DT3472 - DT: Belgium: double taxation agreement SI 1987 No.2053, Article 23: Elimination of double taxation

(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (as it may be amended from time to time without changing the general principle hereof):

(a) Belgian tax payable under the laws of Belgium and in accordance with the provisions of this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Belgium (excluding, in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Belgian tax is computed;

(b) in the case of income (other than loan interest) derived from a Belgian company (other than a company with share capital) by a member of that company the credit shall take into account the Belgian tax charged in respect of that income, whether charged on the company or on the member if:

(i) the member's liability as a member of that company is unlimited, or

(ii) the member is a company which is a resident of the United Kingdom and which owns not less than 10 per cent of the capital (other than loan capital) of the Belgian company;

(c) in the case of a dividend paid by a company which is a resident of Belgium to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the Belgian company, the credit shall take into account (in addition to any Belgian tax creditable under sub-paragraph (a) of this paragraph) the Belgian tax payable by the company in respect of the profits out of which such dividend is paid.

(2) 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 the United Kingdom in accordance with the provisions of this Convention, other than those of paragraph (2) of Article 10, of paragraphs (2) and (6) of Article 11 and of paragraph (4) of Article 12, Belgium shall exempt such income from tax but may, in calculating the amount of the tax on the remaining income of that resident, apply the rate of tax which would have been applicable if the income in question had not been exempted.

(b) Where a resident of Belgium derives from sources within the United Kingdom:

(i) dividends dealt with in accordance with paragraph (2) or paragraph (3) of Article 10 of this Convention, not exempted from Belgian tax in accordance with subparagraph (c) of this paragraph,

(ii) interest dealt with in accordance with paragraph (2) or paragraph (6) of Article 11 of this Convention, and

(iii) royalties dealt with in accordance with paragraph (4) of Article 12 of this Convention,

the fixed proportion in respect of foreign tax for which provision is made under Belgian law shall, under the conditions and at the rate provided for by such law, be allowed as a credit against Belgian tax relating to such income.

(c) Where a company which is a resident of Belgium owns shares in a company which is a resident of the United Kingdom, the dividends paid thereon to the former company which have not been dealt with in accordance with paragraph (5) of Article 10 of this Convention shall be exempted in Belgium from the tax referred to in paragraph (1)(b)(ii) of Article 2 of this Convention, to the extent that exemption would have been accorded if the two companies had been residents of Belgium.

(d) Where in accordance with Belgian law, losses of a Belgian enterprise attributable to a permanent establishment situated in the United Kingdom have been effectively deducted from the profits of that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph (a) of this paragraph shall not apply in Belgium to the profits of other chargeable periods attributable to that permanent establishment to the extent that those profits have also been relieved from tax in the United Kingdom by reason of compensation for the said losses.

(3) For the purposes of this Article profits or remuneration for personal (including professional) services performed in a Contracting State shall be deemed to be income from sources within that State, and the services of an individual whose services are wholly or mainly performed aboard a ship, boat or aircraft operated by a resident of a Contracting State shall be deemed to be performed in that State.