DT3405 - Belgium: Interest

Article 11(2) of the agreement provides that Belgian tax on interest arising in Belgium to a United Kingdom resident will be reduced to 15% if the interest is

• beneficially owned by the resident and
• not effectively connected (see INTM153110 fifth sub-paragraph.) with a permanent establishment which the United Kingdom resident has in Belgium.

The EC Directive on Interest and Royalties (2003/49EC) (see INTM400010 to 400110) provides for the abolition of source state taxation on interest and royalty payments made between associated companies in different Member States. It also ensures that the payments are subject to tax once in a Member State. It applies with effect from 1 January 2004.