Belgium

Double Taxation
Avoidance Agreement

Belgium

Income-tax Act, 1961:
Notification under section 90: Agreement between 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

Notification
No. G. S. R. No. 632(E), dated 31st October, 1997.

Whereas
the annexed 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 has come into
force on the 1st day of October, 1997, the thirtieth day after the receipt of
later of notifications by both the Contracting States to each other of the
completion of the procedures required for bringing into force of the said
Agreement in accordance with paragraph 1 of Article 29 of the said Agreement;

Now,
therefore, in exercise of the powers conferred under section 90 of the
Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that
all the provisions of the said Agreement 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 India 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 taxes.

2.     The existing taxes to
which the Agreement shall apply are:–

a.     In the case of India:

                     
i.       
the
income-tax including any surcharge thereon; and

                    
ii.       
the
surtax,

(hereinafter
referred to as “Indian tax”).

a.           
 

b.           
In
the case of Belgium:

                             
i.       

the
individual income-tax (l’impot des personnes physiques de personenbelasting);

                            
ii.       
the
corporate income-tax (l’impot des societes; de vennootschapsbelasting);

                           
iii.       
the
income-tax on legal entities (l’impot des personnes morales; de
rechtspersonenbelasting);

                           
iv.       

the
income tax on non-residents (l’impot des non-residents de belasting der
niet-verblijfhouders);

                            
v.       
the
special levy assimilated to the individual income-tax (la cotisation speciale
assimilee a l’impot des personnes physiques; de met de personenbelasting
gelijkgestelde bijzondere heffing),

including
the prepayments, the surcharges on these taxes and prepayments, and the
supplements to the individual income-tax,

(hereinafter
referred to as “Belgian tax”).

3.    
The
Agreement shall also apply to any identical or substantially similar tax which
is imposed after the date of signature of the Agreement in addition to, or in
place of, the existing taxes. The competent authorities of the Contracting
States shall, from time to time, notify to each other any significant changes
which have been made in their respective taxation laws.

CHAPTER
II

DEFINITIONS

Article
3

GENERAL
DEFINITIONS

1.            
In
this Agreement, unless the context otherwise requires:-

a.     the term ” India
” means the Territory of India and includes the territorial sea and
airspace above it, as well as any other maritime zone in which India has
sovereign rights, other rights and jurisdictions, according to the Indian law
and in accordance with international law

b.    the term

“Belgium” means the Kingdom of Belgium when used in a geographical
sense, it means the national territory, the territorial sea and any other area
in the sea within which Belgium, in accordance with international law,
exercises sovereign rights or its jurisdiction;

c.     the terms “a
Contracting State” and “the other Contracting State” mean India
or Belgium as the context requires;

d.    the term

“competent authority” means:–

                                             
i.         
in
the case of India, the Central Government in the Ministry of Finance
(Department of Revenue) or their authorised representative, and

                                            
ii.         
in
the case of Belgium, the Minister of Finance or his authorised representative;

a.      

b.      

c.      

d.      

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;

a.       

b.       

c.       

d.       

e.       

f.       

g.       

h.       

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.       
any
legal person, partnership and association deriving its status as such from the
laws in force in a Contracting State.

As
regards the application of the Agreement by a Contracting State, any term not
defined therein shall, unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the taxes to which the
Agreement applies.

Article
4

RESIDENT

1.     For the purposes of
this Agreement, the term “resident of a Contracting State” means any
person who, under the laws of that State, is a resident of that State for the
purposes of the taxes of that State to which the Agreement applies.

2.     2 Where by reason of
the provisions of paragraph 1 an individual is a resident of both Contracting
States, then his residential status for the purposes of the Agreement shall be
determined in accordance with the following rules:–

a. he shall be deemed to be a resident of
the Contracting State in which he has a permanent home available to him; if he
has a permanent home available to him in both Contracting States, he shall be
deemed to be a resident of the Contracting State with which his personal and
economic relations are closer (hereinafter referred to as his “centre of
vital interests”);

b.if the Contracting
State in which he has his centre of vital interests cannot be determined, or if
he has not a permanent home available to him in either Contracting State, he
shall be deemed to be a resident of the Contracting State in which he has an
habitual abode;

c. if he has an habitual abode in both
Contracting States or in neither of them, he shall be deemed to be a resident
of the Contracting State of which he is a national;

d.if he is a national
of both Contracting States or of neither of them, the competent authorities of
the Contracting States shall determine the question by mutual Agreement.

1.      

2.      

3.     Where by reason of
the provisions of paragraph 1, a person other than an individual is a resident
of both Contracting States, then it shall be deemed to be a resident of the
Contracting State in which its place of effective management is situated.

Article
5

PERMANENT
ESTABLISHMENT

1.      For the purposes of
this Agreement, the term “permanent establishment” means a fixed
place of business through which the business of an enterprise is wholly or
partly carried on.

2.      The term
“permanent establishment” includes especially:

a.     a 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 include:–

a.     the use of facilities
solely for the purpose of storage or display of goods or merchandise belonging
to the enterprise;

b.    the maintenance of a
stock of goods or merchandise belonging to the enterprise solely for the
purpose of storage or display;

c.     the maintenance of a
fixed place of business solely for the purpose of purchasing goods or
merchandise, or for collecting information, for the enterprise;

d.    the maintenance of a
fixed place of business solely for scientific research, for the enterprise.

4.            
Subject
to the provisions of paragraph 5, a person acting in a Contracting State on
behalf of an enterprise of the other Contracting State shall be deemed to have
a permanent establishment of that enterprise in the first-mentioned State if:–

a.     he has and habitually
exercises, in that State an authority to conclude contracts on behalf of the
enterprise, unless his activities are limited to the purchase of goods or
merchandise for that enterprise; or

b.    he habitually
maintains in the first-mentioned Contracting State a stock of goods or
merchandise belonging to the enterprise from which the person regularly
delivers goods or merchandise on behalf of the enterprise; or

c.     he habitually secures
orders in the first-mentioned Contracting State, exclusively or almost exclusively,
for the enterprise itself, or for the enterprise and other enterprises which
are controlled by it or have a controlling interest in it.

1.        

2.        

3.        

4.        

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 agent of an
independent status provided that such persons are acting in the ordinary course
of their business. However, when the activities of such an agent are devoted
wholly or almost wholly on behalf of that enterprise itself or on behalf of
that enterprise and other enterprises controlling, controlled by, or subject to
the same common control, as that enterprise, he will not be considered an agent
of an independent status within the meaning of this paragraph.

6.       The fact that a
company which is a resident of a Contracting State controls or is controlled by
a company which is a resident of the other Contracting State, or which carries
on business in that other Contracting State (whether 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 income from immovable property used for the performance
of professional services.

Article
7

BUSINESS
PROFITS

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 Contracting State through a
permanent establishment situated therein. If the enterprise carries on business
as aforesaid, the profits of the enterprise may be taxed in the other State but
only so much of them as is attributable to (a) that permanent establishment;
(b) sales in that other State of goods or merchandise of the same or similar
kind as those sold through that permanent establishment; or (c) other business
activities carried on in that other State of the same or similar kind as those
effected through that permanent establishment.

2.     Where an enterprise
of a Contracting State carries on business in the other Contracting State
through a permanent establishment situated therein, there shall be attributed
to such permanent establishment the profits which it might be expected to
derive if it were an independent enterprise engaged in the same or similar
activities under the same or similar conditions and dealing at arm’s length
with the enterprise of which it is a permanent establishment.

3.      

a.     In the determination
of the profits of a permanent establishment, there shall be allowed as
deductions expenses which are incurred for the purposes of the business of the
permanent establishment including executive and general administrative expenses
so incurred, whether in the State in which the permanent establishment is
situated or elsewhere, subject to the limitations of the taxation laws of that
State:

Provided
that where the law of the State in which the permanent establishment is
situated imposes a restriction on the amount of the executive and general
administrative expenses which may be allowed, and that restriction is relaxed
or overridden by any Convention or Agreement between that State and a third
State which is a member of the OECD which enters into force after the date of
entry into force of this Agreement, the competent authority of that State shall
notify the competent authority of the other Contracting State of the terms of
the corresponding paragraph in the Convention or Agreement with that third
State immediately after the entry into force of that Convention or Agreement
and, if the competent 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 banking enterprise, by way of interest on moneys lent
to the head office of the enterprise or any of its other offices.

4.     In so far as it has
been customary in a Contracting State to determine the profits to be attributed
to a permanent establishment on the basis of an apportionment of the total
profits of the enterprise to its various parts, nothing in paragraph 2 or
paragraph 3 shall preclude such Contracting State from determining the profits
to be taxed by such an apportionment as may be customary; the method of
apportionment adopted shall, however, be such that the result shall be in
accordance with the principles laid down in this article.

5.     No profits shall be
attributed to a permanent establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the purpose of export to
the enterprise of which it is the permanent establishment.

6.     For the purposes of
the preceding paragraphs, the profits to be attributed to the permanent
establishment shall be determined by the same method year by year unless there
is good and sufficient reason to the contrary.

7.     Where profits include
items of income which are dealt with separately in other articles of this
Agreement, then the provisions of those articles shall not be affected by the
provisions of this article.

Article
8

SHIPPING
AND AIR TRANSPORT

1.            
Income
derived from the operation of ships or aircraft in international traffic by an
enterprise of a Contracting State shall not be taxed in the other Contracting
State.

2.            
For
the purposes of this article:–

a.     interest on funds
directly connected with the operation of ships or aircraft in international
traffic shall be regarded as income from the operation of such ships or
aircraft and the provisions of Article 11 shall not apply in relation to such
interest; accordingly there will be no withholding tax on such income;

b.    income derived from
the operation of ships or aircraft in international traffic shall mean income
derived by an enterprise described in paragraph I from the transportation by
sea or air respectively of passengers, mail, livestock or goods carried on by
the owners or lessees or charterers of ships or aircraft including–

                             
i.       
the
sale of tickets for such transportation on behalf of other enterprises;

                            

ii.       
any
other activity directly connected with such transportation;

                           
iii.       
the
leasing of ships or 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;

a.      

b.      

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 are made or imposed between the two
enterprises in their commercial or financial relations which differ from those
which would be made between independent enterprises, then any profits which
would, but for those conditions, have accrued to one of the enterprises, but,
by reason of those conditions, have not so accrued, may be included in the
profits of that enterprise and taxed accordingly.

Article
10

DIVIDENDS

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

2.     However, such
dividends may also be taxed in the Contracting State of which the company
paying the dividends is a resident and according to the laws of that State, but
if the beneficial owner of the dividends is a resident of the other Contracting
State, the tax so charged shall not exceed 15 per cent. of the gross amount of
the dividends.

3.     This paragraph shall
not affect the taxation of the company in respect of the profits out of which
the dividends are paid.

4.     The term

“dividends” as used in this article means income from shares,
“jouissance” shares or “jouissance” rights, mining shares,
founders’ shares or other rights, not being debt-claims, participating in
profits, as well as income from other corporate rights which is subjected to
the same taxation treatment as income from shares by the laws of the State of
which the company making the distribution is a resident. This term means also
income, even paid in the form of interest-derived from capital invested by the
members of a company other than a company with share capital, which is a
resident of Belgium.

5.     The provisions of
paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends,
being a resident of a Contracting State, carries on business in the other
Contracting State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs in that other
State independent personal services from a fixed base situated therein, and the
holding in respect of which the dividends are paid is effectively connected
with such permanent establishment or fixed base. In such case the provisions of
Article 7 or Article 14, as the case may be, shall apply.

6.     Where a company which
is a resident of a Contracting State derives profits or income from the other
Contracting State, that other State may not impose any tax on the dividends
paid by the company, except in so far as such dividends are paid to a resident
of that other State or in so far 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 company’s
undistributed profits to a tax on the company’s 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:

                                         
i.   
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

                                        
ii.   
15 per cent. of the
gross amount of the interest in all other cases.

3.            
The
term “interest” as used in this article means income from debt-claims
of every kind, whether or not secured by mortgage and whether or not carrying a
right to participate in the debtor’s profits, and in particular, income from
government securities and income from bonds or debentures, including premiums
and prizes attaching to such securities, bonds or debentures, however, the term

“interest” shall not include for the purpose of this article interest
regarded as dividends under the second sentence of paragraph 3 of Article 10.

4.            
The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
interest, being a resident of a Contracting State, carries on business in the
other Contracting State in which the interest arises, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the debt-claim in respect
of which the interest is paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or
Article 14, as the case may be, shall apply.

5.            
Interest
shall be deemed to arise in a Contracting State when the payer is that State
itself, a political sub-division, a local authority or a resident of that
State. Where, however, the person paying the interest, whether he is a resident
of a Contracting State or not, has in a Contracting State a permanent establishment
or a fixed base in connection with which the indebtedness on which the interest
is paid was incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be deemed to arise in the
State in which the permanent establishment or fixed base is situated.

6.            

Where,
by reason of a special relationship between the payer and the beneficial owner
or between both of them and some other person, the amount of the interest
having regard to the debt-claim for which it is paid, exceeds the amount which
would have been agreed upon by the payer and the beneficial owner in the
absence of such relationship, the provisions of this article shall apply only
to the last-mentioned amount. In such case, the excess part of the payments
shall remain taxable according to the laws of each Contracting State.

Article
12

ROYALTIESAND
FEES FOR TECHNICAL SERVICES

1.     Royalties and fees
for technical services 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
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 any individual for independent personal services mentioned in
Article 14, in consideration for services of a managerial, technical or consultancy
nature, including the provision of services of technical or other personnel.

4.     The provisions of
paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or
fees for technical services, being a resident of a Contracting State, carries
on business in the other Contracting State in which the royalties or fees for
technical services arise, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed base
situated therein, and the right or property in respect of which, or the
contract under which, the royalties or fees for technical services are paid is
effectively connected with such permanent establishment or fixed base. In such
case the provisions of Article 7 or Article 14, as the case may be, shall
apply.

5.     Royalties and fees
for technical services 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. Where, however, the person paying the royalties or fees
for technical services, whether he is a resident of a Contracting State or not,
has in a Contracting State a permanent establishment or a fixed base in
connection with which the liability to make the payments was incurred and the
payments are borne by such permanent establishment or fixed base, then the
royalties or fees for technical services shall be deemed to arise in the State
in which the permanent establishment or fixed base is situated.

6.     Where, by reason of a
special relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the royalties or fees for
technical services, having regard to the use, right, information or technical
services for which they are paid, exceeds the amount which would have been
agreed upon by the payer and the beneficial owner in the absence of such
relationship, the provisions of this article shall apply only to the
last-mentioned amount. In such case, the excess part of the royalties or fees
for technical services shall remain taxable according to the laws of each
Contracting State.

Article
13

CAPITAL
GAINS

1.     Gains derived by a
resident of a Contracting State from the alienation 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 other than those mentioned in paragraph 4, forming part of
a participation of at least 10 per cent. of the capital stock of a company
which is a resident of a Contracting State may be taxed in that State.

6.     Gains from the
alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4
and 5 shall be taxable only in the Contracting State of which the alienator is
a resident.

Article
14

INDEPENDENT
PERSONAL SERVICES

1.            
Income
derived by an Individual who is a resident of a Contracting State from the
performance of professional services or other independent activities of a
similar character shall be taxable only in that State except in the following
circumstances when such income may also be taxed in the other Contracting
State:-

a. if he has a fixed base regularly
available to him in the other Contracting State for the purpose of performing
his activities; in that case, only so much of the income as is attributable to
that fixed base may be taxed in that other State; or

b.if his stay in the
other Contracting State is for a period or periods amounting to or exceeding in
the aggregate 183 days in the relevant previous year” or “taxable
period”, as the case may be; in that case, only so much of the income as
is derived from his activities performed in that other State may be taxed in
that other State.2

1.      

2.     The term
“professional services” includes independent scientific, literary,
artistic, educational or teaching activities, as well as the independent
activities of physicians, surgeons, lawyers, engineers, architects, dentists
and accountants.

Article
15

DEPENDENT
PERSONAL SERVICES

1.            
Subject
to the provisions of Articles 16, 17, 18, 19, 20 and 21, salaries, wages and
other 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 so
exercised, such remuneration as is derived there from may be taxed in that
other State.

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

a. the recipient is present in the other
State for a period or periods not exceeding in the aggregate 183 days in the
relevant “previous 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 discharge of day-to-day functions of a managerial or technical nature and
remuneration received by a resident of a Contracting State consequent to some
personal activity as a partner of a company, other than a company having a
share capital which is a resident of the other Contracting State, may be taxed
in accordance with the provisions of paragraph 1 of Article 15, as if such
remuneration were derived in respect of an employment.

Article
17

INCOME
EARNED BY ENTERTAINERS AND ATHLETES

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

2.            
Where
income in respect of personal activities exercised by an entertainer or athlete
in his capacity as such accrues not to the entertainer or athlete himself but
to another person, that income may, notwithstanding the provisions of Articles
7, 14 and 15, be taxed in the Contracting State in which the activities of the
entertainer or athlete are exercised.

3.            
Notwithstanding
the provisions of paragraph 1, income derived by an entertainer or an athlete
who is a resident of a Contracting State from his personal activities as such
exercised in the other Contracting State, shall be taxable only in the
first-mentioned Contracting State, if the activities in the other Contracting
State are supported wholly or substantially from the public funds of the
first-mentioned Contracting State, including any of its political sub-divisions
or local authorities.

4.            
Notwithstanding
the provisions of paragraph 2 and of Articles 7, 14 and 15, where income in
respect of personal activities exercised by an entertainer or an athlete in his
capacity as such in a Contracting State accrues not to the entertainer or
athlete himself but to another person, that income shall be taxable only in the
other Contracting State, if that other person is a resident of that other
Contracting State and is supported wholly or substantially from the public
funds of that other State, including any of its political sub-divisions or
local authorities.

Article
18

NON-GOVERNMENT
PENSIONS AND ANNUITIES

1.            
Any
pension, other than a pension referred to in Article 19, or any annuity derived
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 money’s 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, such
remuneration shall be taxable only in the other Contracting State if the
services are rendered in that other State and the individual is a resident of
that State who:-

                     
i.       
is
a national of that State; or

                    
ii.       
did
not become a resident of that State solely for the purpose of rendering the
services.

1.  

2.  

a.     Any pension paid by,
or out of funds created 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, such pension
shall be taxable only in the other Contracting State if the individual is a
resident of, and a national of, that other State.

1.      

2.      

3.     The provisions of Articles
15, 16 and 18 shall apply to remuneration and pensions in respect of services
rendered in connection with a business carried on by a Contracting State or a
political sub-division or a local authority thereof.

Article
20

TEACHERS
AND RESEARCHERS

1.            

An
individual who is a resident of a Contracting State and who, at the invitation
of the Government of the other Contracting State or of a university or other
recognised educational institution situated in that other Contracting State,
visits such other Contracting State for the primary purpose of teaching or
engaging in research, or both, at a university or other recognised educational
institution shall not be subject to tax by that other Contracting State on his
income from personal services for such teaching or research for a period not
exceeding twenty-four months from the date of his arrival in that other
Contracting State.

2.            
This
article shall not apply to income from personal services for research if such
research is undertaken primarily for the private benefit of a specific person
or persons.

3.            
For
the purposes of this article and Article 21, an individual shall be deemed to
be a resident of a Contracting State if he is a resident of that Contracting
State in the year in which he visits the other Contracting State or in the year
immediately preceding that year.

Article
21

PAYMENTS
RECEIVED BY STUDENTS AND APPRENTICES

1.            
An
individual who is a resident of a Contracting State and visits the other
Contracting State solely:-

a.     as a student at a
university, college or other recognised educational institution in that other
Contracting State, or

b.    as a business
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 period, if such remuneration does not exceed 120,000
Belgian Francs or its equivalent in Indian rupees, as the case may be, in any
year.

Article
22

OTHER
INCOME

1.            
Items
of income of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing articles of this Agreement shall be taxable only in that
State.

2.            
The
provisions of paragraph 1 shall not apply to income, other than income from
immovable property as defined in paragraph 2 of Article 6, if the recipient of
such income, being a resident of a Contracting State, carries on business in
the other Contracting State through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed base
situated therein, and the right or property in respect of which the income is
paid is effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 or Article 14, as the case may be,
shall apply.

3.            
Notwithstanding
the provisions of paragraphs 1 and 2, items of income of a resident of a
Contracting State not dealt with in the foregoing articles of the Agreement and
arising in the other Contracting State may also be taxed in that other State.

CHAPTER
IV

METHODS
FOR ELIMINATION OF DOUBLE TAXATION

Article
23

ELIMINATION
OF DOUBLE TAXATION

1.            
The
laws in force in either of the Contracting States will continue to govern the
assessment and taxation of income in the respective Contracting States except
where express provision to the contrary is made in this Agreement.

2.            
In
the case of India, double taxation shall be avoided as follows:-

a.     Where a resident of
India derives income which, in accordance with the provisions of the Agreement,
may be taxed in Belgium, India shall allow as a deduction from the tax on the
income of that resident an amount equal to the income-tax paid in Belgium
whether directly or by deduction. Such deduction shall not, however, exceed
that part of the income-tax (as computed before the deduction is given) which
is attributable to the income which may be taxed in Belgium. Further, where
such resident is a company by which surtax is payable in India, the deduction
in respect of income-tax paid in Belgium shall be allowed in the first instance
from income-tax payable by the company in India and as to the balance, if any,
from surtax payable by it in India.

b.    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.

1.      

2.      

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
accordance with paragraph 2 or 6 of Article 12, the Indian tax levied on that
income shall be allowed as a credit against Belgian tax relating to such income
in accordance with the existing provisions of Belgian law regarding the
deduction from Belgian tax of taxes paid abroad.

                                        

ii.    Where a resident of
Belgium derive; fees for technical services which have been taxed in India in
accordance with paragraph 2 or 6 of Article 12, the provisions of Belgian tax
law with respect to earned income derived from sources outside Belgium and
subject to foreign tax shall apply.

a.      

b.      

c.     Where a company which
is a resident of Belgium owns shares in a company which is a resident of India,
the dividends which are paid to it by the latter company and which may be taxed
in India in accordance with paragraph 2 of Article 10, shall be exempt from the
corporate income-tax in Belgium under the conditions and limits provided for in
Belgian law.

d.    Where in accordance
with Belgian law, losses incurred by an enterprise carried on by a resident of
Belgium in a permanent establishment situated in India have been effectively
deducted from the profits of that enterprise for its taxation in Belgium, the
exemption provided for in sub-paragraph (a) shall not apply in Belgium to the
profits of other taxable periods attributable to that establishment to the extent
that those profits have also been exempted from tax in India by reason of
compensation for the said losses.

e.     For the purposes of
sub-paragraph (b)(i) the term “Indian tax levied” shall be deemed to
include any amount which would have been payable as Indian tax under the laws
of India and in accordance with the provisions of the Agreement for any year
but for a deduction allowed in computing the taxable income or an exemption
from or a reduction of tax granted for that year under

                                         
i.   
sections 10(4),
10(4B), 10(15)(iv) and 80L of the Income-tax Act, 1961 (43 of 1961), so far as
they were in force on, and have not been modified since, the date of the
signature of the Agreement, or have been modified only in minor respects so as
not to affect their general character; or

                                        
ii.   
any other provision
which may be enacted after the Agreement enters into force granting a deduction
in computing the taxable income or an exemption from or a reduction of tax and
which the competent authorities of the Contracting States agree to be for the
purposes 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 the same conditions.

3.            
The
provisions of paragraph 2 shall not be construed as preventing:-

a. a Contracting State from charging the
profits of a permanent establishment which an enterprise of the other
Contracting State has in the first-mentioned State at a rate of tax which is
higher than that imposed on the profits of a similar enterprise of the
first-mentioned Contracting State;

b.Belgium from imposing
the movable property prepayment on dividends paid to a permanent establishment
in Belgium of a company which is a resident of India.

1.      

2.      

3.      

4.     Nothing contained in
this article shall be construed as obliging a Contracting State to grant to
persons not resident in that State any personal allowances, reliefs or
reductions for tax purposes which are by law available only to persons who are
so resident.

5.     Enterprises of a
Contracting State, the capital of which is wholly or partly owned or
controlled, directly or indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the first mentioned Contracting
State to any taxation or any requirement connected therewith which is other or
more burdensome than the taxation and connected requirement to which other
similar enterprises of that first mentioned State are or may be subjected in
the same circumstances and under the same conditions.

6.     In this article, the
term “taxation” means taxes of every kind as specified in this
Agreement.

Article
25

MUTUAL
AGREEMENT PROCEDURE

1.            
Where
a person considers that the actions of one or both of the Contracting States
result or will result for him in taxation not in accordance with the provisions
of this Agreement, he may, irrespective of the remedies provided by the
domestic law of those States, present his case to the competent authority of
the Contracting State of which he is a resident or, if his case comes under
paragraph 1 of Article 24, to that of the Contracting State of which he is a
national. The case must be presented within two years from the first
notification of the action resulting in taxation not in accordance with the
provisions of the Agreement.

2.            
The
competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at a satisfactory solution, to
resolve the case by mutual agreement with the competent authority of the other
Contracting State, with a view to the 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 law of the Contracting State.

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, in so far as the taxation thereunder is not contrary to the
Agreement, in particular for the prevention of fraud or evasion of such taxes.
The exchange of information is not restricted by article 1. Any

©2020 CV Legal Tech Services LLP

CONTACT US

We're not around right now. But you can send us an email and we'll get back to you, asap.

Sending

Log in with your credentials

or    

Forgot your details?

Create Account