Protocol - Protocol - Belgium

PROTOCOL The Government of the Republic of India and the Government of the Kingdom of Belgium, Having entered into an Agreement for the avoidance of double taxation and the prevention of fiscal with respect to taxes on income, Have agreed, at the time of signing the said Agreement, on the following provisions which shall constitute an integral part thereof : 1. Ad Articles 5, 7 and 12 If under any Convention or Agreement between India and a third State being a member of the OECD which enters into force after 1st January, 1990, India limits its taxation on royalties or fees for technical services to a rate lower or a scope more restricted than the rate or scope provided for in the present Agreement on the said items of income, the same rate or scope as provided for in that Convention or Agreement on the said items of income shall also apply under the present Agreement with effect from the date from which the present Agreement or the said Convention or Agreement is effective, whichever date is later. 2. Ad Article 7 (a) In the determination of the profits of a permanent establishment in Belgium of an enterprise which is a resident of India, Belgium shall allow as deductions, notwithstanding the provisions of the first sentence of sub-paragraph (a) of paragraph 3 of Article 7, executive and general administrative expenses incurred whether in Belgium or elsewhere insofar as they are reasonably allowable to that permanent establishment. (b) Where the law of the Contracting State in which a permanent establishment is situated imposes in accordance with the provisions of the first sentence of sub-paragraph (a) of paragraph 3 of Article 7, a restriction on the amount of the executive and general administrative expenses which may be allowed as deductions in determining the profits of such permanent establishment, it is understood that in determining the profits of such permanent establishment the deduction in respect of such executive and general administrative expenses in no case shall be less than what is allowable as on the date of signature of the present Agreement under the law of that Contracting State. 3. Ad Article 23 For the purposes of sub-paragraph (a) of paragraph 2 and sub-paragraph (b) of paragraph 3 of Article 23, it is understood that if, after the date of signature of the Agreement, the law of a Contracting State is amended with regard to the allowance of tax credit or the reduction of tax, the competent authority of that State shall inform the competent authority of the other Contracting State of the amendments so made and, if the competent authority of that other Contracting State so requests, the competent authorities of both States shall consult each other with a view to amend the Agreement, if necessary. IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed the present Protocol. DONE in duplicate at Brussels, this 26th day of April, one thousand nine hundred and ninety-three, in the Hindi, English, French and Dutch languages, all four texts being equally authentic. In case of divergence of interpretation, the English text shall prevail. 1 [ Whereas the Agreement between the Government of the Republic of India and the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income came into force on the 1st day of October, 1997, after the notification by both the Contracting States to each other of the completion of the procedures required under their laws for bringing into force the said agreement ; And whereas the Central Government in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), had directed that all the provisions of the said Agreement annexed to the notification of the Government of India in the Ministry of Finance. (Department of Revenue) (Foreign Tax Division) No. G. S. R. 632(E), dated the 31st October, 1997, shall be given effect to in the Union of India; And whereas paragraph 1 of the Protocol dated the 26th April, 1993, to the aforesaid agreement, provides that if after the 1st day of January, 1990, under any Convention or Agreement between India and a third State being a member of the Organisation for Economic Co-operation and Development, India should limit its taxation on royalties or fees for technical services to a rate lower or a scope more restricted than the rate or scope provided for in the present agreement on the said items of income, then, as from the date on which the Agreement between India and Belgium or the relevant Indian Convention or Agreement becomes effective ; whichever date is later, the same rate or scope as provided for in that Convention or Agreement on the said items of income shall also apply under this agreement ; And whereas in the Convention between India and Sweden which became effective on the 1st April, 1998, in the case of India, and on the 1st January, 1998, in the case of Sweden, which state is a member of the Organisation for Economic Co-operation and Development, the Government of India has limited the taxation at source on royalties and fees for technical services to a rate lower and a scope more restricted than that provided in the Agreement between India and Belgium on the said items of income ; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that the following modifications shall be made in the Agreement notified by the said notification which are necessary for implementing the aforesaid Agreement between India and Belgium, namely :--- I. With effect from the 1st April, 1998, in India and, with effect from the 1st January, 1998, in Belgium for the existing paragraph (2) of article 12 relating to royalties and fees for technical services , the following paragraph shall be substituted, namely : 2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties or fees for technical services is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent. of the gross amount of the royalties or fees for technical services. II. With effect from the 1st April, 1998, in India and with effect from the 1st January, 1998, in Belgium for the existing sub-paragraph ( a ) of paragraph 3 of article 12 relating to royalties and fees for technical services , the following sub-paragraph shall be substituted, namely : ( a ) The term royalties as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trade mark, design or model, plant, secret formula or process, or for information concerning industrial, commercial or scientific experience. . ] ************** NOTES:- 1 . Inserted vide Notification No. 54(E) dated 19-01-2001