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The Government of Canada and the Government of the
Kingdom of Belgium, desiring to conclude a Convention
for the avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income and on
capital, have agreed as follows:
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This Convention shall apply to persons who are residents of
one or both of the Contracting States.
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1. This Convention shall apply to taxes on income and on
capital imposed on behalf of each Contracting State, irrespective
of the manner in which they are levied.
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2. There shall be regarded as taxes on income and on capital
all taxes imposed on total income, on total capital, or on elements
of income or of capital, including taxes on gains from the
alienation of movable or immovable property, as well as taxes on
capital appreciation.
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3. The existing taxes to which the Convention shall apply are
in particular:
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(a) in the case of Belgium:
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(i) the individual income tax;
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(ii) the corporate income tax;
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(iii) the income tax on legal entities;
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(iv) the income tax on non-residents;
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(v) the supplementary crisis contribution;
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including the prepayments, the surcharges on these taxes and
prepayments, and the supplements to the individual income
tax, (hereinafter referred to as ``Belgian tax'');
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(b) in the case of Canada: the taxes imposed by the
Government of Canada under the Income Tax Act, (hereinafter
referred to as ``Canadian tax'').
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4. The Convention shall apply also to any identical or
substantially similar taxes, which are imposed after the date of
signature of the Convention in addition to, or in place of, the
existing taxes. The competent authorities of the Contracting
States shall notify each other of any significant changes, which
have been made in their respective taxation laws.
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1. For the purposes of this Convention, unless the context
otherwise requires:
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(a) (i) the term ``Belgium'' used in a geographical sense means
the national territory, including the territorial sea, and any
other area in the sea or in the air within which Belgium, in
accordance with international law, exercises sovereign rights
or its jurisdiction;
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(ii) the term ``Canada'' used in a geographical sense means
the territory of Canada, including:
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(A) any area beyond the territorial seas of Canada which,
under the laws of Canada and in accordance with
international law, is an area within which Canada may
exercise rights with respect to the seabed and subsoil and
their natural resources;
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(B) the waters and airspace above every area referred to
in clause (A) in respect of any activity carried on in
connection with the exploration for or the exploitation
of the natural resources referred to therein;
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(b) the terms ``a Contracting State'' and ``the other
Contracting State'' mean Canada or Belgium as the context
requires;
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(c) the term ``person'' includes an individual, a company, a
partnership and any other body of persons, including, in the
case of Canada, an estate and a trust;
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(d) the term ``company'' means any body corporate or any
other entity which is treated as a body corporate for tax
purposes;
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(e) 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;
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(f) the term ``competent authority'' means:
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(i) in the case of Belgium: the Minister of Finance or the
Minister's authorized representative;
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(ii) in the case of Canada: the Minister of National Revenue
or the Minister's authorized representative, and,
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(g) the term ``national'' means:
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(i) any individual possessing the nationality of a
Contracting State;
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(ii) any legal person, partnership and association deriving
its status as such from the law in force in a Contracting
State;
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(h) the term ``international traffic'' means any voyage of a ship
or aircraft operated by an enterprise of a Contracting State to
transport passengers or goods except where the principal
purpose of the voyage is to transport passengers or goods
exclusively between places in the other Contracting State.
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2. As regards the application of the Convention by a
Contracting State at any time, any term not defined therein shall,
unless the context otherwise requires, have the meaning which it
has at that time under the law of that State concerning the taxes
to which the Convention applies, any meaning under that law
prevailing over a meaning given to the term under other laws of
that State.
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1. For the purposes of this Convention, the term ``resident of
a Contracting State'' means:
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(a) any person who, under the laws of that State, is liable to tax
therein by reason of the person's domicile, residence, place of
management or any other criterion of a similar nature;
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(b) that State, a political subdivision or a local authority
thereof or any legal entity owned by that State, subdivision or
authority.
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This term does not include any person who is liable to tax in that
State in respect only of income from sources in that State or
capital situated therein.
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2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then the
individual's status shall be determined as follows:
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(a) the individual shall be deemed to be a resident only of the
State in which the individual has a permanent home available;
if the individual has a permanent home available in both
States, the individual shall be deemed to be a resident only of
the State with which the individual's personal and economic
relations are closer (centre of vital interests);
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(b) if the State in which the individual's centre of vital interests
is situated cannot be determined, or if there is not a permanent
home available to the individual in either State, the individual
shall be deemed to be a resident only of the State in which the
individual has an habitual abode;
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(c) if the individual has an habitual abode in both States or in
neither of them, the individual shall be deemed to be a resident
only of the State of which the individual is a national;
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(d) if the individual is a national of both States or of neither of
them, the competent authorities of the Contracting States shall
settle the question by mutual agreement.
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3. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting States,
the competent authorities of the Contracting States shall by
mutual agreement endeavour to settle the question having regard
to its place of effective management, the place where it is
incorporated or otherwise constituted and any other relevant
factors. In the absence of such agreement, such person shall be
deemed not to be a resident of either Contracting State for the
purposes of Articles 6 to 22 inclusive.
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1. For the purposes of this Convention, the term ``permanent
establishment'' means a fixed place of business through which
the business of an enterprise is wholly or partly carried on.
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2. The term ``permanent establishment'' includes especially:
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(a) a place of management;
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(f) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources.
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3. A building site or construction or installation project
constitutes a permanent establishment only if it lasts for more
than twelve months.
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4. The use of an installation or drilling rig or ship in a
Contracting State to explore for or exploit natural resources
constitutes a permanent establishment only if such use is for more
than three months in any twelve month period.
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5. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' shall be deemed not to
include:
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(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
enterprise;
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(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage,
display or delivery;
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(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
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(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or of collecting
information, for the enterprise;
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(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity of
a preparatory or auxiliary character;
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(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (a) to
(e) provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory or
auxiliary character.
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6. Notwithstanding the provisions of paragraphs 1 and 2,
where a person - other than an agent of an independent status
to whom paragraph 7 applies - is acting on behalf of an
enterprise and has, and habitually exercises, in a Contracting
State an authority to conclude contracts in the name of the
enterprise, that enterprise shall be deemed to have a permanent
establishment in that State in respect of any activities which that
person undertakes for the enterprise, unless the activities of such
person are limited to those mentioned in paragraph 5 which, if
exercised through a fixed place of business, would not make this
fixed place of business a permanent establishment under the
provisions of that paragraph.
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7. An enterprise shall not be deemed to have a permanent
establishment in a Contracting State merely because it carries on
business in that 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.
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8. Notwithstanding the provisions of paragraphs 6 and 7, an
insurance enterprise of a Contracting State shall, except with
regard to reinsurance, be deemed to have a permanent
establishment in the other State if it collects premiums in that
other State, or insure risks situated therein, through a
representative referred to in paragraph 6 or through an agent of
an independent status who has, and habitually exercises, an
authority to conclude contracts in the name of the enterprise.
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9. 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 State (whether through a permanent establishment or
otherwise), shall not of itself constitute either company a
permanent establishment of the other.
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1. Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be taxed in
that other State.
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2. The term ``immovable property'' shall have the meaning,
which it has under 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, boats and aircraft shall not be regarded as immovable
property.
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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 and to income from the alienation of such property.
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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
independent personal services.
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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 or has carried 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
that permanent establishment.
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2. Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business in the other
Contracting State through a permanent establishment situated
therein, there shall in each Contracting State be attributed to that
permanent establishment the profits which it might be expected
to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions
and dealing wholly independently with the enterprise of which
it is a permanent establishment and with all other associated
persons.
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3. In determining the profits of a permanent establishment,
there shall be allowed those deductible expenses which are
incurred for the purposes 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.
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4. In the absence of appropriate accounting or other data
permitting the determination of the amount of the profits of an
enterprise of a Contracting State which is attributable to its
permanent establishment situated in the other State, the tax may,
in particular, be charged in that other State in accordance with its
domestic legislation, having regard to the normal profits of
similar enterprises engaged in the same or similar activities under
the same or similar conditions.
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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 enterprise.
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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.
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7. Where profits include items of income which are dealt with
separately in other Articles of this Convention, then the
provisions of those Articles shall not be affected by the
provisions of this Article.
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1. Profits derived by an enterprise of a Contracting State from
the operation of ships or aircraft in international traffic shall be
taxable only in that State.
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2. Notwithstanding the provisions of Article 7, profits which
are not covered by paragraph 1 and which are derived from the
operation of ships used to transport passengers or goods
exclusively between places in a Contracting State may be taxed
in that State.
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3. The provisions of paragraphs 1 and 2 shall also apply to
profits from the participation in a pool, a joint business or an
international operating agency.
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4. In this Article,
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(a) the term ``profits'' includes interest on funds directly
connected with the operation of ships or aircraft in
international traffic, provided that such interest is incidental to
the operation;
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(b) the term ``operation of ships or aircraft in international
traffic'' includes:
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(i) the charter or rental of ships or aircraft, or
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(ii) the rental of containers and related equipment,
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by an enterprise of a Contracting State, provided that such
charter or rental is incidental to the operation by that enterprise
of ships or aircraft in international traffic.
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1. Where
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(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
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(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,
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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 income or 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 income or profits of that enterprise and taxed accordingly.
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2. Where a Contracting State includes in the income or profits
of an enterprise of that State - and taxes accordingly - income
or profits on which an enterprise of the other Contracting State
has been charged to tax in that other State and the income or
profits so included are income or profits which would have
accrued to the enterprise of the first-mentioned State if the
conditions made between the two enterprises had been those
which would have been made between independent enterprises,
then that other State shall make such an adjustment as it considers
appropriate to the amount of tax charged therein on that income
or those profits. In determining such adjustment, due regard shall
be had to the other provisions of this Convention.
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3. A Contracting State shall not change the income or profits
of an enterprise in the circumstances referred to in paragraph 1
after the expiry of the time limits provided in its national laws
and, in any case, after six years from the end of the year in which
the income or profits which would be subject to such change
would have accrued to an enterprise of that State.
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4. The provisions of paragraphs 2 and 3 shall not apply in the
case of fraud or wilful default.
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1. Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State may
be taxed in that other State.
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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:
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(a) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company which owns directly at least 10
per cent of the voting stock of the company paying the
dividends;
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(b) 15 per cent of the gross amount of the dividends in all other
cases.
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This paragraph shall not affect the taxation of the company in
respect of the profits out of which the dividends are paid.
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3. 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 - even paid in the form
of interest - which is subjected to the same taxation treatment
as income from shares by the laws of the State of which the
company making the payment is a resident.
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4. 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.
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5. 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 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 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.
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6. Nothing in this Convention shall be construed as preventing
Canada from imposing a tax on the earnings attributable to
permanent establishments in Canada of a company which is a
resident of Belgium, in addition to the tax which would be
chargeable on the earnings of a company which is a resident of
Canada, provided that the rate of any additional tax so imposed
shall not exceed 5 per cent of the amount of such earnings which
have not been subjected to such additional tax in previous
taxation years. For the purpose of this provision, the term
``earnings'' means profits attributable to such permanent
establishments in Canada (including gains from the alienation of
property forming part of the business property, referred to in
paragraph 2 of Article 13, of such permanent establishments) in
accordance with Article 7 in a year and previous years after
deducting therefrom:
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(a) business losses attributable to such permanent
establishments (including losses from the alienation of
property forming part of the business property of such
permanent establishments) in such year and previous years;
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(b) all taxes chargeable in Canada on such profits, other than
the additional tax referred to herein;
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(c) the profits reinvested in Canada, provided that the amount
of such deduction shall be determined in accordance with the
existing provisions, of the law of Canada regarding the
computation of the allowance in respect of investment in
property in Canada, and any subsequent modification of those
provisions which shall not affect the general principle hereof;
and
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(d) five hundred thousand Canadian dollars ($500,000), less
any amount deducted:
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(ii) by a person related thereto from the same or a similar
business as that carried on by the company,
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under this subparagraph (d); for the purposes of this
subparagraph (d), a company is related to another company if
one company directly or indirectly controls the other, or both
companies are directly or indirectly controlled by the same
person or persons, or if the two companies deal with each other
not at arm's length.
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1. Interest arising in a Contracting State and paid to a resident
of the other Contracting State may be taxed in that other State.
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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 10 per cent
of the gross amount of the interest.
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3. Notwithstanding the provisions of paragraph 2, interest
arising in a Contracting State and paid to a resident of the other
Contracting State who is the beneficial owner thereof shall be
taxable only in that other State if it is:
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(a) interest paid with respect to indebtedness in connection
with the sale on credit by a resident of that other State of any
equipment, merchandise or services, except where the sale or
indebtedness was between related persons;
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(b) interest paid to the other Contracting State or a political
subdivision or a local authority thereof;
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(c) interest on a loan made, guaranteed or insured or a credit
extended, guaranteed or insured by Export Development
Canada in the case of Canada or by any similar institution
specified and agreed in letters exchanged between the
competent authorities of the Contracting States in the case of
Belgium.
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4. 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, as well as income assimilated to income from money
lent by the taxation law of the State in which the income arises;
however, the term ``interest'' does not include for the purpose of
this Article penalty charges for late payment, interest referred to
in paragraph 4 of Article 8 nor interest dealt with in paragraph 3
of Article 10.
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5. The provisions of paragraphs 1, 2 and 3 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.
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6. Interest shall be deemed to arise in a Contracting State when
the payer is a resident of that State. Where, however, the person
paying the interest, whether the person 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.
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7. 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 in the
Contracting State in which the interest arises according to the
laws of that State.
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1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that other
State.
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2. However, such royalties 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 is a
resident of the other Contracting State, the tax so charged shall
not exceed 10 per cent of the gross amount of the royalties.
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3. Notwithstanding the provisions of paragraph 2,
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(a) copyright royalties and other like payments in respect of
the production or reproduction of any literary, dramatic,
musical or other artistic work (but not including royalties in
respect of motion picture films nor royalties in respect of
works on film or videotape or other means of reproduction for
use in connection with television broadcasting); and
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(b) royalties for the use of, or the right to use, computer
software or any patent or for information concerning
industrial, commercial or scientific experience (but not
including any such information provided in connection with
a rental or franchise agreement),
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arising in a Contracting State and paid to a resident of the other
Contracting State who is the beneficial owner thereof shall be
taxable only in that other State.
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4. 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 payments of any kind in respect of motion picture films
and works on film, videotape or other means of reproduction for
use in connection with television, any patent, trade mark, design
or model, plan, secret formula or process or other intangible
property, or for the use of, or the right to use, industrial,
commercial or scientific equipment, or for information
concerning industrial, commercial or scientific experience.
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5. The provisions of paragraphs 1, 2 and 3 shall not apply if
the beneficial owner of the royalties, being a resident of a
Contracting State, carries on business in the other Contracting
State in which the royalties 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 the royalties 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.
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6. Royalties shall be deemed to arise in a Contracting State
when the payer is a resident of that State. Where, however, the
person paying the royalties, whether the person 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
obligation to pay the royalties was incurred, and such royalties
are borne by such permanent establishment or fixed base, then
such royalties shall be deemed to arise in the State in which the
permanent establishment or fixed base is situated.
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7. 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, having regard to the
use, right or information 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 payments shall
remain taxable in the Contracting State in which the royalties
arise, according to the laws of that State.
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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.
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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 with the whole enterprise) or of such
fixed base, may be taxed in that other State.
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3. Gains derived by an enterprise of a Contracting State 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 that State.
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4. Gains derived by a resident of a Contracting State from the
alienation of:
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(a) shares (other than shares listed on an approved stock
exchange in the other Contracting State) forming part of a
substantial interest in the capital stock of a company which is
a resident of either Contracting State, the value of which
shares is derived principally from immovable property
situated in the other State; or
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(b) a substantial interest in a partnership, trust or estate,
established under the law in either Contracting State, the value
of which is derived principally from immovable property
situated in the other State,
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may be taxed in that other State. For the purposes of this
paragraph, the term ``immovable property'' includes the shares
of a company referred to in subparagraph (a) or an interest in a
partnership, trust or estate referred to in subparagraph (b) but
does not include any property, other than rental property, in
which the business of the company, partnership, trust or estate is
carried on.
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5. Gains from the alienation of any property other than that
referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the
Contracting State of which the alienator is a resident.
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6. Where an individual who ceases to be a resident of a
Contracting State, and immediately thereafter becomes a resident
of the other Contracting State, is treated for the purposes of
taxation in the first-mentioned State as having alienated a
property and is taxed in that State by reason thereof, the
individual may elect to be treated for purposes of taxation in the
other State as if the individual had, immediately before becoming
a resident of that State, sold and repurchased the property for an
amount equal to its fair market value at that time. However, this
provision shall not apply to property, which would give rise, if
it were alienated immediately before the individual became a
resident of that other State, to a gain, which may be taxed in that
other State nor to immovable property situated in a third State.
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1. Income derived by an individual who is a resident of a
Contracting State in respect of professional services or other
activities of an independent character shall be taxable only in that
State unless the individual has a fixed base regularly available in
the other Contracting State for the purpose of performing the
activities. If the individual has or had such a fixed base, the
income may be taxed in the other State but only so much of it as
is attributable to that fixed base.
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2. The term ``professional services'' includes especially
independent scientific, literary, artistic, educational or teaching
activities as well as the independent activities of physicians,
lawyers, engineers, architects, dentists and accountants.
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1. Subject to the provisions of Articles 16, 18 and 19, salaries,
wages and other 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 therefrom may be taxed in that other
State.
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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:
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(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the fiscal year
concerned; and
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(b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the other State; and
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(c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the
other State.
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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.
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1. Director's fees and similar payments derived by a resident
of a Contracting State in that resident's 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.
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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
regarded as functions of a similar nature as those exercised by a
member of a board of directors or a similar organ of a company.
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2. Remuneration derived by a person referred to in paragraph
1 from a company which is a resident of a Contracting State in
respect of the discharge of day-to-day functions of a managerial
or technical nature may be taxed in accordance with the
provisions of Article 15 as if such remuneration were
remuneration derived by an employee in respect of an
employment and as if references to the ``employer'' were
references to the company.
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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, a musician, or as a sports person, from that resident's
personal activities as such exercised in the other Contracting
State, may be taxed in that other State.
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2. Where income in respect of personal activities exercised by
an entertainer or a sports person in that individual's capacity as
such accrues not to that entertainer or sports person personally
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 sports person are
exercised.
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3. The provisions of paragraph 2 shall not apply if the
entertainer or the sports person establishes that neither the
individual nor any person associated with the individual
participates directly or indirectly in the profits of the person
referred to in that paragraph.
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1. Periodic or non-periodic pensions and other similar
allowances arising in a Contracting State and paid in
consideration of past employment to a resident of the other
Contracting State may be taxed in the Contracting State in which
they arise. This provision shall also apply to pensions and
allowances paid under a public scheme organised by a
Contracting State in order to supplement the benefits of its social
security legislation.
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2. Notwithstanding the provisions of paragraph 1, payments
under the social security legislation in a Contracting State and
war veterans pensions paid by a Contracting State to a resident
of the other Contracting State shall be taxable only in the
first-mentioned State.
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3. Any alimony or other maintenance payment arising in a
Contracting State and paid to a resident of the other Contracting
State who is subject to tax therein in respect thereof, shall be
taxable only in that other State.
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1. (a) Salaries, wages and other similar remuneration, other
than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to an individual in
respect of services rendered to that State or subdivision or
authority shall be taxable only in that State.
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(b) However, such salaries, wages and other similar
remuneration shall be taxable only in the other Contracting
State if the services are rendered in that State and the recipient
is a resident of that State who:
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(i) is a national of that State; or
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(ii) did not become a resident of that State solely for the
purpose of performing the services.
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2. The provisions of paragraph 1 shall not apply to salaries,
wages and other similar remuneration in respect of services
rendered in connection with a business carried on by a
Contracting State or a political subdivision or a local authority
thereof.
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Payments which a student or business apprentice who is or
was immediately before visiting a Contracting State a resident of
the other Contracting State and who is present in the
first-mentioned State solely for the purpose of that individual's
education or training receives for the purpose of that individual's
maintenance, education or training shall not be taxed in that
State, provided that such payments arise from sources outside
that State.
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1. Subject to the provisions of paragraph 2, items of income
of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing Articles of this Convention shall be taxable
only in that State.
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2. However, if such income is derived by a resident of a
Contracting State from sources in the other Contracting State,
such income may also be taxed in the State in which it arises, and
according to the law of that State. Where such income is income
from an estate or a trust, other than a trust to which contributions
were deductible, the tax so charged shall, provided that the
income is taxable in the Contracting State in which the beneficial
owner is a resident, not exceed 15 per cent of the gross amount
of the income.
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1. Capital represented by immovable property referred to in
Article 6, owned by a resident of a Contracting State and situated
in the other Contracting State, may be taxed in that other State.
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2. Capital represented by 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 by 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,
may be taxed in that other State.
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3. Capital represented by ships and aircraft operated by an
enterprise of a Contracting State in international traffic, or
represented by movable property pertaining to the operation of
such ships and aircraft, shall be taxable only in that State.
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4. All other elements of capital of a resident of a Contracting
State shall be taxable only in that State.
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1. In the case of Belgium, double taxation shall be avoided as
follows:
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(a) When a resident of Belgium derives income or owns
elements of capital which are taxed in Canada in accordance
with the provisions of this Convention, other than those of
paragraph 2 of Article 10, of paragraphs 2 and 7 of Article 11,
of paragraphs 2 and 7 of Article 12 and of the second sentence
of paragraph 2 of Article 21, Belgium shall exempt such
income or such elements of capital from tax but may, in
calculating the amount of tax on the remaining income or
capital of that resident, apply the rate of tax which would have
been applicable if such income or elements of capital had not
been exempted.
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(b) Subject to the provisions of Belgian law regarding the
deduction from Belgian tax of taxes paid abroad, 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 subparagraph (c) hereinafter,
interest taxable in accordance with paragraph 2 or 7 of Article
11, royalties taxable in accordance with paragraph 2 or 7 of
Article 12, the Canadian tax levied on that income shall be
allowed as a credit against Belgian tax relating to such income.
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(c) Dividends derived by a company which is a resident of
Belgium from a company which is a resident of Canada and
which may be taxed in Canada in accordance with paragraph
2 of Article 10, shall be exempt from the corporate income tax
in Belgium under the conditions and within the limits
provided for in Belgian law.
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(d) When, in accordance with Belgian law, losses incurred by
an enterprise carried on by a resident of Belgium in a
permanent establishment situated in Canada, have been
effectively deducted from the profits of that enterprise for its
taxation in Belgium, the exemption provided for in
subparagraph (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
Canada by reason of compensation for the said losses.
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(e) When a resident of Belgium derives income to which the
provisions of the second sentence of paragraph 2 of Article 21
apply and which has been taxed in Canada, the amount of
Belgian tax proportionately attributable to such income shall
not exceed the amount which would be charged according to
Belgian law if such income were taxed as earned income
derived from sources outside Belgium and subject to foreign
tax.
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2. In the case of Canada, double taxation shall be avoided as
follows:
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(a) Subject to the existing provisions of the law of Canada
regarding the deduction from tax payable in Canada of tax
paid in a territory outside Canada and to any subsequent
modification of those provisions (which shall not affect the
general principle hereof) and unless a greater deduction or
relief is provided for under the laws of Canada, tax payable in
Belgium on profits, income or gains arising in Belgium shall
be deducted from any Canadian tax payable in respect of such
profits, income or gains.
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(b) Subject to the existing provisions of the law of Canada
regarding the taxation of income from a foreign affiliate and
to any subsequent modification of those provisions for the
purposes of computing Canadian tax, a company which is a
resident of Canada shall be allowed to deduct in computing its
taxable income any dividend received by it out of the exempt
surplus of a foreign affiliate which is a resident of Belgium.
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(c) Where in accordance with any provision of the Convention
income derived or capital owned by a resident of Canada is
exempt from tax in Canada, Canada may nevertheless, in
calculating the amount of tax on other income or capital, take
into account the exempted income or capital.
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(d) For the purposes of this paragraph, profits, income or gains
of a resident of Canada, which may be taxed in Belgium in
accordance with the Convention shall be deemed to arise in
Belgium.
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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, in particular with respect
to residence, are or may be subjected. This provision shall,
notwithstanding the provisions of Article 1, also apply to
individuals who are not residents of one or both of the
Contracting States.
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2. 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. This provision shall not be construed as
obliging a Contracting State to grant to residents of the other
Contracting State any personal allowances, reliefs and
reductions for taxation purposes on account of civil status or
family responsibilities which it grants to its own residents.
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3. Except where the provisions of paragraph 1 of Article 9 or
of paragraph 7 of Article 12, apply, royalties paid by an enterprise
of a Contracting State to a resident of the other Contracting State
shall, for the purpose of determining the taxable profits of such
enterprise, be deductible under the same conditions as if they had
been paid to a resident of the first-mentioned State.
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4. In this Article, the term ``taxation'' means the taxes which
are the subject of this Convention.
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1. Where a person considers that the actions of one or both of
the Contracting States result or will result for that person in
taxation not in accordance with the provisions of this
Convention, that person may, irrespective of the remedies
provided by the domestic law of those States, present the case in
writing to the competent authority of the Contracting State of
which that person is a resident, or if the case comes under
paragraph 1 of Article 24, to that of the Contracting State of
which that person is a national. To be admissible, the said 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 Convention.
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2. The competent authority referred to in paragraph 1 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 Convention.
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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
Convention.
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4. The competent authorities of the Contracting States shall
agree on administrative measures necessary to carry out the
provisions of the Convention and particularly on the proofs to be
furnished by residents of either Contracting State in order to
benefit in the other State from the exemptions or reductions in tax
provided for in the Convention.
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5. The competent authorities of the Contracting States may
communicate directly with each other for the application of the
Convention.
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6. For purposes of paragraph 3 of Article XXII (Consultation)
of the General Agreement on Trade in Services, the Contracting
States agree that, notwithstanding that paragraph, any dispute
between them as to whether a measure falls within the scope of
this Convention may be brought before the Council for Trade in
Services, as provided by that paragraph, only with the consent of
both Contracting States. Any doubt as to the interpretation of this
paragraph shall be resolved under paragraph 3 of this Article or,
failing agreement under that procedure, pursuant to any other
procedure agreed to by both Contracting States.
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1. The competent authorities of the Contracting States shall
exchange such information as is relevant for carrying out the
provisions of this Convention or of the domestic laws of the
Contracting States concerning all taxes imposed on behalf of the
Contracting States insofar as the taxation thereunder is not
contrary to the Convention. The exchange of information is not
restricted by Articles 1 and 2. Any information received by a
Contracting State shall be treated as secret in the same manner as
information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts
and administrative bodies) involved in the assessment or
collection of, the enforcement in respect of, or the determination
of appeals in relation to taxes. Such persons or authorities shall
use the information only for such purposes. They may disclose
the information in public court proceedings or in judicial
decisions.
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2. In no case shall the provisions of paragraph 1 be construed
so as to impose on a Contracting State the obligation:
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(a) to carry out administrative measures at variance with the
laws and administrative practice of that or of the other
Contracting State;
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(b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or of
the other Contracting State;
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(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or trade
process, or information, the disclosure of which would be
contrary to public policy (ordre public).
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1. Nothing in this Convention shall affect the fiscal privileges
of members of a diplomatic mission or consular post under the
general rules of international law or under the provisions of
special agreements.
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2. The provisions of the Convention shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction now or hereafter accorded by the laws of a Contracting
State in the determination of the tax imposed by that State.
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3. Nothing in the Convention shall be construed as preventing
Canada from imposing a tax on amounts included in the income
of a resident of Canada with respect to a trust in which that
resident has an interest or with respect to a controlled foreign
affiliate, in accordance with section 91 of the Income Tax Act of
Canada as it may be amended without changing the general
principle hereof.
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4. The Convention shall not apply to non-resident-owned
investment corporations as defined under section 133 of the
Income Tax Act of Canada, or under any similar provision
enacted by Canada after the signature of the Convention, or to
any income derived from such companies by any shareholders
thereof.
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5. The exemption provided under subparagraph (b) of
paragraph 3 of Article 12 shall not apply where the enterprise
benefiting from the royalties has, in a State which is not a
Contracting State, a permanent establishment to which the
royalties are attributable and where the royalties are subject, in
the State of residence of the enterprise and in the State where the
permanent establishment is situated, to a tax the total of which is
less than 60 per cent of the tax that would be imposed in the State
of residence of the enterprise if the royalties were attributable to
the enterprise and not to the permanent establishment. The
provisions of this paragraph shall not apply:
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(a) if the royalties are derived in connection with or incidental
to the active conduct of a trade or business carried on in the
State which is not a Contracting State; or
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(b) when Belgium is the State of residence of the enterprise, to
royalties taxed by Canada according to section 91 of the
Income Tax Act, as it may be amended without changing the
general principle hereof.
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6. Notwithstanding the provisions of paragraphs 2 and 3 of
Article 11 and of paragraphs 2 and 3 of Article 12, interest and
royalties (other than royalties to which paragraph 5 applies)
arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in the first-mentioned State at a
rate not exceeding 15 per cent of the gross amount of the interest
and 10 per cent of the gross amount of the royalties, where:
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(a) such interest or royalties are received by a company and
one or more persons not resident in that other Contracting
State hold directly or indirectly, through one or more
companies or otherwise, at least 50 per cent of the capital of
such company and, directly or indirectly, exercise the
management of, or control such company; and
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(b) such interest or royalties are not subject to tax in the other
State under the ordinary rules of its tax law.
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1. This Convention shall be ratified and the instruments of
ratifi-cation shall be exchanged at Brussels as soon as possible.
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2. The Convention shall enter into force on the fifteenth day
after the date of the exchange of the instruments of ratification
and its provisions shall have effect:
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(i) with respect to taxes due at source on income credited or
payable on or after January 1 of the year in which the
instruments of ratification have been exchanged;
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(ii) with respect to other taxes for taxable periods ending on
or after December 31 of the year in which the instruments
of ratification have been exchanged;
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(i) with respect to taxes withheld at the source on amounts
paid or credited to non-residents on or after January 1 of the
year in which the instruments of ratification have been
exchanged;
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(ii) with respect to other taxes for taxation years beginning
on or after January 1 of the year in which the instruments
of ratification have been exchanged.
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3. The provisions of the Convention between Canada and
Belgium for the avoidance of double taxation and the settlement
of other matters with respect to taxes on income signed at Ottawa,
on May 29, 1975, shall cease to be effective in relation to any
Canadian or Belgian tax for which this Convention has effect in
accordance with paragraph 2.
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This Convention shall remain in force until terminated by a
Contracting State but either Contracting State may terminate the
Convention, through diplomatic channels, by giving to the other
Contracting State, written notice of termination not later than
June 30 of any calendar year from the fifth year following that in
which the instruments of ratification have been exchanged. In the
event of termination before July 1 of such year, the Convention
shall cease to have effect:
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(i) with respect to taxes due at source on income credited or
payable after December 31 of the year in which the notice
of termination is given;
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(ii) with respect to other taxes for taxable periods ending on
or after December 31 of the year next following the year in
which the notice of termination is given;
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(i) with respect to taxes withheld at the source on amounts
paid or credited to non-residents after December 31 of the
year in which the notice of termination is given;
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(ii) with respect to other taxes for taxation years beginning
on or after January 1 of the year next following the year in
which the notice of termination is given.
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IN WITNESS WHEREOF the undersigned, being duly
authorized thereto by their respective Governments, have signed
this Convention.
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DONE in duplicate at Ottawa, this 23rd day of May, 2002, in
the English, French and Dutch languages, the three texts being
equally authentic.
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FOR THE GOVERNMENT F
OR THE GOVERNMENT OF CANADA: OF THE KINGDOM OF BELGIUM:
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Pierre S. Pettigrew Luc Carbonez
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At the moment of signing the Convention between Canada
and Belgium for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and
on capital, the undersigned have agreed that the following
provisions shall form an integral part of the Convention.
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1. With reference to paragraph 1 of Article 4.
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It is understood that:
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(a) for purposes of the application of the Convention to:
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(i) income taxes, the term ``liable to tax'' refers to liability
to taxes on income and not to taxes on capital;
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(ii) capital taxes, the term ``liable to tax'' refers to liability
to taxes on capital and not to taxes on income;
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(b) the term ``resident of a Contracting State'' also includes:
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(i) a company or other organization constituted and
operated exclusively to administer or provide benefits
under one or more funds or plans established to provide
pension, retirement or other employee benefits that is
generally exempt from tax in a Contracting State and that
is a resident of that State according to the laws of that State;
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(ii) a company or other organization that is operated
exclusively for religious, charitable, scientific, educational,
or public purposes and that is generally exempt from tax in
a Contracting State and that is a resident of that State
according to the laws of that State.
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2. With reference to paragraph 6 of Article 10.
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The provisions of this paragraph shall also apply with respect to
earnings derived from the alienation of immovable property in
Canada by a company carrying on a trade in immovable property,
whether or not it has a permanent establishment in Canada, but
only insofar as these earnings may be taxed in Canada under the
provisions of Article 6 or paragraph 1 of Article 13.
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3. With reference to subparagraph (a) of paragraph 3 of Article
11.
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It is understood that the exemption provided for under that
subparagraph shall not apply to interest paid with respect to
indebtedness that was created or acquired essentially with a view
to take advantage of that provision and not for bona fide
commercial purposes.
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4. With reference to paragraph 4 of Article 12.
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It is understood that payments constituting consideration for
technical assistance or technical services shall not be considered
to be payments for information concerning industrial,
commercial or scientific experience, but shall be taxable in
accordance with the provisions of Article 7 or Article 14, as the
case may be.
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5. With reference to paragraph 2 of Article 16.
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The provisions of this paragraph shall also apply, in the case of
Belgium, to remuneration received by a resident of Canada in
respect of that resident's personal activity as a partner of a
company, other than a company with share capital, which is a
resident of Belgium.
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6. With reference to paragraph 6 of Article 27.
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The provisions of paragraph 6 of Article 27 shall not apply if,
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(a) the participation in the capital of the company receiving the
interest or the royalties was made for bona fide commercial or
financial reasons, and
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(b) at the end of the taxation year or the taxable period
concerned, the paid-up capital and the taxed retained earnings
of the company receiving the interest or the royalties do not
exceed 33 per cent of its debt.
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IN WITNESS WHEREOF the undersigned, being duly
authorized thereto by their respective Governments, have signed
this Protocol.
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DONE in duplicate at Ottawa, this 23rd day of May, 2002, in
the English, French and Dutch languages, the three texts being
equally authentic.
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FOR THE GOVERNMENT F
OR THE GOVERNMENT OF CANADA: OF THE KINGDOM OF BELGIUM:
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Pierre S. Pettigrew Luc Carbonez
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