracting State for the purpose of teaching or scientific research, for a period not exceeding two years, at a university or other institution of scientific officially recognized institution of learning or scientific research shall be taxable only in the first-mentioned the amount of the salary or wages paid to the employee by the employer; or

 

2. amounts paid by a student, apprentice or trainee who is, or was formerly a resident of a Contracting State and who is present in the other Contracting State solely for the purpose for the sole purpose of furthering his education or training, shall be paid to him to defray the expenses of his maintenance, education or training shall not be taxable in that other State, provided that it is derived from sources outside that other State.

 

Article 21

Income Not Specifically Mentioned

A resident of a Contracting State shall not be taxable in the other Contracting State on not expressly mentioned in the foregoing Articles if, under the law of the first-mentioned preceding Articles if, under the law of the first-mentioned State, he may be taxed therein on such items of income.

 

Article 22

Taxation of Capital

1. Capital consisting of immovable property, as defined in Article 6, § 2, shall be taxable in the Contracting State in which such property is situated.

 

2.  Subject to the provisions of § 3, capital represented by movable property forming part of the assets of a forming part of the business property of a permanent establishment of an enterprise or by movable property constituting a fixed base used for the performance of professional services may be taxed in the taxable income of a person who is a member of a group of persons who are members of a group of persons who are not members of a group of persons. the taxable income of a person who is a member of a group of persons who are members of a group of persons who ships and aircraft operated in international traffic and vessels used for inland navigation, as well as movable property pertaining to their operation, shall be taxable the Contracting State in which the place of effective management of the enterprise is situated.

 

3.  All other elements of the capital of a resident of a Contracting State shall be taxable only in that State.

 

4. This rule applies in particular to an interest not forming part of the assets of a permanent establishment referred to in § 2, in an enterprise carried on by a company or by another capital company.

 

Article 23

Provisions for the prevention of double taxation

1. As regards residents of Luxembourg, double taxation shall be avoided in the following manner as follows:

income from Belgium – excluding income referred to in Article 2 below – and items of capital situated in Belgium which are taxable in that State by virtue of the preceding Articles, are exempt from Luxembourg tax. This exemption shall not limit the right of Luxembourg to take into account, in determining the rate of its taxes, of the income and elements of capital so exempted. If, in the event that the provisions of Luxembourg law are amended in such a way as to allow of the taxpayer, the taxpayer shall take into account the income and capital so exempted in determining the rate of tax. permanent establishment situated in a State with which Luxembourg has concluded a double tax treaty, the double tax treaty, the offset against the net taxable income of the same year of taxable income of the same tax year and the deduction from the total net income of subsequent tax years, losses incurred by a Luxembourg enterprise in a permanent establishment located in Belgium will, for the taxation of that enterprise, effectively deducted from its taxable income the exemption provided for in the preceding paragraph shall not apply in Luxembourg to Luxembourg to the profits of other taxable periods which are attributable to that establishment, to the extent that such profits have also been exempted from tax in Belgium by reason of their set-off against the said losses;

the tax levied in Belgium in accordance with this Convention:

(a) on dividends subject to the regime provided for in Article 10, § 2, excluding income from capital invested in general partnerships and limited partnerships, resident in Belgium, and

b) on interest subject to the regime provided for in Article 11, § 2, is deducted from the tax income which is levied in Luxembourg. The amount thus deducted may not, however, exceed either the fraction of the tax which corresponds proportionally to the said income received from Belgium nor an amount corresponding to the tax levied at source in Luxembourg on similar income attributed to Belgian residents. The said tax levied in deductible from the income taxable in Luxembourg only to the extent that it exceeds the tax deducted at source in Luxembourg on similar income attributed to Belgian residents; by way of derogation from 2, a, dividends and liquidation distributions which are subject to the regime provided for in 1, paragraph 1, are liquidation distributions distributed by a Belgian resident joint-stock company, resident in Belgium, which have been subject to the regime provided for in Article 10, § 2 and which collected by a capital company, resident in Luxembourg, whose direct participation, held since the direct participation, held since the beginning of its fiscal year in the capital of the company granting the dividends, is at least 25 percent or has an acquisition price of at least CHF 250 million. In this case, the tax deducted at source in Belgium is neither deductible from the exempted income in Luxembourg nor can it be deductible from the Luxembourg tax. The above-mentioned shares or units of a Belgian resident company are, under the same conditions, also subject to the regime provided for in the first paragraph of Article 1. The provisions of the two preceding paragraphs also apply when the combined holdings of several capital companies resident in Luxembourg reach 25 percent of the total value of their Luxembourg, reach at least 25 percent of the share capital of the société par actions, resident in Belgium, or have an acquisition price of at least 250 million francs,and that one of the Luxembourg resident joint-stock companies owns more than 50 percent of the share capital of each of the other capital companies, the amount of the capital of the company is not less than.

 

(2) As regards residents of Belgium, double taxation is avoided in the the following manner:

Income arising in Luxembourg, – excluding income referred to in 2 and 3 – and items of capital situated in Luxembourg, which may be taxed in that State by virtue of the preceding articles, are exempt from tax in Belgium. This exemption shall not limit the right of Belgium to take into account, in determining the rate of the determination of the rate of its tax, of the income and capital so exempted;

 with respect to dividends subject to the regime provided for in Article 10, § 2, interest subject to the regime provided for in Article 11, §§ 2 or 7 and the excess part of royalties referred to in Article 12, § 5, the portion of the foreign tax provided for by the Belgian legislation shall be deducted under the conditions and at the rate provided for by that legislation, either on the personal income tax relating to the said dividends – excluding liquidation to the personal income tax relating to the said dividends – excluding liquidation distributions -or on the corporate income tax relating to the said interest and excess royalties which are taxable in taxable in Luxembourg in accordance with the laws of that State and with Article 11, §§ 2 and 3 of the Article 11, §§ 2 or 7 and Article 12, §5;

where a company resident in Belgium owns shares or units in a capital company resident in Luxembourg, the dividends – including liquidation distributions – which company, resident in Luxembourg, the dividends – including liquidation distributions – attributed to it by the latter company and which have been subject to the regime provided for in Article 10, § 2, are exempt from the tax on dividends in Belgium, to the extent that such exemption would be granted if both companies were resident in Belgium. This provision does not exclude the deduction of withholding tax on these dividends, which is payable under Belgian law; where a Belgian resident company has had throughout the financial year of a capital company resident in Luxembourg and subject in that State to corporate income tax, sole ownership of shares or units in the latter company, it may also be company, it may also be exempted from the withholding tax on income from movable property payable, according to Belgian law, on the dividends of these shares or units on the condition

the condition that it applies for this in writing at the latest within the period prescribed for its annual declaration; when redistributing these exempted dividends to its own shareholders, the of such exempted dividends to its own shareholders, these dividends may not, in this case, be deducted from the distributed dividends subject to withholding tax. This provision is not applicable where the first company has opted to have its profits subject to personal income to personal income tax. In the event that the provisions of Belgian law exempting the net amount of dividends that a Belgian resident company receives from another Belgian resident company, were to be amended so as to limit the exemption to dividends relating to holdings of a specified size in the of the second company, the provision of the preceding paragraph will apply only to dividends the provision of the preceding paragraph will only apply to dividends attributed by companies resident in companies resident in Luxembourg and relating to holdings of the same size in the capital of the said companies;

where, in accordance with Belgian law, losses incurred by a Belgian enterprise in a permanent establishment situated in Luxembourg have been effectively deducted from the profits of that enterprise for the purposes of its taxation in Belgium, the exemption provided for in 1. the exemption provided for in 1 shall not apply to profits of other taxable periods which are the profits of other taxable periods attributable to that establishment, to the extent that such profits have also been exempted from tax in Luxembourg by virtue of being set off against the said losses.

 

– Special provisions

Article 24

Non-discrimination

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than that to which nationals of that other State in the same circumstances are or may be subject. in the same situation.

(2) The term “nationals” means

(1) all individuals who possess the nationality of a Contracting State;

(2) all companies formed in accordance with the laws in force in a Contracting State.

(3) Stateless persons shall not be subjected in a Contracting State to any taxation or any requirement connected therewith which is obligation that is different from or more burdensome than that to which nationals of that State are or may be nationals of that State who are in the same situation.

4. An individual who is a resident of Belgium and who, in accordance with Articles 7 and 14 to 19, is taxable in Luxembourg on more than 50 percent of his professional income, is, at his request income, is, at his request, taxed in Luxembourg with respect to his income taxable there in income taxable therein in accordance with Articles 6, 7 and 13 to 19 of the Convention, at the average rate of tax which, having regard to his situation and family responsibilities and the total of his income generally whatever, would be applicable to him if he were a resident of Luxembourg.

5. Individuals who are residents of Luxembourg and who, in accordance with the provisions of the provisions of Chapter III (Taxation of income), are taxable in Belgium, are not subject to any are not subject in Belgium to any taxation or obligation in respect of such income which is more burdensome than those to which individuals who are or may be subject to individuals who are residents of Belgium who are otherwise in the same situation. The personal deductions, allowances and tax reductions based on the situation or family responsibilities that Belgium grants to its own residents are granted to Luxembourg residents in proportion to the income from Belgium in proportion to the total income, wherever it comes from, of which these persons are the beneficiaries.

6. The taxation of a permanent establishment which an enterprise of a Contracting State has in the State shall not be less favorably assessed in that other State than the taxation of less favorable than the taxation of enterprises of that other State carrying on the same activity.

7. The taxation of an agricultural or forestry business carried on by a resident of a Contracting State in the other State shall not be less favorable than the taxation of businesses of that other State carrying on the same activity. Contracting State shall not be less favorably assessed in that other State than the taxation of less favorable than the taxation of residents of that other State carrying on the same activity. a company of a Contracting State, the capital of which is wholly or partly, directly or indirectly, owned or controlled by one or more residents of the other Contract The other Contracting State shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith other or more burdensome than that to which The term “taxation” means any tax or duty imposed on a taxpayer in the first-mentioned Contracting State by a taxpayer who is a resident of the first-mentioned Contracting State. The term “taxation” in this Article means taxes of every kind and description.

 

Article 25

Mutual agreement procedure

1. [Paragraph 1 of Article 25 of this Convention is replaced by paragraph 1 of Article 16 of the IM] [Where a resident of a Contracting State believes that the actions of one or both of the Contracting States result or will result in double taxation not in accordance with this Convention, it may, without prejudice to the remedies provided by provided for in the domestic laws of those States, it may address to the competent authority of the Contracting State of which he is a resident a request in writing to the competent authority of the Contracting State of which he is a resident for the revision of such taxation. To be admissible, such application must be made within two years from the notification or collection at source of the second taxation].

(2) The competent authority referred to in § 1 shall endeavor, if the complaint appears to it to be well-founded and if it is not itself able to provide a satisfactory solution, to settle the matter by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of double taxation not in accordance with the Convention. The agreement shall be applied irrespective of the time limits provided by the domestic law of the States.

(3) The competent authorities of the Contracting States shall endeavor, by mutual agreement, to resolve any difficulties or doubts to which the application of the Convention may give rise.

(4) The competent authorities of the Contracting States may communicate directly with each other with a view to reaching an agreement as described in the preceding paragraphs.

 

Article 26

Exchange of information

The competent authorities of the Contracting States shall exchange such information as is relevant to the application of the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description taxes of every kind and description imposed by or on behalf of the Contracting States to the States insofar as the taxation thereunder is not contrary to the

Convention. The exchange of information is not restricted by Articles 1 and 2. Information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of the assessment or collection of the taxes referred to in paragraph 1, in proceedings or proceedings or prosecutions in respect of such taxes, or in the determination of appeals in relation to such taxes, or in the enforcement of any of the foregoing. Such persons or authorities shall use such information only for such purposes. They may disclose such information in public court hearings or in judgments. Notwithstanding the foregoing information received by a Contracting State may be used for other purposes where such possibility results from the laws of both States and where the competent authority of the State providing the information authorizes such use.

 In no case shall the provisions of paragraphs 1 and 2 be construed to require a Contracting State

(a) to carry out administrative measures at variance with its own laws and administrative practice or those of the other Contracting State

(b) to supply information that is not obtainable under the laws or normal administrative practice of that or of the other Contracting State

(c) to supply information that would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

 

If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its available powers to obtain the requested information, even if it does not need the information for its own tax purposes. The obligation in the preceding sentence is subject to the limitations of paragraph 3 unless such limitations would prevent a Contracting State from providing information solely because it is not relevant to that State for its own tax purposes. interest in it in the domestic context.

In no case shall the provisions of paragraph 3 be construed as permitting a Contracting State to refuse to permit a Contracting State to refuse to supply the information requested by the other requested by the other Contracting State solely because the information is held by a bank, other financial institution, trust, foundation, nominee or person acting in an agency or fiduciary capacity, or because such information relates to the ownership rights of a person.

 

Section 27

Miscellaneous

1. The provisions of the Convention shall not affect the tax privileges enjoyed by members of diplomatic missions and members of diplomatic missions and consular posts by virtue of either the general rules of international law or the provisions of either by virtue of the general rules of international law or by virtue of the provisions of special agreements.

2.  For the purposes of the Convention, members of a diplomatic mission or consular post of a of a Contracting State accredited to the other Contracting State or to a third State who are the third State, who are nationals of the sending State, shall be deemed to be residents of that State if they are subject to the State if they are liable therein to the same obligations in relation to taxes on income and on capital as are The Convention shall not apply to third parties who are nationals of the sending State.

(3) The Convention shall not apply to international organizations, to organs or officials thereof, or to persons who their officials, or to persons who are members of a diplomatic mission or consular post-mission or consular post of a third State, when they are in the territory of a Contracting State and are not treated as residents in either Contracting State for the purposes of the person is a resident of a Contracting State and is not treated as a resident of either Contracting State in relation to taxes on income and on capital.

4. The competent authorities of the Contracting States shall consult together concerning the administrative measures necessary to carry out the provisions of the Convention and, in particular, on the competent authorities of the Contracting States shall consult together concerning the administrative measures necessary to carry out the provisions of the Convention and in particular concerning the evidence to be furnished by residents of each State in order to benefit in the other State from the exemptions from taxation on income and capital to benefit in the other State from the exemptions or reductions of tax provided for in this Convention.

(5) The Ministers of the two contracting States who have direct taxation within their competence or their delegates shall communicate directly with each other for the purpose of applying of the Convention.

VII. – Final provisions

Article 28

Entry into force and termination of previous agreements

 

1. This Convention shall be ratified and the instruments of ratification shall be exchanged as soon as possible in Brussels.

 

(2) It shall enter into force on the fifteenth day following that of the exchange of the instruments of ratification and shall ratification and it shall apply:

1° in Belgium:

(a) to taxes due at source on income normally attributed or paid as from the first day of January of the year in which the instruments of ratification have been exchanged;

(b) other taxes imposed on income for taxable periods ending on or after the thirty-first day of December in the year in which the instruments of ratification have been exchanged;

2° in Luxembourg:

(a) to taxes due at source on income attributed to beneficiaries as from January 1 of the year in which the instruments of ratification have been exchanged;

(b) other taxes relating to the taxable year bearing the year in which the instruments of ratification are exchanged and to any subsequent taxable year.

 

3. The Convention between Belgium and the Grand Duchy of Luxembourg for the Avoidance of Double Taxation in respect of direct taxes and to ensure mutual assistance in of the two countries for the collection of these taxes was signed in Brussels on March 9, 1931, amended by the additional protocol of 7 February 1952 and by exchanges of letters of March 9 and 11, 1965 and of November 16 and December 14, 1965, as well as the provisions for the implementation of this Convention which are the subject of the arrangements of 22 July 1938, 25 March 1948, and 28 December 1949, shall terminate and cease to apply to and Luxembourg taxes referred to in Article 2, § 3, of this Convention, relating to Convention, relating to income and elements of capital to which this Convention is applicable 2, 1° and 2° of this Article.\\

 

Article 29

Denunciation

This Convention shall remain in force indefinitely, but each of the Contracting States may, on or before June 30 in any calendar year beginning with the fifth year after the year of ratification, denounce it in writing through diplomatic channels to the other contracting State. In the event of denunciation before July 1 of any such year, the Convention shall apply for the last time:

 

1° in Belgium:

(a) to taxes due at source on income normally attributed or paid on or before December 31 of that year;

(b) other taxes assessed on income for taxable periods normally ending no later than December 30 of the year following the year of termination;

2° in Luxembourg:

(a) to taxes due at source on income allocated to beneficiaries on or before 31 December of that year;

b) other taxes relating to the tax year bearing the year of the termination denunciation.