1^er MAI 2006. - An Act to assent to the Convention between the Kingdom of Belgium and the Republic of Azerbaijan to avoid double taxation and to prevent tax evasion in respect of income and property taxes, signed in Brussels on 18 May 2004 (1)(2)

ALBERT II, King of the Belgians,
To all, present and to come, Hi.
The Chambers adopted and We sanction the following:
Article 1^er. This Act regulates a matter referred to in Article 77 of the Constitution.
Art. 2. The Convention between the Kingdom of Belgium and the Republic of Azerbaijan to avoid double taxation and to prevent tax evasion in respect of taxes on income and on fortune, signed in Brussels on 18 May 2004, will come out its full effect.
Promulgation of this law, let us order that it be clothed with the seal of the State and published by the Belgian Monitor.
Given in Brussels, 1^er May 2006.
ALBERT
By the King:
Minister of Foreign Affairs,
K. DE GUCHT
Minister of Finance,
D. REYNDERS
Seal of the state seal:
The Minister of Justice,
Ms. L. ONKELINX
____
Notes
(1) Session 2005-2006.
Senate.
Documents. - Bill tabled on 9 December 2005, No. 3-1478/1. Report, No. 3-1478/2.
Annales parliamentarians. - Discussion and voting. Session of February 9, 2006.
House of Representatives.
Documents. - Project transmitted by the Senate, No. 51-2275/1. Text adopted in plenary and subject to Royal Assent, No. 51-2275/2.
Annales parliamentarians. - Discussion and voting. Session of March 23, 2006.
(2) This Convention comes into force on 12 August 2006.

Convention between the Kingdom of Belgium and the Republic of Azerbaijan to avoid double taxation and to prevent tax evasion in respect of taxes on income and on fortune
The Government of the Kingdom of Belgium
and
The Government of the Republic of Azerbaijan,
Desiring to conclude a Convention to avoid double taxation and to prevent tax evasion in respect of income and property taxes, have agreed on the following provisions:
CHAPTER I^er. - Scope of the convention
Article 1^er
Target persons
This Convention applies to persons who are residents of a Contracting State or both Contracting States.
Article 2
Taxes targeted
1. This Convention applies to taxes on income and on property collected on behalf of a Contracting State, its political subdivisions, its territorial administrative subdivisions or its local authorities, irrespective of the system of perception.
2. The taxes on total income, total property, or income or property, including taxes on earnings from the alienation of movable or real estate property, taxes on the total amount of wages paid by companies, as well as taxes on surplus-values, are considered income and property taxes.
3. The current taxes to which this Convention applies include:
(a) with respect to Azerbaijan:
(i) tax on profits and certain incomes of legal persons ("the tax on profits and some income of legal persons");
(ii) the income tax on physical persons ("the income tax on physical persons");
(iii) the property tax ("the tax on property");
(iv) land tax ("the land tax"),
(hereinafter referred to as "azeri tax");
(b) with regard to Belgium:
(i) the tax of natural persons;
(ii) corporate tax;
(iii) corporation tax;
(iv) non-resident tax;
(v) the complementary contribution of crisis;
including pre-payments, additional cents to such taxes and pre-payments, and additional taxes to the tax of natural persons,
(hereinafter referred to as "the Belgian tax").
4. The Convention also applies to identical or similar taxes that would be established by either of the Contracting States after the date of signature of the Convention and that would add to or replace the existing taxes. The competent authorities of the Contracting States shall, at the end of each year, communicate the significant changes to their respective tax laws.
CHAPTER II. - Definitions
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) (i) the term "Azerbaijan" means the Republic of Azerbaijan; employed in a geographical sense, it designates the territory of the Republic of Azerbaijan, including the internal waters of the Republic of Azerbaijan, the sector of the Caspian Sea (Lac) belonging to the Republic of Azerbaijan and the air space located above the Republic of Azerbaijan, on which the sovereign rights and jurisdiction of the Republic of Azerbaijan may be exercised in respect of the subsoil, seabed and other natural resources,
(ii) the term "Belgium" means the Kingdom of Belgium; employed in a geographical sense, it designates the territory of the Kingdom of Belgium, including the territorial sea and the maritime areas and the airspace on which, in accordance with international law, the Kingdom of Belgium exercises sovereign rights or jurisdiction;
(b) the terms "a contracting State" and "the other contracting State" mean, according to the context, Belgium or Azerbaijan;
(c) the term "person" includes natural persons, societies and all other groups of persons;
(d) the term "society" means any corporation or entity that is considered to be a legal entity for purposes of taxation in the Contracting State of which it is a resident;
(e) the terms "company of a Contracting State" and "company of the other Contracting State" shall, respectively, designate a business operated by a resident of a Contracting State and a business operated by a resident of the other Contracting State;
(f) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise that is a resident of a Contracting State, except where the ship or aircraft is operated only between points in the other Contracting State;
(g) the term "competent authority" means:
(i) with respect to Azerbaijan, the Ministry of Taxes and the Ministry of Finance;
(ii) in respect of Belgium, the Minister of Finance or its authorized representative;
( h ) the term "national" means:
(i) any natural person who has the nationality of a Contracting State;
(ii) any legal person, partnership or association incorporated in accordance with the legislation in force in a Contracting State.
2. For the application of the Convention at any time by a Contracting State, any term or expression that is not defined therein shall, unless the context requires a different interpretation, the meaning assigned to it at that time by the law of that State in respect of the taxes to which the Convention applies, the meaning assigned to that term or expression by the tax law of that State in respect of the meaning assigned to it by the other branches of the law of that State.
Article 4
Resident
1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is subject to tax in that State, because of his domicile, residence, management seat, place of incorporation or any other criterion of a similar nature and also applies to that State as well as to all its political subdivisions, territorial administrative subdivisions or other criteria of that State. However, this term does not include persons who are subject to tax in that State only for income from sources located in that State or for the property located therein.
2. Where, according to the provisions of paragraph 1 of this article, a natural person is a resident of the two Contracting States, his or her situation shall be settled as follows:
(a) that person is considered to be a resident only of the State where the person has a permanent home; if it has a permanent home in both states, it is considered to be a resident only of the State with which its personal and economic ties are the narrowest (centre of vital interests);
(b) if the State where that person has the centre of its vital interests cannot be determined, or if it does not have a permanent home in any of the States, it is considered to be a resident only of the State where it normally resides;
(c) if the person normally stays in both States or if he or she does not normally stay in any of them, he or she is considered to be a resident only of the State of which he or she is a national;
(d) if the person possesses the nationality of the two States or has no nationality of any of them, the competent authorities of the Contracting States shall decide the question by mutual agreement.
3. When, according to the provisions of paragraph 1^er of this Article, a person, other than a natural person, is a resident of the two Contracting States, the competent authorities of the Contracting States shall endeavour to determine the matter by mutual agreement. In the absence of such an agreement, the said person shall not be considered a resident of any of the Contracting States for the purpose of benefiting from the benefits provided for in this Convention.
Article 5
Stable establishment
1. For the purposes of this Convention, the term "stable establishment" means a fixed business facility through which a company operates all or part of its business.
2. The term "stable establishment" includes:
(a) a steering seat,
(b) a branch,
(c) an office,
(d) a factory,
(e) a workshop, and
(f) a mine, oil or gas well, a career or any other place of extraction of natural resources.
3. (a) A construction or assembly site, including monitoring activities, is a permanent establishment only if its duration exceeds twelve months.
(b) A facility or structure used to explore natural resources is a permanent establishment only if exploration activities continue for more than 30 days within a period of any twelve months.
4. Notwithstanding the preceding provisions of this article, it is considered that there is no "stable establishment" if:
(a) the use of facilities for the sole purpose of storage, exposure or delivery of goods owned by the company;
(b) goods belonging to the undertaking are stored for storage, exposure or delivery purposes only;
(c) goods belonging to the enterprise are stored for the sole purpose of processing by another company;
(d) a fixed business facility is used for the sole purpose of purchasing goods or collecting information for the company;
(e) a fixed business facility is used for the sole purpose of carrying out any other preparatory or auxiliary activity for the enterprise;
(f) a fixed business facility shall be used only for the purpose of the cumulative year of activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed business facility resulting from this accumulated business shall be preparatory or auxiliary.
5. Notwithstanding the provisions of paragraphs 1^er and 2 of this Article, where a person - other than an agent enjoying an independent status to which paragraph 6 of this Article applies - shall act on behalf of a business and shall, in a Contracting State, have powers that it normally exercise in it to enter into contracts on behalf of the enterprise or retain a stock of goods belonging to that undertaking and sell such goods to other persons on behalf of the enterprise, that undertaking is considered to be
6. A business is not considered to have a permanent establishment in a Contracting State solely because it operates in it through a broker, a general commissioner or any other agent with an independent status, provided that such persons act within the ordinary framework of their business. However, where the agent's activities are performed exclusively or almost exclusively on behalf of the business, the agent is not considered an independent agent within the meaning of this paragraph.
7. The fact that a corporation that is a resident of a Contracting State controls or is controlled by a corporation that is a resident of the other Contracting State or that operates therein (either through a permanent establishment or not) is not sufficient in itself to make any of these companies a permanent establishment of the other.
CHAPTER III. - Income tax
Article 6
Real estate income
1. The income that a resident of a Contracting State derives from real property (including income from farms or forestry) located in the other Contracting State, is taxable in that other State.
2. The term "real property" has the meaning assigned to it by the law of the Contracting State in which the property is located. The term includes, in any case, accessories, dead or alive livestock of farms and forests, the rights to which the provisions of private law apply in respect of land ownership, the usufruct of real property and the rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources; ships, ships and aircraft are not considered real property.
3. The provisions of paragraph 1^er of this section shall apply to income derived from direct exploitation or enjoyment, lease or charter, and any other form of exploitation of real property.
4. The provisions of paragraphs 1^er and 3 of this section shall also apply to income derived from the real property of a business as well as to income from the real property used in the exercise of an independent profession.
Article 7
Business benefits
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 located therein. If the company operates in such a way, the profits of the company are taxable in the other State but only to the extent that they are attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3 of this Article, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment located therein, it shall be charged, in each Contracting State, to that permanent establishment the profits that it could have realized if it had constituted a separate undertaking carrying out identical or similar activities under identical or similar conditions and acting independently.
3. In order to determine the profits of a permanent establishment, the expenses set out for the purposes of this permanent establishment shall be deducted, including the executive expenses and general administrative expenses so exposed, either in the State where the permanent establishment is located, or elsewhere, with the exclusion of expenses, other than executive expenses and general administrative expenses, which, according to the law of that State, would not be admitted as a deduction in the head of State.
4. If it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of a distribution of the total profits of the enterprise between its various parties, no provision in paragraph 2 of this Article shall prevent that Contracting State from determining the taxable profits according to the distribution in use.
In the absence of regular accounting or other evidence to determine the amount of profits of a company of a Contracting State that is attributable to its permanent establishment located in the other State, the tax may, inter alia, be established in that other State in accordance with its own legislation, taking into account the normal profits of similar enterprises of the same State, engaging in the same activity or similar activities under identical or similar conditions.
However, the method adopted must be such that the result obtained is consistent with the principles contained in this article.
5. No profit is charged to a permanent establishment because it simply purchased goods for the company.
6. For the purposes of the preceding paragraphs, the benefits to be charged to the permanent establishment are determined annually on the same basis, unless there are valid and sufficient grounds to proceed otherwise.
7. Where profits include income elements treated separately in other articles of this Convention, the provisions of these articles are not affected by the provisions of this article.
Article 8
Maritime and air navigation
1. The profits of a company that is a resident of a Contracting State, derived from the operation, in international traffic, of ships or aircraft, shall be taxable only in the Contracting State of which that undertaking is a resident.
2. For the purposes of this section, benefits derived from the operation, in international traffic, of ships or aircraft include:
(a) profits from the rental of ships or aircraft, any armed and equipped, operated in international traffic and the occasional benefits from the naked hull rental of ships or aircraft operated in international traffic;
(b) profits derived from the use or lease of containers (including trailers and related equipment used for the transport of containers), provided that these benefits are complementary or incidental to the benefits to which the provisions of this Article are applicable.
3. The provisions of paragraphs 1^er and 2 of this section also apply to benefits derived from participation in a pool, a joint operation or an international operating organization.
Article 9
Associated companies
1. When:
(a) a business of a Contracting State directly or indirectly participates in the direction, control or capital of a business of the other Contracting State, or
(b) the same persons directly or indirectly participate in the direction, control or capital of a business of a Contracting State and a business of the other Contracting State,
and that, in both cases, both companies are, in their commercial or financial relations, bound by agreed or imposed conditions, that differ from those that would be agreed between independent companies, the profits that, without these conditions, would have been realized by one of the companies but could not be in fact because of these conditions, may be included in the profits of that undertaking and imposed accordingly.
2. When a Contracting State includes in the profits of a company of that State - and therefore imposes - profits on which a company of the other Contracting State has been imposed in that other State, and that the profits thus included are profits that would have been realized by the enterprise of the first State if the terms agreed between the two enterprises had been those that would have been agreed between independent enterprises, the other State shall make the adjustment that it considers appropriate of the tax To determine this adjustment, the other provisions of this Convention shall be taken into account and, if necessary, the competent authorities of the Contracting States shall consult.
Article 10
Dividends
1. Dividends paid by a corporation that is a resident of a Contracting State to a resident of the other Contracting State shall be taxable in that other State.
2. However, such dividends may also be taxed in the Contracting State of which the corporation paying the dividends is a resident, and according to the law 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:
(a) 5 per cent of the gross amount of the dividends if the beneficial owner is a corporation that holds, directly or indirectly, at least 30 per cent of the capital of the corporation that pays the dividends and that, on the date of payment of the dividends, has invested in the corporation that pays the dividends at least 500,000 US dollars;
(b) 5 per cent of the gross amount of the dividends if the beneficial owner is a corporation that, on the date of payment of the dividends, has invested in the corporation that pays the dividends an amount not less than US$ 10.000.000;
(c) 10 per cent of the gross amount of the dividends if the beneficial owner is a corporation that holds, directly or indirectly, at least 10 per cent of the capital of the corporation that pays the dividends and that, on the date of payment of the dividends, has invested in the corporation that pays the dividends at least $75,000;
(d) 15 per cent of the gross amount of dividends in all other cases.
This subsection does not affect the corporation's taxation of profits that are used to pay dividends.
3. The term "dividends" used in this article refers to income from shares, shares or benefits, shares of mine, share of founders or other share of beneficiaries with the exception of receivables, as well as incomes - even attributed in the form of interest - subject to the same tax regime as income from shares by the tax legislation of the State whose debiting society is a resident.
4. The provisions of paragraphs 1^er and 2 of this Article shall not apply where the beneficial owner of the dividends, a resident of a Contracting State, exercises in the other Contracting State whose dividend-paying corporation is a resident, either an industrial or commercial activity through a permanent establishment located therein or an independent occupation by means of a fixed base located therein, and that the dividend-generating interest is effectively connected to it. In this case, the provisions of Article 7 or Article 14, as appropriate, of this Convention shall apply.
5. Where a corporation that is a resident of a Contracting State derives from the profits or income of the other Contracting State, that other State may not collect any tax on the dividends paid by the corporation, except to the extent that such dividends are paid to a resident of that other State or to the extent that the dividend-generating interest is effectively connected to a permanent establishment or to a fixed base located in that other State, or prelever any
Article 11
Interest
1. Interest arising from a Contracting State and paid to a resident of the other Contracting State shall be taxable in that other State.
2. However, these interests are also taxable in the Contracting State in which they arise and according to the law 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.
3. Notwithstanding the provisions of paragraph 2 of this Article, interest shall be exempted from tax in the Contracting State from which it arises when it is:
(a) interest in commercial receivables - including those represented by commercial effects - resulting from the payment of goods, goods or services by companies in the future;
(b) interest paid by a loan or credit granted, guaranteed or insured by a Contracting State or a person acting on behalf of that Contracting State for the purpose of promoting exports;
(c) interest paid to the other Contracting State, one of its political subdivisions, territorial administrative subdivisions or local authorities or to an agency or agency of that State.
4. The term "interest" used in this section refers to the income of receivables of any kind, whether or not accompanied by mortgage guarantees or an interest clause in the debtor's profits, including income from public funds and borrowing obligations, including premiums and lots attached to these securities. However, this term does not include, within the meaning of this article, penalties for late payment or interest treated as dividends under Article 10, paragraph 3, of this Convention.
5. The provisions of paragraphs 1^er, 2 and 3 of this Article shall not apply where the beneficial owner of the interests, a resident of a Contracting State, carries on in the other Contracting State in which the interests arise, either an industrial or commercial activity through a permanent establishment located therein or an independent occupation by means of a fixed base located therein, and that the interest-generating debt is effectively connected to it. In this case, the provisions of Article 7 or Article 14, as appropriate, of this Convention shall apply.
6. Interest shall be deemed to arise from a Contracting State where the debtor is a resident of that State. However, where the debtor of interest, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment, or a fixed base, for which the debt giving rise to the payment of interest has been contracted and which bears the burden of such interests, these shall be deemed to arise from the State where the permanent establishment or fixed base is located.
7. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of interest, taking into account the debt for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.
8. The provisions of this Article shall not apply where the principal purpose or any of the principal purposes of any person concerned by the birth or assignment of the interest-generating receivable was to take advantage of the provisions of this Article through that birth or assignment.
Article 12
Claims
1. Royalties from a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State, if that resident is the beneficial owner of the property.
2. However, such royalties are also taxable in the Contracting State in which they arise and according to the law 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:
(a) 5 per cent of the gross amount of royalties paid as a result of copyright on literary or artistic work (including film films and films or tapes registered for radio or television); and
(b) 10 per cent of gross royalties in all other cases.
3. The term "debtedness" used in this article means the remuneration of any kind paid for the use or concession of the use of a copyright on a literary, artistic or scientific work, including film films and films or tapes registered for radio or television, a patent, a trademark or trade mark, a drawing or a model, a plan, a business line
4. The provisions of paragraphs 1^er and 2 of this Article shall not apply where the beneficial owner of the royalties, a resident of a Contracting State, exercises in the other Contracting State in which the royalties arise, either an industrial or commercial activity through a permanent establishment located therein, or an independent occupation by means of a fixed base located therein, and that the right or property that generates royalties is effectively connected to it. In this case, the provisions of Article 7 or Article 14, as appropriate, of this Convention shall apply.
5. The royalties shall be deemed to arise from a Contracting State when the debtor is a resident of that State. However, where the debtor of royalties, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment, or a fixed base, for which the contract giving rise to the payment of royalties has been concluded and which bears the charge of such royalties, these shall be deemed to be from the State where the permanent establishment, or the fixed base, is located.
6. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of royalties, taking into account the benefit for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.
7. The provisions of this section shall not apply where the principal purpose or purpose of any person concerned by the creation or assignment of royalty-generating rights was to take advantage of the provisions of this section through such creation or assignment.
Article 13
Capital gains
1. The gains derived by a resident of a Contracting State from the alienation of real property referred to in Article 6 of this Convention, and situated in the other Contracting State, shall be taxable in that other State.
2. The gains derived by a resident of a Contracting State from the alienation of shares, other than shares listed on a recognized stock exchange, which derive their value or the greater part of their value, directly or indirectly, of real property located in the other Contracting State, are taxable in that other State.
3. The gains from the alienation of movable property that are part of the assets of a permanent establishment that a business of a Contracting State has in the other Contracting State, or of movable property that belong to a fixed base of which a resident of a Contracting State disposes in the other Contracting State for the exercise of an independent profession, including such gains from the alienation of that permanent establishment (ully or with
4. Gains derived from the alienation of ships or aircraft operated in international traffic by an enterprise that is a resident of a Contracting State, or movable property assigned to the operation of such ships or aircraft, shall be taxable only in the Contracting State of which that undertaking is a resident.
5. Gains from the alienation of all property other than those referred to in paragraphs 1^er in 4 of this Article shall be taxable only in the Contracting State of which the assignor is a resident.
Article 14
Independent occupations
1. The income derived by a natural person who is a resident of a Contracting State from a liberal profession or other independent activities shall be taxable only in that State.
However, such income is also taxable in the other Contracting State if:
(a) that natural person stays in the other State for a period or periods exceeding a total of 183 days in any period of twelve months, but only to the extent that such income is attributable to the activities carried out in that other State; or
(b) that natural person has, in the other Contracting State, a fixed basis for the exercise of his or her activities, but only to the extent that such income is attributable to that fixed base.
2. The term "professional liberal" includes independent scientific, literary, artistic, educational or educational activities, as well as independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Article 15
Dependent professions
1. Subject to the provisions of Articles 16, 18, 19 and 20 of this Convention, wages, salaries and other similar remuneration that a resident of a Contracting State receives under an employee employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is exercised, the remuneration received as such is taxable in that other State.
2. Notwithstanding the provisions of paragraph 1^er of this Article, the remuneration of a resident of a Contracting State in respect of an employee employed in the other Contracting State shall be taxable only in the first State if:
(a) the beneficiary stays in the other State for a period or periods not exceeding a total of 183 days during any period of twelve months beginning or ending during the tax period under review, and
(b) compensation shall be paid by an employer or on behalf of an employer who is not a resident of the other State, and
(c) the pay charge is not borne by a permanent establishment or a fixed base that the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration received for an employee employed on board a ship or aircraft operated in international traffic by an enterprise that is a resident of a Contracting State may be taxed in the Contracting State of which that undertaking is a resident.
Article 16
Elevenths
1. The fortieth, attendance and other similar remuneration that a resident of a Contracting State receives as a member of the board of directors or of a similar body of a corporation that is a resident of the other Contracting State may be taxed in that other State.
The foregoing provision also applies to remuneration received because of the performance of functions which, under the legislation of the Contracting State whose company is a resident, are treated as functions of a nature similar to those exercised by a person referred to in that provision.
2. Compensation that a person referred to in subsection 1^er of this Article shall be paid by the corporation on the basis of the exercise of a day-to-day activity of direction or of a technical nature, and the remuneration that a resident of a Contracting State derives from his or her personal activity as a partner in a corporation other than a corporation by shares, which is a resident of the other Contracting State, shall be taxable in accordance with the provisions of Article 15 of this Convention, as if it were remuneration that was
Article 17
Artists and athletes
1. Notwithstanding the provisions of Articles 14 and 15 of this Convention, income derived by a resident of a Contracting State from his or her personal activities in the other Contracting State as an artist of the spectacle, such as a theatre, cinema, radio or television artist, or a musician, or as a sportsman, may be taxed in that other State.
2. Where the income of activities that an entertainer or a sportsperson exercises personally and in this capacity is attributed not to the artist or to the athlete himself but to another person, such income shall be taxable, notwithstanding the provisions of Articles 7, 14 and 15 of this Convention, in the Contracting State where the activities of the artist or athlete are carried out.
3. The provisions of paragraphs 1^er and 2 of this Article shall not apply to the income of the activities carried out in a Contracting State by artists or athletes if the stay in that State is financed for a large part by public funds of a Contracting State or of any of its political subdivisions, territorial administrative subdivisions or local authorities. In this case, income derived from these activities shall be taxable only in the latter Contracting State.
Article 18
Pensions
Subject to the provisions of Article 19, paragraph 2, of this Convention, pensions and other similar allowances, whether periodic or not, from a Contracting State and paid in respect of an employment prior to a resident of the other Contracting State, shall be taxable only in the Contracting State from which they arise. This provision also applies to pensions and allowances paid under a general regime organized by a Contracting State to supplement the benefits provided by its social legislation.
Article 19
Public functions
1. Salaries, salaries and other similar remuneration, other than pensions, paid by a Contracting State or any of its political subdivisions, territorial administrative subdivisions or local authorities to a natural person, for services rendered to that State or to that subdivision or community, shall be taxable only in that State.
However, such wages, salaries and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and if the natural person is a resident of that State who:
(i) has the nationality of that State, or
(ii) did not become a resident of that State for the sole purpose of rendering the services.
2. (a) Pensions paid by a Contracting State or any of its political subdivisions, territorial administrative subdivisions or local authorities, either directly or by debiting from funds that they have constituted, to a natural person, for services rendered to that State or to that subdivision or community, shall be taxable only in that State.
(b) However, such pensions shall be taxable only in the other Contracting State if the natural person is a resident of that State and has its nationality.
3. The provisions of Articles 15, 16, and 18 of this Convention shall apply to salaries, salaries and other similar remuneration paid for services rendered in the course of an industrial or commercial activity carried out by a Contracting State or any of its political subdivisions, territorial administrative subdivisions or local authorities.
Rule 20
Students
A student or trainee who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who is temporarily residing in the first State for the sole purpose of continuing his or her studies or training, is exempted in that State from the amounts received from sources outside that State to cover its costs of maintenance, study or training.
Article 21
Other income
1. The income elements of a resident of a Contracting State, wherever they arise, which are not dealt with in the preceding articles of this Convention shall be taxable only in that State.
2. The provisions of paragraph 1^er of this Article shall not apply to income, other than income derived from real property as defined in Article 6, paragraph 2, of this Convention, where the beneficiary of such income, resident of a Contracting State, carries on in the other Contracting State, either an industrial or commercial activity through a permanent establishment situated therein, or an independent occupation by means of a fixed base located therein, and that the income of the right-generating entity, In this case, the provisions of Article 7 or Article 14, as appropriate, of this Convention shall apply.
3. Notwithstanding the provisions of paragraphs 1^er and 2 of this article, the income elements of a resident of a Contracting State that are not dealt with in the preceding articles of this Convention and that come from the other Contracting State shall also be taxable in that other State if such elements are not imposed in the first State.
4. The provisions of this Article shall not apply where the principal purpose or any of the principal purposes of any person concerned by the creation or assignment of the income-generating rights was to take advantage of the provisions of this Article through such creation or assignment.
CHAPTER IV. - Imposition of fortune
Article 22
Fortune
1. The property constituted by real property referred to in Article 6 of this Convention, owned by a resident of a Contracting State and situated in the other Contracting State, shall be taxable in that other State.
2. The property constituted by movable property that is part of the asset of a permanent establishment that a business of a Contracting State has in the other Contracting State, or by movable property that is owned by a fixed base of which a resident of a Contracting State has in the other Contracting State for the exercise of an independent profession, is taxable in that other State.
3. The capital made by ships and aircraft operated in international traffic by an enterprise that is a resident of a Contracting State, as well as by movable property assigned to the operation of such ships or aircraft, shall be taxable only in the Contracting State of which that undertaking is a resident.
4. All other assets of a resident of a Contracting State shall be taxable only in that State.
CHAPTER V. - Method for narrowing double taxation
Article 23
Elimination of double taxation
1. For Azerbaijan, double taxation is avoided as follows:
(a) where a resident of Azerbaijan receives income or owns property in the Kingdom of Belgium that, in accordance with the provisions of this Convention, is taxable in the Kingdom of Belgium, the amount of tax paid on such income or fortune in the Kingdom of Belgium is deducted from the tax dependant on that person in Azerbaijan because of such income or fortune. This deduction may not, however, exceed the amount of the azeri tax in respect of such income or property, calculated in accordance with the legislation and tax regulations of Azerbaijan;
(b) where, in accordance with any provision of the Convention, the income that a resident of Azerbaijan receives or the wealth that he owns is tax-free in Azerbaijan, Azerbaijan may nevertheless, in calculating the amount of the tax on the rest of the income or fortune of that resident, take into account the exempt income or fortune.
2. With regard to Belgium, double taxation is avoided as follows:
(a) When a Belgian resident receives income or owns assets that are taxed in Azerbaijan in accordance with the provisions of this Convention, with the exception of dividends, interest and royalties, Belgium exempts from tax such income or property, but it may, in order to calculate the amount of its taxes on the rest of the income or fortune of that resident, apply the same rate as if the income or assets had not been exempted.
(b) Subject to the provisions of Belgian law relating to the imputation on Belgian tax of taxes paid abroad, where a Belgian resident receives income elements that are included in his or her total income subject to Belgian tax and which consist of dividends not exempted from Belgian tax under (c) below, in interest or in royalties, the azeri tax collected on these revenues is charged to Belgian tax.
(c) The dividends that a company that is a resident of Belgium receives from a company that is a resident of Azerbaijan are exempted from the tax of companies in Belgium, under the conditions and limits provided by Belgian legislation.
(d) Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in Azerbaijan have been effectively deducted from the profits of that undertaking for its taxation in Belgium, the exemption provided for in (a) does not apply in Belgium to the profits of other taxable periods attributable to that establishment, to the extent that such profits have also been exempted from tax in Azerbaijan due to their compensation with
CHAPTER VI. - Special provisions
Article 24
Non-discrimination
1. Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or obligation relating thereto, which is other or heavier than those to which nationals of that other Contracting State are or may be subject to the same situation, particularly in respect of the residence. This provision also applies, notwithstanding the provisions of section 1^er of this Convention, to persons who are not residents of a Contracting State or both Contracting States.
2. Stateless persons who are residents of a Contracting State shall not be subject in either Contracting State to any taxation or relative obligation that is other or heavier than those to which nationals of the State concerned are or may be subject in the same situation.
3. The imposition of a permanent establishment that a business of a Contracting State has in the other Contracting State is not established in that other State in a less favourable manner than the taxation of the enterprises of that other State that exercise the same activity. This provision shall not be construed as requiring a Contracting State to grant personal deductions, deductions and tax reductions to the residents of the other Contracting State on the basis of the situation or family expenses that it grants to its own residents.
4. Unless the provisions of Article 9, paragraph 1^er, Article 11, paragraph 7, or Article 12, paragraph 6, of this Convention shall not apply, any interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible, for the determination of the taxable profits of that undertaking, under the same conditions as if they had been paid to a resident of the first Contracting State. Similarly, the debts of an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible, for the determination of the taxable fortune of that undertaking, on the same basis as if they had been contracted to a resident of the first Contracting State.
5. The undertakings of a Contracting State, whose capital is wholly or partly, directly or indirectly, held or controlled by one or more residents of the other Contracting State, shall not be subject in the first State to any taxation or obligation relating thereto, which is other or heavier than those to which the other similar enterprises of the first State are or may be subject.
6. The provisions of this Article shall apply notwithstanding the provisions of Article 2 of this Convention, to taxes of any kind or denomination.
Rule 25
Friendly procedure
1. Where a person considers that the measures taken by a Contracting State or by the two Contracting States shall result in or result in taxation not in accordance with the provisions of this Convention, the person may, independently of the remedies provided by the domestic law of those States, submit his case to the competent authority of the Contracting State of which the person is a resident or, if the case falls under Article 24, paragraph 1^erof this Convention, to that of the Contracting State of which it has nationality. The case shall be submitted within three years after the first notification of the measure that results in taxation not in conformity with the provisions of the Convention.
2. The competent authority shall endeavour, if the request appears to it to be founded and if it is not itself able to make a satisfactory solution to it, to resolve the case by amicable agreement with the competent authority of the other Contracting State, with a view to avoiding taxation not in conformity with the Convention. The agreement shall be applied irrespective of the time limits provided by the domestic law of the Contracting States.
3. The competent authorities of the Contracting States shall endeavour, by mutual agreement, to resolve the difficulties or to dispel the doubts to which the interpretation or application of the Convention may take place.
4. The competent authorities of the Contracting States shall agree on the administrative measures necessary for the implementation of the provisions of the Convention and in particular on the justifications to be provided by the residents of each Contracting State to benefit in the other State from the exemptions or tax reductions provided for in the Convention.
5. The competent authorities of the Contracting States shall communicate directly with each other for the purposes of the Convention.
Rule 26
Exchange of information
1. The competent authorities of the Contracting States shall exchange the appropriate information to implement the provisions of this Convention or those of the domestic legislation of the Contracting States relating to the taxes covered by the Convention to the extent that the taxation it provides is not contrary to the Convention, in particular in order to prevent fraud and to facilitate the enforcement of the legal provisions to combat tax evasion. The exchange of information is not restricted by section 1^er of this Convention. The information received by a Contracting State shall be kept secret in the same manner as the information obtained under the domestic legislation of that State and shall only be communicated to the persons or authorities (including the courts and administrative bodies) concerned by the establishment or collection of the taxes referred to in the Convention, by the procedures or prosecutions relating to such taxes, or by the decisions on remedies relating to such taxes. These individuals or authorities only use this information for these purposes. They may report this information at public court hearings or in judgments.
2. The provisions of paragraph 1^er of this Article shall in no case be construed as imposing on a Contracting State the obligation:
(a) take administrative measures derogating from its legislation, administrative practice or those of the other Contracting State;
(b) provide information that could not be obtained on the basis of its legislation or in the course of its normal administrative practice or those of the other Contracting State;
(c) provide information that would reveal a commercial, industrial, professional or commercial secret or information that would be contrary to public order.
Rule 27
Recovery assistance
1. The Contracting States shall provide mutual assistance and assistance to notify and recover the taxes covered by this Convention as well as any additional, increments, interests, fees and fines without a criminal nature relating to such taxes where such tax claims are payable and are no longer subject to appeal under the laws or regulations of the requesting State for assistance.
2. Unless otherwise provided by the Convention, the requested State shall notify and recover the tax claims of the requesting State in accordance with the legislation and administrative practice applicable to the notification and recovery of its own tax claims.
3. The requested State is not obliged to comply with the request of the requesting State if the requesting State has not exhausted all means of recovering its tax debt on its own territory.
4. The request for assistance to recover a tax debt is supported:
(a) an official copy of the title allowing execution in the requesting State;
(b) an official copy of any other document required in the requesting State for recovery; and
(c) where appropriate, a certified copy of any decision made in force by an administrative body or tribunal.
5. The title allowing execution in the requesting State produces the same effects in the requested State.
6. Issues relating to the limitation period of tax debt are governed exclusively by the legislation of the requesting State.
7. The acts of recovery carried out by the requested State following a request for assistance and which, according to the law of that State, would have the effect of suspending or interrupting the limitation period have the same effect under the law of the requesting State. The requested State shall inform the requesting State of the measures taken to that end.
8. Tax claims for the recovery of which assistance is requested do not enjoy any privilege in the requested State.
9. The requested State is not required to apply means of enforcement which are not authorized by the legal or regulatory provisions of the requesting State.
10. The provisions of Article 26, paragraph 1^erof this Convention shall also apply to any information brought, pursuant to this Article, to the knowledge of the competent authority of a Contracting State.
11. With regard to the tax claims of a Contracting State that are the subject of an appeal or are still subject to an appeal, the competent authority of that Contracting State may, for the safeguard of its rights, request the competent authority of the other Contracting State to take the precautionary measures provided for in the legislation of that Contracting State. The provisions of the preceding paragraphs of this article shall apply mutatis mutandis to such measures.
12. The competent authorities of the Contracting States shall agree to establish the modalities for the transfer of the sums recovered by the requested State on behalf of the requesting State.
Rule 28
Members of diplomatic missions and consular posts
The provisions of this Convention shall not affect the tax privileges enjoyed by members of diplomatic missions and consular posts under either the general rules of international law or the provisions of special agreements.
CHAPTER VII. - Final provisions
Rule 29
Entry into force
1. Each Contracting State shall notify the other Contracting State of the fulfilment of the procedures required by its legislation for the entry into force of this Convention. The Convention shall enter into force on the date of receipt of the second notification.
2. The provisions of the Convention shall apply:
(a) taxes due to the source on income awarded or paid from 1^er January of the year immediately following that of the entry into force of the Convention;
(b) other taxes on incomes of taxable periods ending on or after December 31 of the year immediately following that of the entry into force of the Convention;
(c) capital taxes on assets existing as at 1^er January of any year after that of the entry into force of the Convention.
Rule 30
Denunciation
This Convention shall remain in force as long as it has not been denounced by a Contracting State, but each of the Contracting States may, until 30 June inclusive of any calendar year from the fifth year following that of the entry into force, denounce it, in writing and through diplomatic channels, to the other Contracting State. In case of denunciation before 1^er July of such a year, the Convention will last apply:
(a) taxes due to the source on the income awarded or paid by December 31 of the year of the denunciation;
(b) other taxes on taxable period income ending before December 31 of the year immediately following that of the denunciation;
(c) capital taxes on assets existing as at 1^er January of the year of denunciation.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Convention.
Done at.Brussels, on 18 May 2004, in duplicate, in Dutch, French, Azeri and English languages, the four texts being equally authentic. The English language text will prevail in the event of a discrepancy between the texts.

PROTOCOLE
At the time of the signing of the Convention between the Kingdom of Belgium and the Republic of Azerbaijan to avoid double taxation and to prevent tax evasion in respect of income and capital taxes, the undersigned have agreed on the following provisions which are an integral part of the Convention.
1. Ad article 4, paragraph 3:
Where a person, other than a natural person, is a resident of the two Contracting States and the competent authorities of the Contracting States shall endeavour to settle his or her situation by mutual agreement in accordance with the provisions of Article 4, paragraph 3, they shall take into account such elements as the effective management seat, the place where that person was constituted, the place where he or she is registered for taxation purposes and any other relevant element.
2. Ad article 7, paragraphs 1^er and 2:
The profits derived from the sale of goods of an identical or similar nature to those sold through a permanent establishment, or other commercial activities of an identical or similar nature to those carried out through a permanent establishment, may be considered to be attributable to that permanent establishment if it is proven that this operation took place in order to avoid taxation in the State where the permanent establishment is located.
In the case of contracts for the study, supply, installation or construction of industrial, commercial or scientific premises or public works, the profits attributable to a permanent establishment located in a Contracting State through which an enterprise of the other Contracting State exercises its activity shall be determined only on the basis of the part of the contract which is actually executed by the permanent establishment in the Contracting State in which it is located.
3. Ad article 12, paragraph 3:
For the purposes of Article 12, paragraph 3, of the Convention, no remuneration shall be deemed to be paid for information relating to industrial, commercial or scientific experience, remuneration paid for assistance or technical services, which shall be taxable in accordance with the provisions of Article 7 or Article 14, as the case may be, of this Convention.
4. Ad article 13, paragraph 2:
Subsection 2 does not apply where the gains referred to in this subsection are obtained on the occasion of a restructuring of the corporation, a merger, split or similar operation.
For the purposes of paragraph 2, it is understood that gains arising from the alienation of shares shall be taxable in a Contracting State only to the extent that the value of such shares comes directly or indirectly from real property located in that State.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Protocol.
Done in Brussels on 18 May 2004, in duplicate, in Dutch, French, Azeri and English, the four texts being equally authentic. The English language text will prevail in the event of a discrepancy between the texts.