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India-Belgium Double Taxation Avoidance Agreement (DTAA)
The Government of India has entered into a significant Double Taxation Avoidance Agreement (DTAA) with the Kingdom of Belgium, focusing on the avoidance of double taxation and the prevention of fiscal evasion in relation to taxes on income. This noteworthy agreement took effect on October 1, 1997, and was further augmented by an amending protocol, which came into effect through a notification on January 19, 2001.
The India-Belgium DTAA addresses the following taxes within the contracting states:
a. In India:
- Income tax, including any surcharges.
b. In Belgium:
- Individual income tax.
- Corporate income tax.
- Income tax on legal entities.
- Income tax on non-residents.
- Special levy assimilated to individual income tax.
Here are key aspects to consider regarding the India-Belgium DTAA:
- Resident: Resident refers to any person who, as per the laws of that state, is considered a resident for the purposes of that state’s taxes.
- Permanent Establishment: Permanent establishment signifies a fixed place of business where the enterprise’s activities are wholly or partly conducted.
- Income from Immovable Property: Income from immovable property may be taxed in the contracting state in which the property is situated.
- Taxation of Enterprise Profits: The profits of an enterprise from a contracting state are taxable only in that state unless the enterprise operates through a permanent establishment in the other contracting state. In such a scenario, only the profits attributable to that permanent establishment are taxable in the other state.
- Taxation of Dividends, Interest, Royalties, and Fees: Dividends, interest, royalties, and fees for technical services may be taxed in the contracting state where they arise and are paid to a resident of the other contracting state.
- Withholding Tax Rates: The agreement stipulates withholding tax rates as follows:
- Dividends: 15%
- Royalties: 10%
- Fees for technical services: 10%
- Interests: 15% (10% if the loan is granted by a bank)
The India-Belgium DTAA primarily covers income tax and its surcharges in India, while addressing individual income tax, corporate tax, and related levies in Belgium. This agreement has fostered enhanced cooperation between the contracting states.
Moreover, the DTAA incorporates standard provisions such as the exchange of information, assistance in tax collection, the mutual agreement procedure, and a credit method system to prevent double taxation. It is thus fully aligned with international practices and standards.
Chandrawat & Partners specializes in international tax agreements and is well-equipped to provide expert legal counsel on the India-Belgium Double Taxation Avoidance Agreement and related issues. If you require detailed legal guidance or assistance on this matter, please do not hesitate to contact us. We are dedicated to providing professional legal services and helping you navigate the intricacies of international tax laws.
For further information or to seek our expertise on this agreement or other legal matters, please reach out to us. We are here to serve your legal needs with the utmost professionalism and diligence.
To know more about DTAA relations between India and Belgium, please download our Guide.