TMI BlogAgreement for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income between the Government of India and the Government of BelgiumX X X X Extracts X X X X X X X X Extracts X X X X ..... a. ANNEXURE The Government of India and the Government 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 taxes on income imposed on behalf of each Contracting State or of its political sub-divisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income 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. 3. The existing taxes to which this Agreement shall apply are: (a) In the case of India: (i) the income-tax and any surcharge on income-tax imposed under the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the case of Belgium, the competent authority according to Belgian legislation; (e) the term " tax " means " Indian tax " or " Belgian tax " as the context requires; (f) the term " person " includes individuals, companies and all other entities which are treated as taxable units under the tax laws in force in the Contracting State of which they are 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 industrial or commercial enterprise or undertaking carried on by a resident of a Contracting State and any such enterprise or undertaking carried on by a resident of the other Contracting State. 2. In the application of the provisions of this Agreement by a Contracting State, any term used but not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject or activity continues for a period of more than six months, or where such project or 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 activity exceed 10 per cent. of the sale price of the machinery or 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 be a permanent establishment of that enterprise in the first-mentioned State if: (i) he has and habitually exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property of an enterprise and to income from immovable property used for the performance of professional services. ARTICLE 7 Business profits 1. Industrial or commercial profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise is engaged in trade or business in the other Contracting State through a permanent establishment situated therein. If the enterprise is engaged in trade or business as aforesaid, the industrial or commercial profits of the enterprise may be taxed in the other State but only so much of such profits as are attributable to that permanent establishment. 2. Where an enterprise of a Contracting State is engaged in trade or business in the other Contracting State through a permanent establishment situated therein, there shall be attributed to such permanent establishment the industrial or commercial 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 arms's length with the enterprise of which it is a permanent establishment. 3. In the determination of the profits of a permanent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for technical services, interest, dividends, capital gains, remuneration for labour or personal (including professional) services or income from the operation of ships or aircraft. The items of income so excluded shall be dealt with in accordance with the provisions of the other Articles of this Agreement. ARTICLE 8 Air transport and shipping 1. Income derived from the operation of aircraft in international traffic by an enterprise of a Contracting State shall not be taxed in the other Contracting State. 2. Paragraph 1 shall likewise apply in respect of participations in pools of any kind by enterprises engaged in air transport. 3. Income of an enterprise of a Contracting State derived from the other Contracting State from the operation of ships in international traffic may be taxed in that other Contracting State to the extent of one-half of such income and the other half of such income shall be taxable only in the first-mentioned Contracting State. Such income shall be the portion of the world income as computed by the first-mentioned Contracting State, which bears to that world income the same proportion as the receipts from the transportation of passengers, livest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 3. The term " royalties " as used in this Article means any royalties, rentals or other amounts paid as consideration for the use of, or the right to use copyrights of literary, artistic or scientific works (including motion picture films, or films or tapes for radio or television broadcasting), patents, designs or models, plans, secret processes or formulae, trade marks or other like property or rights, or for industrial, commercial or scientific equipment, but does not include royalties or other amounts paid in respect of the operation of mines or quarries or of the extraction or removal of natural resources, and does not include income referred to in Article 13. ARTICLE 13 Fees for technical services Income derived by an enterprise of a Contractin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of Belgium in respect of an employment exercised in India shall not be taxed in India if: (a) he is present in India for a period or periods not exceeding in the aggregate 183 days during the relevant " previous year "; (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of India; (c) the remuneration is subject to Belgian tax; and (d) the remuneration is not deducted in computing profits of an enterprise chargeable to Indian tax. 3. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of India in respect of an employment exercised in Belgium shall not be taxed in Belgium if: (a) he is present in Belgium for a period or periods not exceeding in the aggregate 183 days during the relevant taxable period; (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of Belgium; (c) the remuneration is subject to Indian t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARTICLE 21 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 24 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 22, an individual shall be deemed to be a resident of a Contracting State if he is a resident of the Contracting State in the year in which he visits the other Contracting State or in the year immediately preceding that year. ARTICLE 22 Students 1. An individual who is a resident of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted. 3. (a) Where a person who is a resident of Belgium derives income which, in accordance with the provisions of Chapter III of this Agreement, may be taxed in India, Belgium shall, subject to the provisions of sub-paragraphs (b) and (c) of this paragraph and sub-paragraph (b) of paragraph 4, exempt such income from its tax but may, in calculating the tax on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted. (b) (i) Where a company which is a resident of Belgium owns shares in a company which is a resident of India, the dividends paid thereon to the former company shall be exempt in Belgium from the tax referred to in paragraph 3(b)(ii) of article 2 to the extent that exemption would have been accorded under Belgian law if the two companies had been residents of Belgium. (ii) A company which is a resident of Belgium and which, during the whole of an accounting period of a company which is a resident of India and is chargeable to Indian tax, has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 subjected. 2. The term " nationals of a Contracting State " means: (a) all individuals possessing the nationality of that Contracting State; (b) all legal persons, partnerships and associations deriving their status as such from the law in force in that Contracting State. 3. 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 enterprise of that other State carrying on the same activities in the same circumstances and under the same conditions. This provision shall not be construed as preventing Belgium from charging the total amount of profits of a permanent establishment in Belgium of a company being a resident of India or of an entity having its place of effective management in India at the rate of tax provided by the Belgian law, but this rate may not-before the surcharges referred to in paragraph 3(b)(vi) of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 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 for the prevention of fraud or for the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this Agreement. Any information so exchanged shall be treated as secret but may be disclosed to persons (including a court or administrative body) concerned with the assessment, collection, enforcement or prosecution in respect of the taxes which are the subject of this Agreement. 2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws or administrative practice of that or of the other Contracting State; (b) to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as respects income derived during any " previous year " beginning on or after the 1st day of January of the calendar year next following that in which the notice is given; (b) In Belgium: (i) as respects all tax due at source on income credited or payable on or after the 1st day of January of the calendar year next following that in which the notice is given; (ii) as respects all tax other than tax due at source on income derived during any taxable period ending on or after the 31st day of December of the calendar year next following that in which the notice is given. IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed the present Agreement. Done in duplicate at Brussels this 7th day of February, 1974, one thousand nine hundred and seventy four in the Hindi, English, French and Netherlands languages, all the four texts having equal authenticity. For the Government of India(Sd.) K. B. LALL. For the Government of Belgium (Sd.) VAN ELSLANDE. PROTOCOL The Government of India and the Government of Belgium Having entered into an A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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