Double Tax Agreement Uk Belgium

Belgium shall take account of exempt labour income when determining the additional taxes set by Belgian municipalities and agglomerations (Article 23(2)(d)). Belgium uses the imputation method to avoid double taxation in respect of interest and royalties (Article 23(2)(e)). Another common situation when it comes to double taxation is when a person who is not a resident of the UK but has income from the UK and remains a tax resident in their home country. 2. If it considers that the objection is justified and that it is unable to reach a satisfactory solution, the competent authority shall endeavour to resolve the matter by mutual agreement with the competent authority of the other State Party with a view to avoiding taxes incompatible with the Convention. When two countries are trying to tax the same income, there are a number of mechanisms in place to offer tax breaks so you don`t end up paying taxes twice. The first mechanism to be examined is whether the double taxation agreement between the United Kingdom and the other country restricts the right of one of the two countries to tax this income. If the income remains taxable in both countries, the taxpayer`s country of residence is exempt from double taxation of the tax levied by the other country (Article 23). There are provisions that protect nationals and businesses of one country from discriminatory taxation in the other country (Article 24).

Consultation and exchange of information between the tax authorities of the two countries is envisaged (Articles 25 and 26). Zum 1. In January 2021, the UK will leave the EU/EEA to become a third country instead of a member state. Brexit will certainly have a significant impact on Belgian companies that regularly do business with colleagues in the UK. More importantly, the UK will no longer apply EU directives after the end of the transition period provided for in the Withdrawal Agreement, but the Belgian-Uk Double Taxation Convention (DTA) will continue to apply. However, the treatment of dividend, interest and royalty payments will ultimately depend on existing UK and Belgian national tax legislation. Below we will list the main tax implications of Brexit on Belgian income tax legislation. (c) Subparagraphs (a) and (b) of this paragraph shall apply only if documents satisfactory to the competent authority of the other Contracting State certifying that the fee has been paid in the Contracting State which is exclusively entitled to tax the remuneration referred to in subparagraphs (a) and (b) are presented. Otherwise, the national law of the Contracting States relating to the taxation of such remuneration shall apply and any double taxation shall be exempt in accordance with Article 23. (2) In the case of Belgium, double taxation should be avoided as follows: the following table lists the countries that have concluded a double taxation agreement with the United Kingdom (as at 23 October 2018).

On the UK government`s website, there is an up-to-date list of active and historical double taxation treaties. There is a list of current double taxation treaties on GOV.UK. Belgium has concluded a double taxation agreement with more than 150 countries. Finally, it should be noted that the Belgian law of 21 February 2020 contains various specific and useful transitional provisions, but also flexibility with regard to future Brexit developments and agreements until 31 December 2020. A double taxation agreement effectively takes precedence over the national law of both countries. For example, if you are not a resident of the United Kingdom and you have bank interest in the United Kingdom, that income would be taxable in the United Kingdom as income of the United Kingdom under national law. However, if you are a resident of France, the double taxation agreement between the UNITED KINGDOM and France states that interest should only be taxable in France. This means that the UK must give up its right to tax this income. In this situation, you would make a claim to HMRC (in practice, this would normally be done in a self-assessment tax return) to exempt the income from UK tax. Every double taxation treaty is different, although many follow very similar guidelines – even if the details differ.

You may have to pay taxes in the UK and another country if you reside here and have income or profits abroad, or if you are not resident here and have income or profits in the UK. This is called “double taxation.” We explain how this can apply to you. Under UK rules, he is not resident, so he is taxable in the UK only on his income from the UK. Mark remains resident in Germany and is therefore taxable there with his worldwide income. The double taxation treaty tells Mark that the UK has the main right to tax income and that if Germany also wants to tax it, the foreign tax credit method should be used to avoid double taxation. Under the applicable double taxation treaties, if a natural person is considered not to be a resident of the United Kingdom, the natural person would only be taxable in the United Kingdom if the income comes from activities in the United Kingdom. This is important because it means that all non-UK capital gains and profits are protected from UK tax. In order to determine whether it is possible and how to subsequently apply a double taxation agreement, it is essential to determine the position of the person`s “contractual seat”, since it is the country of the contractual seat that usually takes over the taxation rights. As we have already mentioned, even if there is no double taxation treaty, tax relief through a foreign tax credit may be possible. It has nothing to do with a labour tax credit or a child tax credit. Belgium applies the progression exemption method in order to avoid double taxation (Article 23(2)(a)). Belgium also grants a tax exemption for income classified as dividends under Belgian law.

This exemption applies where the income of a company established in Belgium comes from a holding in a company which has its place of effective management in the United Kingdom and the Belgian resident has been taxed in the United Kingdom in proportion to the holding in the company. Exempt income is income after deduction of costs incurred in Belgium or elsewhere in the management of the holding in the company (Article 23(2)(.b)). (d)If he is a national of both or of either, the competent authorities of the Contracting States shall settle the matter by mutual agreement. 4. The competent authorities of States Parties may communicate directly with each other with a view to reaching agreement within the meaning of the preceding paragraphs and implementing the provisions of the Convention. 2. Where a Contracting State counts in the profits of an enterprise of that State and, accordingly, taxes profits on which an enterprise of the other Contracting State has been taxed in that other State, and the items so included include income, deductions, revenue or expenses which would have been charged to the enterprise of the first-mentioned State if the conditions created between the two enterprises had been as follows: Between independent enterprises, the competent authorities of the States Parties may hold consultations with a view to reaching agreement on the correction of profits or losses in both States Parties. The United Kingdom will maintain its double taxation rules with regard to dividends from abroad (Article 23(5)). 1. This Convention shall be without prejudice to the fiscal privileges accorded to members of diplomatic, permanent or consular posts in accordance with the general rules of international law or the provisions of special conventions.

4. Notwithstanding this Article, the Government of a State Party: a political subdivision or local authority resident thereof, the central bank of a Contracting State or any body (other than a capital agency) wholly owned by a Contracting State, a political subdivision or a local authority of a Contracting State shall apply, whether or not it is resident in that Contracting State, whether it is taxable there or not. The competent authorities of the States Parties may, by mutual agreement, designate any other governmental body to which this paragraph applies. For the purposes of this Article, we consider a natural person to be a tax resident of the United Kingdom and an additional country, although double taxation treaties may exist between two countries. Certain types of visitors to the UK receive special treatment under a double taxation treaty, e.B students, teachers or foreign government officials. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement all difficulties or doubts arising from the interpretation or application of the Convention. They may also consult each other to discuss measures to be taken to combat the misuse of the provisions of the Convention. .