|Updated at:||March 2010|
Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has come into force on the 1st day of October, 1997, the thirtieth day after the receipt of later of notifications by both the Contracting States to each other of the completion of the procedures required for bringing into force of the said Agreement in accordance with paragraph 1 of Article 29 of the said Agreement;
Now, therefore, in exercise of the powers conferred under section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India.
(Notification No. G. S. R. No. 632(E), dated 31st October, 1997)
Agreement between the government of the republic of india and the government of the kingdom of belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income
The Government of the Republic of India and the Government of the Kingdom of Belgium, Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows:
Scope of the agreement
This Agreement shall apply to persons who are residents of one or both of the Contracting States.
This Agreement shall apply to all taxes imposed on total income or on elements of income including taxes on gains from the sale, exchange or transfer of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises.
The term "taxes" shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which the Agreement applies or which represents a penalty imposed relating to those taxes.
The existing taxes to which the Agreement shall apply are:-
(a) In the case of India:
(i) the income-tax including any surcharge thereon; and (ii) the surtax, (hereinafter referred to as "Indian tax").
(b) In the case of Belgium:
(i) the individual income-tax (l'impot des personnes physiques de personenbelasting);
(ii) the corporate income-tax (l'impot des societes; de vennootschapsbelasting);
(iii) the income-tax on legal entities (l'impot des personnes morales; de rechtspersonenbelasting);
(iv) the income tax on non-residents (l'impot des non-residents de belasting der niet-verblijfhouders);
(v) the special levy assimilated to the individual income-tax (la cotisation speciale assimilee a l'impot des personnes physiques; de met de personenbelasting gelijkgestelde bijzondere heffing),
including the prepayments, the surcharges on these taxes and prepayments, and the supplements to the individual income-tax,
(hereinafter referred to as "Belgian tax").
The Agreement shall also apply to any identical or substantially similar tax which is imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall, from time to time, notify to each other any significant changes which have been made in their respective taxation laws.
In this Agreement, unless the context otherwise requires:-
(a) the term " India " means the Territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law
(b) the term "Belgium" means the Kingdom of Belgium when used in a geographical sense, it means the national territory, the territorial sea and any other area in the sea within which Belgium, in accordance with international law, exercises sovereign rights or its jurisdiction;
(c) the terms "a Contracting State" and "the other Contracting State" mean India or Belgium as the context requires;
(d) the term "competent authority" means:-
in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative, and
n the case of Belgium, the Minister of Finance or his authorised representative;
(e) the term "tax" means "Indian tax" or "Belgian tax" as the context requires;
(f) the term "person" includes an individual, a company and any other entity which is treated as a taxable unit under the tax laws in force in the Contracting State of which it is a resident;
(g) the term "company" means in the case of India any entity which is a company or which is treated as a company under the Indian tax law, and in the case of Belgium any entity which is a company or which is treated as a body corporate under the Belgian tax law;
(h) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
(i) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
(j) the term "national" means:--
(i) any individual possessing the nationality of a Contracting State;
(ii) any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State.
As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies.
For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is a resident of that State for the purposes of the taxes of that State to which the Agreement applies.
Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his residential status for the purposes of the Agreement shall be determined in accordance with the following rules:--
(a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (hereinafter referred to as his "centre of vital interests");
(b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;
(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;
(d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall determine the question by mutual Agreement.
Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.
For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
The term "permanent establishment" includes especially:
(a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop or a warehouse; (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; (g)an installation or structure used for the exploration or exploitation of natural resources; (h) the provision of services or facilities in connection with or supply of plant and machinery on hire used or to be used in, the prospecting for, or extraction or production of mineral oils; (i) a premises used as a sales outlet or for receiving or soliciting orders; (j) a building site or construction, installation or assembly project or supervisory activities in connection therewith, where such site, project or activities (together with other such sites, projects or activities, if any) continue for a period of more than six months, or where such project or supervisory activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six months and the charges payable for the project or supervisory activity exceed 10 per cent. of the sale price of the machinery and equipment.
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.
Subject to the provisions of paragraph 5, a person acting in a Contracting State on behalf of an enterprise of the other Contracting State shall be deemed to have a permanent establishment of that enterprise in the first-mentioned State if:--
(a) he has and habitually exercises, in that State an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of...
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