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TMI BlogAgreement between the Government of the Republic of India and the Government of the Republic of India and the Government of the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxesX X X X Extracts X X X X X X X X Extracts X X X X ..... t shall be given effect to in the Union of India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE KINGDOM OF BELGIUM FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME THE GOVERNMENT OF THE REPUBLIC OF INDIAL: and THE GOVERNMENT OF THE KINGDOM OF BELGIUM : Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows : CHAPTER I SCOPE OF THE AGREEMENT ARTICLE 1 PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of the Contracting States. ARTICLE 2 TAXES COVERED 1. This Agreement shall apply to all taxes imposed on total income or on elements of income including taxes on gains from the sale, exchange or transfer of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises. The term "taxes" shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which the Agreement applies or which represents a penalty imposed relating to those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lgium, the Minister of Finance or his authorised representative; (e) the term "tax" means Indian tax or Belgian tax as the context requires (f) the term "person" includes an individual, a company and any other entity which is treated, as a taxable unit under the tax laws in force in the Contracting State of which it is a resident; (g) the term "company" means in the case of India any entity which is a company or which is treated as a company under the Indian tax law, and in the case of Belgium any entity which is a company or which is treated as a body corporate under the Belgian tax law; (h) 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; (i) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (j) the term "national" means : (i) any individual possessing the nationality of a Contracting State; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop or a warehouse; (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; (g) an installation or structure, used for the exploration or exploitation of natural resources; (h) the provision of services or facilities in connection with or supply of plant and machinery on hire used or to be used in, the prospecting for, or extraction or production of mineral oils; (i) a premises used as a sales outlet or for receiving or soliciting orders; (j) a building site or construction, installation or assembly project or supervisory activities in connection therewith, where such site, project or activities (together with other such sites, projects or activities, if any) continue for a period of more than six months, or where such project or supervisory activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six months and the charges payable for the project or supervisory activity exceed 10 per cent of the sale price of the machinery and equipment. 3. The term "permanent establishment" shall not be deemed to inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through a permanent establishment or otherwise) shall not of itself constitute either company a permanent establishment of the other. CHAPTER III TAXATION OF INCOME ARTICLE 6 INCOME FROM IMMOVABLE PROPERTY 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 property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits sources and other natural resources. Ships and aircraft shall not be regarded as immovable property. 3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t authority of the other Contracting State so requests, the provisions of this sub-paragraph shall be amended by protocol to reflect such terms. (b) However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a bankin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r aircraft on charter fully equipped, manned and supplied, or on a bare boat charter basis where the leasing is incidental to any activity directly connected with such transportation; (c) income derived from the operation of ships in international traffic, includes income derived from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) in connection with the transportation of goods or merchandise in international traffic, where the income is derived from an activity which is incidental to any activity directly connected with such transportation. 3. The provisions of this Article shall also apply to income from the participation in a pool, a joint business or an international operating agency. ARTICLE 9 ASSOCIATED ENTERPRISES Where (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other State may not impose any tax on the dividend paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the companies undistributed profits to a tax on the companies undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. ARTICLE 11 INTEREST 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State the tax so charged shall not exceed : (a) 10 per cent of the gross amount of the interest, if such interest is paid on any loan of whatever kind granted by a bank; and (b) 15 per cent of the gross amount of the interest in all other cases. 3. The term interest as used in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a resident of the other Contracting State may be taxed in that other State. 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 20 per cent. of the gross amount of the royalties or fees for technical services. 3. (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, or films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience (b) The term fees for technical services as used in this Article means payments of any kind to any person, other than payments to an employee of the person making the payments and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State. 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 Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other State. 3. Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident. 4. Gains from the alienation of shares of the capital stock of a company, the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 5. Gains from the alienation of shares oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year or taxable period, as the case may be; (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 deductible in computing the profits or income of a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State. ARTICLE 16 DIRECTORS FEES 1. Directors fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the 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. This provision shall also apply to payments derived in respect of the discharge of functions which under the laws of the Contracting State of which the company is a resident are treated as functions analogous to those stated hereinbefore. 2. Remuneration derived by a director referred to in paragraph 1 from the company in regard to the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a resident of a Contracting State from sources within the other Contracting State shall be taxable only in the first-mentioned Contracting State. 2. Notwithstanding the provisions of paragraph 1, pensions paid and other payments made under a public scheme which is part of the social security system of a Contracting State or a political sub-division or a local authority thereof shall be taxable only in that State. 3. The term pension means a periodic payment made in consideration of past services, or by way of compensation for injuries received in the course of performance of services. 4. The term annuity means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or moneys worth. ARTICLE 19 REMUNERATION AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE 1. (a) Remuneration, other than a pension, paid by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. (b) However, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess apprentice, or (c) for the purpose of study or research, as a recipient of a grant, allowance or award, from a governmental, religious, charitable, scientific or educational organisation, shall be exempt from tax in that other Contracting State : (i) on all remittances from abroad for the purposes of maintenance, education or training; (ii) on the grant, allowance or award; and (iii) in respect of the amount, representing remuneration for an employment in that other Contracting State, if such remuneration does not exceed 100,000 Belgian Francs or its equivalent in Indian Rupees, as the case may be, in any year. 2. An individual who is a resident of a Contracting State and who visits the other Contracting State for a period not exceeding one year as an employee of, or under contract with, an enterprise of the first-mentioned Contracting State or an organisation referred to in paragraph 1 for the primary purpose of acquiring technical, professional or business experience from a person other than such enterprise or organisation shall be exempt from tax in that other Contracting State in respect of the remuneration received from that enterprise or organisation for such per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where a resident of India derives income which, in accordance with the provisions of the Agreement, shall be taxable only in Belgium, India may include this income in the tax base but shall allow as a deduction from the income-tax that part of the income-tax which is attributable to the income derived from Belgium. 3. In the case of Belgium, double taxation shall be avoided as follows : (a) Where a resident of Belgium derives income which may be taxed in India in accordance with the provisions of the Agreement, other than those of paragraph 2 of Article 10, of paragraphs 2 and 6 of Article 11 and of paragraphs 2 and 6 of Article 12, Belgium shall exempt such income from tax but may, in calculating the amount of tax on the remaining income of that resident, apply the rate of tax which would have been applicable if such income had not been exempted. (b) (i) Where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are dividends taxable in accordance with paragraph 2 of Article 10, and not exempt from Belgian tax according to sub-paragraph (c), interest taxable in accordance with paragraph 2 or 6 of Article 11, or royalties taxable in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of economic development of India, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character; the competent authorities may in such a case decide as to the period for which the benefit of this clause shall apply. CHAPTER V 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 the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be taxed. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. 2. Subject to the provisions of paragraph 3 of Article 7, the taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances or under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avoidance of taxation which is not in accordance with the Agreement : Provided that the case has been presented within the time period specified in paragraph 1, any agreement reached shall be implemented notwithstanding any time-limits in the domestic laws of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. 4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of the Agreement. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. ARTICLE 26 EXCHANGE OF INFORMATION 1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, insofar as the taxation thereunder is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracting State, the competent authority of the other Contracting State shall secure, in accordance with the legal provisions and regulations applicable to the notification and recovery of its taxes, the notification and the recovery of taxes referred to in paragraph 1 which are due in the first-mentioned State. Such taxes shall not be considered as preferential claims in the requested State and that State shall not be obliged to apply any means of enforcement which are not authorised by the legal provisions and regulations of the requesting State. 4. Questions concerning any period of limitation of a tax claim shall, notwithstanding the provisions of paragraph 3, be governed solely by the laws of the applicant State. 5. Requests referred to in paragraph 3 shall be supported by an official copy of the instrument permitting the execution, accompanied where appropriate, by an official copy of any final administrative or judicial decision. 6. With regard to taxes which are open to appeal, the competent authority of a Contracting State may, in order to safeguard its rights, request the competent authority of the other Contracting State to take the protective measures provided for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely. However, either of the Contracting State may, on or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State through diplomatic channels, written notice of termination and, in such event, the Agreement shall cease to have effect : (a) in India : in respect of income arising in any previous year beginning on or after the first day of April next following the calendar year in which the notice of termination is given; (b) in Belgium: (i) in respect of all tax due at source on income credited or payable on or after the first day of January of the calendar year next following the calendar year in which the notice of termination is given; (ii) in respect of all tax other than tax due at source on income derived during any taxable period ending on or after the thirty-first day of December of the calendar year next following the calendar year in which the notice of termination is given. IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed the present Agreement. DONE in duplicate at Brussels, this 26th day of April one thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. For the Government of the Repubic of India ARJUN K. SENGUPTA Ambassador For the Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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