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Law Approving The Convention Between The Kingdom Of Belgium And Hong Kong Of The People's Republic Of China Special Administrative Region For The Avoidance Of Double Taxation And Fiscal Evasion With Respect To Taxes On The Rev

Original Language Title: Loi portant assentiment à la Convention entre le Royaume de Belgique et la Région administrative spéciale de Hong Kong de la République populaire de Chine tendant à éviter la double imposition et à prévenir l'évasion fiscale en matière d'impôts sur le rev

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13 SEPTEMBER 2004. - An Act to assent to the Convention between the Kingdom of Belgium and the Hong Kong Special Administrative Region of the People's Republic of China to avoid double taxation and to prevent tax evasion in respect of income and capital taxes, and the Protocol, signed in Hong Kong on 10 December 2003 (1) (2)



ALBERT II, King of the Belgians,
To all, present and to come, Hi.
The Chambers adopted and We sanction the following:
Article 1er. This Act regulates a matter referred to in Article 77 of the Constitution.
Art. 2. The Convention between the Kingdom of Belgium and the Hong Kong Special Administrative Region of the People's Republic of China to avoid double taxation and to prevent tax evasion in respect of taxes on income and property, and the Protocol, signed in Hong Kong on 10 December 2003, will come out their full and 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 Kos, September 13, 2004.
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
____
Note
(1) Session 2003-2004.
Senate:
Parliamentary documents. - Bill, tabled on 28 April 2004, No. 3-660/1. - Report, number 3-660/2.
Annales parliamentarians. - Discussion and voting. Session of May 13, 2004.
House of Representatives:
Parliamentary documents. - Project transmitted by the Senate, No. 51-1132/1. Text adopted in plenary and subject to Royal Assent, No. 51-1132/2.
Annales parliamentarians. - Discussion and voting. Session of June 24, 2004.
(2) This Convention comes into force on 7 October 2004.
TRADUCTION
Convention between the Kingdom of Belgium and the Hong Kong Special Administrative Region of the People's Republic of China to avoid double taxation and to prevent tax evasion in respect of income and fortune taxes
The Government of the Kingdom of Belgium
and
The Government of the Hong Kong Special Administrative Region of the People ' s Republic of China,
Desirous to conclude a Convention to avoid double taxation and to prevent tax evasion in respect of income and wealth taxes,
The following provisions were agreed:
CHAPTER Ier. - Scope of the convention
Article 1er
Target persons
This Convention applies to persons who are residents of a Contracting Party or both Contracting Parties.
Article 2
Taxes targeted
1. This Convention applies to taxes on income and on property collected by a Contracting Party, its political subdivisions or 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 the Convention applies are:
(a) with respect to the Hong Kong Special Administrative Region:
(i) profits tax ("tax profits");
(ii) wage tax ("tax salaries");
(iii) the property tax ("tax property");
whether or not they are perceived under individual taxation;
(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 and, subject to section 3, paragraph 2, additional taxes and pre-payments.
4. The Convention also applies to identical or analogous taxes that would be established after the date of signature of the Convention and that would be in addition to or replace existing taxes, as well as to other taxes covered by the provisions of paragraph 2 that a Contracting Party may establish in the future. The competent authorities of the Contracting Parties shall communicate the significant changes to their respective tax laws.
5. Current taxes, as well as taxes established after the date of signing of the Convention, are referred to as "Hong Kong Special Administrative Region tax" or "Belgian tax".
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 "Hong Kong Special Administrative Region" means the Hong Kong Special Administrative Region of the People's Republic of China; employed in a geographical sense, it designates the land and the sea within the boundaries of the Hong Kong Special Administrative Region, including the island of Hong Kong, Kowloon, the New Territories and the waters of Hong Kong;
(ii) the term "Belgium" means the Kingdom of Belgium; Used in a geographical sense, it designates the territory of the Kingdom of Belgium, including the territorial sea and the maritime areas on which, in accordance with international law, the Kingdom of Belgium exercises sovereign rights with regard to the exploration and exploitation of the natural resources of the soil and the basement of the sea and the underlying waters;
(b) the terms "activity", in relation to a business, and "business" include the exercise of liberal professions or other independent activities;
(c) the term "corporate" means any corporation, partnership or other entity that is considered to be a corporation for taxation purposes in the Contracting Party of which it is a resident;
(d) the term "competent authority" means:
(i) in respect of the Hong Kong Special Administrative Region, the Commissioner of Inland Revenue or its authorized representative, or any person or body authorized to perform functions that may currently be performed by the Commissioner or similar functions;
(ii) in respect of Belgium, the Minister of Finance or its authorized representative;
(e) the term "Contracting Party" means, depending on the context, the Hong Kong Special Administrative Region or Belgium;
(f) the term "company" applies to the exercise of any business or business;
(g) the terms "company of a Contracting Party" and "company of the other Contracting Party" mean, respectively, a business operated by a resident of a Contracting Party and a business operated by a resident of the other Contracting Party;
(h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting Party, except where the ship or aircraft is operated only between points in the other Contracting Party;
(i) the term "person" includes natural persons, societies and all other groups of persons and, with respect to the Hong Kong Special Administrative Region, includes a succession, trust and partnership.
2. In the Convention, the terms "Hong Kong Special Administrative Region tax" and "Belgian tax" do not include penalizations or interest collected in accordance with the legislation in force in either of the Contracting Parties concerning the taxes to which the Convention applies under Article 2.
3. For the purposes of the provisions of the Convention at any time by a Contracting Party, 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 right in force in that Party in respect of the taxes to which the Convention applies, the meaning assigned to that term or expression by the tax law in force in that Party in respect of the meaning assigned to it by the other branches of the law in force.
Article 4
Resident
1. For the purposes of this Convention, the term "resident of a Contracting Party" means any person who, under the legislation in force in that Party, is subject to tax in that Party, because of its domicile, residence, management seat or place of incorporation or any other similar criteria, and also applies to that Party as well as to all its political subdivisions or local authorities. However, this term does not include persons who are subject to tax in that Party only for income from sources located in that Party or for the property located therein.
2. When, according to the provisions of paragraph 1erera natural person is a resident of the two Contracting Parties, and the situation is resolved as follows:
(a) that person is considered to be a resident only of the Party where the person has a permanent home; if it has a permanent home in both Parties, it is considered to be a resident only of the Party with which its personal and economic ties are the narrowest ("the centre of vital interests");
(b) if the Party in which the person has the centre of its vital interests cannot be determined, or if the person has a permanent home in any of the Parties, the person shall be considered to be a resident only of the Party in which the person normally resides;
(c) if the person normally stays in both Parties or if he or she does not normally stay in any of them, the competent authorities of the Contracting Parties shall decide the matter by mutual agreement.
3. When, according to the provisions of paragraph 1erer, a person other than a natural person is a resident of both Contracting Parties and is considered to be a resident only of the Party where its effective management seat is located.
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;
(f) a mine, oil or gas well, a quarry or any other place of extraction of natural resources; and
(g) a construction, assembly or dredging site for a period exceeding six months in any twelve-month period.
3. A company is considered to have a permanent establishment in a Contracting Party and to carry on an activity through that permanent establishment if:
(a) the Party shall, for more than six months in any twelve-month period, carry out monitoring activities in relation to a construction, assembly or dredging site undertaken in that Party; or
(b) it provides services, including consultancy services, through employees or other personnel engaged by it for that purpose, but only where such activities continue in the territory of that Party for one or more periods representing a total of more than six months within any period of 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 owned by the company 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 business;
(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 for the purposes 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 the cumulative operation shall be preparatory or auxiliary.
5. Notwithstanding the provisions of paragraphs 1er and 2, a person other than an agent enjoying an independent status to which paragraph 6 applies which acts in a Contracting Party for a business of the other Contracting Party is considered to be a permanent establishment of that undertaking in the first Party if:
(a) that person shall have the authority in that Party, that he or she habitually exercises, to enter into contracts on behalf of the undertaking, unless the activities of that person are limited to the purchase of goods for the enterprise or to the activities listed in paragraph 4 and that, if carried out in a fixed business facility, would not make that fixed business facility a permanent establishment within the meaning of that paragraph; or
(b) a stock of goods owned by the company, by which the person usually executes orders on behalf of the enterprise, is stored in that Party.
6. A business is not considered to have a permanent establishment in a Contracting Party solely because it operates in it through a broker, general commissioner or any other agent with an independent status, provided that such persons act within the ordinary framework of their business.
7. The fact that a corporation that is a resident of a Contracting Party controls or is controlled by a corporation that is a resident of the other Contracting Party 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 derived by a resident of a Contracting Party from real property (including income from agricultural or forestry) located in the other Contracting Party shall be taxable in that other Party.
2. The term "real property" has the meaning assigned to it by the law in force in the Contracting Party where the property is located. The term includes in any case: accessories, dead or alive livestock of farms and forestry, 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 exploration or exploitation of mineral deposits, quarries, sources and other natural resources; ships, ships and aircraft are not considered real property.
3. The provisions of paragraph 1erer applies to income derived from direct exploitation or enjoyment, lease or charter, as well as any other form of exploitation of real property.
4. All property or rights referred to in paragraph 2 are considered to be located where land, wood on foot, mineral deposits, quarries, sources or natural resources are located, as appropriate, or where exploration or exploitation may take place.
5. The provisions of paragraphs 1er, 3 and 4 also apply to income from real property of a business.
Article 7
Business benefits
1. The profits of a business of a Contracting Party shall be taxable only in that Party, unless the undertaking carries out its activity in the other Contracting Party through a permanent establishment located therein. If the business operates in such a way, the profits of the enterprise are taxable in the other Party but only to the extent that they are attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting Party carries on business in the other Contracting Party through a permanent establishment located therein, it shall be charged, in each Contracting Party, 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 dealing with the enterprise of which it constitutes a permanent establishment with
3. In order to determine the profits of a permanent establishment, deductions are made for the expenses of the enterprise that are exposed for the purposes of the permanent establishment (including management costs and general administrative expenses so exposed), either in the Contracting Party where the permanent establishment is located or elsewhere. No deduction is allowed for amounts that would, if any, be paid (to other securities than the reimbursement of costs incurred) by the permanent establishment at the company's central office or at any of its offices, such as royalties, fees or other similar payments, for the use of patents or other fees, or as a commission, for specific services rendered or for a financial activity, or, except in the case of a loan as Similarly, in the calculation of the profits of a permanent establishment, there shall be no account of the amounts (other than the reimbursement of costs incurred) carried by the permanent establishment at the rate of the central office of the enterprise or of any of its other offices, such as royalties, fees or similar payments, for the use of patents or other fees, or as a commission for specific services rendered or for any management activity or
4. Nothing in paragraph 2 prevents a Contracting Party from determining the profits attributable to a permanent establishment on the basis of a distribution of the total profits of the undertaking between its various parties, or on the basis of other methods that may be prescribed by the legislation of that Party; the method thus adopted must, however, 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. 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.
7. 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.
Article 8
Maritime and air navigation
1. The profits derived by an enterprise of a Contracting Party from the operation, in international traffic, of ships or aircraft shall be taxable only in that Party.
2. The provisions of paragraph 1erer also applies to benefits derived from participation in a pool, a joint operation or an international operating organization.
3. For the purposes of this section, benefits derived from the operation, in international traffic, of ships or aircraft include:
(a) gross revenues and revenues derived from the operation of ships or aircraft for the carriage in international traffic of passengers, animals, goods, mail or goods, including:
(i) income from the company's lease of ships or aircraft, armed and equipped, used in international traffic;
(ii) revenues derived by the company from the sale of tickets and other similar documents and from the provision of services related to such carriage for the company itself or for any other business;
(iii) the interest of funds directly related to the international traffic operation of ships or aircraft;
(b) profits derived from the company's bare hull lease of ships or aircraft operated in international traffic, where such lease constitutes an occasional source of income for that undertaking;
(c) the profits from the rental of containers by the company, when this rental is complementary or incidental to its operations in international traffic.
Article 9
Associated companies
1. When:
(a) a business of a Contracting Party shall participate directly or indirectly in the direction, control or capital of a business of the other Contracting Party, or
(b) the same persons directly or indirectly participate in the direction, control or capital of a business of a Contracting Party and a business of the other Contracting Party,
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. Where a Contracting Party includes in the profits of a business of that Party and therefore imposes on it profits on which a business of the other Contracting Party has been imposed in that other Party, and the profits thus included are profits that would have been realized by the enterprise of the first Party if the terms agreed between the two undertakings had been those that would have been agreed between independent undertakings, the other Party shall make the adjustment that it considers appropriate. To determine this adjustment, the other provisions of this Convention shall be taken into account and, if necessary, the competent authorities of the Contracting Parties shall consult.
Article 10
Dividends
1. Dividends paid by a corporation that is a resident of a Contracting Party to a resident of the other Contracting Party shall be taxable in that other Party.
2. However, such dividends may also be taxed in the Contracting Party whose dividend-paying corporation is a resident, and according to the legislation in force in that Party, but if the beneficial owner of the dividends is a resident of the other Contracting Party, the tax so charged shall not exceed:
(a) 5 per cent of the gross amount of dividends if the beneficial owner is a corporation that holds directly at least 10 per cent of the capital of the corporation that pays the dividends;
(b) 15% of the gross amount of dividends in all other cases.
Notwithstanding the preceding provisions of this paragraph, dividends shall not be taxable in the Contracting Party of which the corporation paying the dividends is a resident if the beneficial owner of the dividends is a corporation that is a resident of the other Party and that, at the time of the payment of the dividends, holds for an uninterrupted period of at least twelve months, shares that directly represent at least 25% of the capital of the corporation paying the dividends.
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 means income from shares and other incomes assimilated to income from shares by the tax legislation in force in the Contracting Party whose distribution or debiting corporation is a resident.
4. The provisions of paragraphs 1er and 2 shall not apply where the beneficial owner of the dividends, a resident of a Contracting Party, exercises in the other Contracting Party whose dividend-paying corporation is a resident, a business activity through a permanent establishment located therein and that the dividend-generating interest is effectively connected to it. In this case, the provisions of Article 7 shall apply.
5. Where a corporation that is a resident of a Contracting Party derives from the profits or revenues of the other Contracting Party, that other Party 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 Party or to the extent that the income-generating interest of the dividends is actually connected to a permanent establishment located in that other Party, or collect any tax,
Article 11
Interest
1. Interest arising from a Contracting Party and paid to a resident of the other Contracting Party shall be taxable in that other Party.
2. However, these interests are also taxable in the Contracting Party from which they arise and according to the legislation in force in that Party, but if the beneficial owner of the interest is a resident of the other Contracting Party, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2, interest shall be exempted from tax in the Contracting Party from which it arises when it is:
(a) interest in commercial receivables, including those that are represented by trade effects resulting from the payment of goods, products or services by companies in the future;
(b) interest paid on the basis of a loan or credit granted, guaranteed or insured under a regime organized by a Contracting Party, one of its political subdivisions or one of its local authorities to promote exports;
(c) interest in receivables or loans of any kind, not represented by bearer securities, paid to bank companies;
(d) interest in deposits of money made by a business with a banking business;
(e) of interest paid to the other Contracting Party or to any of its political subdivisions or local authorities.
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 bonds of borrowing, and the premiums and lots attached to these securities. However, this term does not include, within the meaning of this section, penalties for late payment or interest treated as dividends under section 10, paragraph 3.
5. The provisions of paragraphs 1er, 2 and 3 shall not apply where the beneficial owner of the interest, a resident of a Contracting Party, carries on in the other Contracting Party in which the interest arises, an enterprise activity through a permanent establishment located therein, and that the interest-generating debt is effectively linked to it. In this case, the provisions of Article 7 shall apply.
6. Interest shall be deemed to arise from a Contracting Party where the debtor is a resident of that Party. However, where the debtor of interest, whether or not a resident of a Contracting Party, has in a Contracting Party a permanent establishment for which the debt giving rise to the payment of interest has been contracted and which bears the burden of such interest, such interest shall be deemed to be from the Party where the permanent establishment 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 exceeds, for any reason, the amount of interest normally 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 according to the legislation in force in each Contracting Party and taking into account the other provisions of this Convention.
Article 12
Claims
1. Royalties from a Contracting Party and paid to a resident of the other Contracting Party shall be taxable in that other Party.
2. However, these royalties are also taxable in the Contracting Party from which they arise and according to the legislation in force in that Party, but if the beneficial owner of the royalties is a resident of the other Contracting Party, the tax so charged shall not exceed 5 per cent of the gross amount of the royalties.
3. The term " royalties" 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, an industrial process or a secret line
4. The provisions of paragraphs 1er and 2 shall not apply where the beneficial owner of the royalties, a resident of a Contracting Party, carries on in the other Contracting Party from which the royalties arise a business activity through a permanent establishment located therein and that the right or property that generates royalties is effectively connected to it. In this case, the provisions of Article 7 shall apply.
5. Royalties shall be deemed to arise from a Contracting Party where the debtor is a resident of that Party. However, where the debtor of royalties, whether or not a resident of a Contracting Party, has in a Contracting Party a permanent establishment for which the contract giving rise to the payment of royalties has been concluded and which bears the charge of such royalties, such royalties shall be deemed to be from the Party where the permanent establishment 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 exceeds, for any reason, the amount normally agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section shall apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable according to the legislation in force in each Contracting Party and taking into account the other provisions of this Convention.
Article 13
Capital gains
1. The gains derived by a resident of a Contracting Party from the alienation of real property referred to in Article 6 and situated in the other Contracting Party shall be taxable in that other Party.
2. Gains arising from the alienation of movable property that are part of the assets of a permanent establishment that a business of a Contracting Party has in the other Contracting Party, including such gains arising from the alienation of that permanent establishment (on or with the enterprise as a whole), may be taxed in that other Party.
3. Any gains derived by an enterprise of a Contracting Party from the alienation of ships or aircraft operated in international traffic or of movable property assigned to the operation of such vessels or aircraft shall be taxable only in that Contracting Party.
4. The gains derived by a resident of a Contracting Party from the alienation of shares of a corporation of which more than 50% of the value comes directly or indirectly from real property located in the other Contracting Party are taxable in that other Party. However, this subsection does not apply to gains from alienation:
(a) shares that are listed on a recognized stock market of one of the Parties; or
(b) shares sold or exchanged as part of a reorganization of a corporation, a merger, split or similar operation; or
(c) shares that derive more than 50% from their real property value in which the corporation operates.
5. Gains from the alienation of all property other than those referred to in paragraphs 1er, 2, 3 and 4 shall be taxable only in the Contracting Party of which the assignor is a resident.
Article 14
Employee earnings
1. Subject to the provisions of Articles 15, 17, and 18, wages, salaries and other similar remuneration that a resident of a Contracting Party receives for an employee employment shall be taxable only in that Party, unless the employment is exercised in the other Contracting Party. If the employment is exercised, the remuneration received in that capacity is taxable in that other Party.
2. Notwithstanding the provisions of paragraph 1ererthe remuneration of a resident of a Contracting Party in respect of an employee employed in the other Contracting Party shall be taxable only in the first Party if:
(a) the beneficiary stays in the other Party for a period or periods not exceeding a total of 183 days for any twelve-month period beginning or ending during the tax period under review, and
(b) remuneration shall be paid by an employer or on behalf of an employer who is not a resident of the other Party, and
(c) the pay charge is not borne by a permanent establishment that the employer has in the other Party, and
(d) remuneration shall be taxable in the first Party in accordance with the legislation in force in that Party.
3. Notwithstanding the preceding paragraphs of this Article, remuneration received for an employee employed on board a ship or aircraft operated in international traffic by an enterprise of a Contracting Party shall be taxable in that Party.
Article 15
Elevenths
1. The fortieth, presence tokens and other similar remuneration that a resident of a Contracting Party 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 Party shall be taxable in that other Party.
2. Compensation that a person referred to in subsection 1erer a corporation that is a resident of a Contracting Party because of the exercise of a day-to-day direction or technical, commercial or financial activity shall be taxable in accordance with the provisions of Article 14, as if it were remuneration that an employee derives from an employee's employment and as if the employer were the corporation.
Article 16
Artists and athletes
1. Notwithstanding the provisions of Articles 7 and 14, income derived by a resident of a Contracting Party from his or her personal activities carried out in the other Contracting Party as an artist of the show, such as a theatre, cinema, radio or television artist, or a musician, or as a sportsman, may be taxed in that other Party.
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 and 14, in the Contracting Party where the activities of the artist or athlete are carried out.
Article 17
Pensions and rents
1. Subject to the provisions of Article 18, paragraph 2, pensions and other similar remuneration, paid to a resident of a Contracting Party for an earlier employment, and annuities, shall be taxable in the Contracting Party from which they arise. This provision also applies to pensions and other similar remuneration paid by a Contracting Party in accordance with the social legislation in force in that Party or a general regime in force in that Party with a view to supplementing the benefits provided by that social legislation.
2. The term "annuity" means a fixed sum, payable periodically on specified dates, life for or during a specified or determinable period of time under a commitment to make payments in exchange for a full and adequate counter-value in money or its equivalent.
3. Annuities or other maintenance payments paid by a resident of a Contracting Party to a resident of the other Contracting Party shall be taxable only in the first Party. To the extent that these amounts do not result in a tax relief in the head of the debtor in the first Party, they are considered to be imposed in that Party for the purposes of Article 22.
4. Pensions shall be deemed to come from a Contracting Party if they are paid by a pension fund or other similar institution, or if they come from such a fund or institution, which manages pension plans to which individuals may participate in for pension benefits, where such pension fund or institution is recognized for tax purposes or regulated in accordance with the legislation of that Party.
Article 18
Public functions
1. Salaries, salaries and other similar remuneration, other than pensions, paid by a Contracting Party or any of its political subdivisions or local authorities to a natural person, for services rendered to that Party or to that subdivision or community, shall be taxable only in that Party. However, such wages, salaries and other similar remuneration shall be taxable only in the other Contracting Party if the services are rendered in that Party and if the natural person is a resident of that Party who has not become a resident of that Party for the sole purpose of rendering the services.
2. Pensions paid by a Contracting Party or any of its political subdivisions or local authorities, either directly or by debiting from funds that they have constituted, to a natural person, for services rendered to that Party or to that subdivision or community, shall be taxable only in that Party.
3. The provisions of the preceding paragraphs of this Article shall not apply to salaries, salaries and other similar remuneration or to pensions paid for services rendered in the course of a commercial or industrial activity carried out by a Contracting Party or any of its political subdivisions or local authorities. In such cases, the provisions of Article 14, 15, 16 or 17 as the case may be, shall apply.
Article 19
Students
The sums that a student, apprentice or trainee who is, or who was immediately before travelling to a Contracting Party, a resident of the other Contracting Party and who is staying in the first Party for the sole purpose of pursuing his or her studies or training shall be paid to cover his or her maintenance, education or training expenses shall not be taxable in that Party, provided that they arise from sources outside that Party.
Rule 20
Other income
1. The income elements of a resident of a Contracting Party, wherever they arise, which are not dealt with in the preceding Articles of this Convention shall be taxable only in that Party.
2. The provisions of paragraph 1erer shall not apply to income other than income derived from real property as defined in Article 6, paragraph 2, where the beneficiary of such income, a resident of a Contracting Party, carries on in the other Contracting Party a business activity through a permanent establishment located therein and that the right or property that generates income is effectively connected to it. In this case, the provisions of Article 7 shall apply.
3. Notwithstanding the provisions of paragraphs 1er and 2, income elements that are not dealt with in the preceding Articles of this Convention and that a resident of a Contracting Party draws from sources in the other Contracting Party are also taxable in that other Party, and in accordance with the legislation of that other Party.
CHAPTER IV. - Imposition of fortune
Article 21
Fortune
1. The property constituted by real property referred to in Article 6, which is owned by a resident of a Contracting Party and situated in the other Contracting Party, is taxable in that other Party.
2. A fortune constituted by movable property that is part of the assets of a permanent establishment that a business of a Contracting Party has in the other Contracting Party is taxable in that other Party.
3. A capital made by vessels and aircraft owned by an enterprise of a Contracting Party that operates them in international traffic, as well as by movable assets assigned to the operation of such ships or aircraft, shall be taxable only in that Party.
4. All other assets of a resident of a Contracting Party shall be taxable only in that Party.
CHAPTER V. - Methods to eliminate double taxation
Article 22
Methods to eliminate double taxation
1. With respect to the Hong Kong Special Administrative Region, double taxation is avoided as follows:
(a) Subject to the provisions of the legislation in force in the Hong Kong Special Administrative Region at the time in question and which are related to the imputation on the tax of the Hong Kong Special Administrative Region of the tax paid in a jurisdiction located outside the Hong Kong Special Administrative Region (and which cannot affect the general principle of this article), the Belgian tax paid, in accordance with Belgian law and in conformity with this Convention, is directly or by way of deduction,
(b) The income, profits or gains of a resident of the Hong Kong Special Administrative Region who are taxable in Belgium under any provision of the Convention shall be considered income from sources located in Belgium within the meaning of paragraph (a).
2. With regard to Belgium, double taxation is avoided as follows:
(a) Where a resident of Belgium receives income elements, other than dividends, interest or royalties, which are taxable in the Hong Kong Special Administrative Region in accordance with the provisions of this Convention and which are imposed therein, Belgium exempts from tax these income elements, but it may, to calculate the amount of its taxes on the rest of the income of that resident, apply the same rate as if the income in question had not been exempted.
(b) The dividends that a corporation that is a resident of Belgium receives from a corporation that is a resident of the Hong Kong Special Administrative Region are exempted from the corporate tax in Belgium, under the conditions and limits provided by Belgian legislation.
When a resident of Belgium receives from a corporation that is a resident of the Hong Kong Special Administrative Region dividends that are included in its overall income subject to Belgian tax and that are not exempted from corporate tax under this paragraph, Belgium deducts from the Belgian tax on these dividends the tax of the Hong Kong Special Administrative Region collected on these dividends in accordance with Article 10. This deduction does not exceed the share of Belgian tax, which is proportional to these dividends.
(c) 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 overall income subject to Belgian tax and which consist of interest or royalties, the tax of the Hong Kong Special Administrative Region collected on these revenues is charged on the Belgian tax proportionate to that income.
(d) Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in the Hong Kong Special Administrative Region 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 that are attributable to that establishment, to the extent that these benefits have also been exempted from tax in Hong Kong
CHAPTER VI. - Special provisions
Article 23
Non-discrimination
1. Persons who, in respect of Belgium, are Belgian nationals and, in respect of the Hong Kong Special Administrative Region, have the right to stay or have been incorporated or created in the other Contracting Party shall not be subject to any taxation or obligations therein, which is other or heavier than those to which are or may be subject the nationals of that other Party (in respect of Belgium) or persons who have the right to stay
2. The imposition of a permanent establishment that a business of a Contracting Party has in the other Contracting Party is not established in that other Party in a less favourable manner than the taxation of the enterprises of that other Party that exercise the same activity. This provision may not be construed as requiring a Contracting Party to grant personal deductions, deductions and tax reductions to residents of the other Contracting Party on the basis of the situation or family expenses it grants to its own residents.
3. Unless the provisions of Article 9, paragraph 1erer, of Article 11, paragraph 7, or of Article 12, paragraph 6, shall not apply, any interest, royalties and other expenses paid by a business of a Contracting Party to a resident of the other Contracting Party 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 Party. Similarly, the debts of an enterprise of a Contracting Party to a resident of the other Contracting Party 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 Party.
4. The undertakings of a Contracting Party, whose capital is wholly or in part, directly or indirectly, held or controlled by one or more residents of the other Contracting Party, shall not be subject in the first Party to any taxation or related obligation, which is other or heavier than those to which the other similar enterprises of the first Party are or may be subject.
Article 24
Friendly procedure
1. Where a person considers that the measures taken by a Contracting Party or by the two Contracting Parties shall result in or result in taxation not in accordance with the provisions of this Convention, the person may, irrespective of the remedies provided by the domestic law in force in those Parties, submit the case to the competent authority of the Contracting Party of which the person is a resident or, if the case falls under Article 23, paragraph 1ererto that of the Contracting Party of which it is considered to be a national (with regard to Belgium) or in which it has the right to stay or has been constituted or created (with regard to the Hong Kong Special Administrative Region). 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 claim appears to it to be substantiated and if it is not itself in a position to provide a satisfactory solution, to resolve the case by amicable agreement with the competent authority of the other Contracting Party, with a view to avoiding taxation not in conformity with the Convention. The agreement shall be applied regardless of the time limits provided by domestic law in force in Contracting Parties.
3. The competent authorities of the Contracting Parties 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 Parties may consult on the administrative measures necessary to implement the provisions of the Convention, including on the justifications to be provided by the residents of each Contracting Party to benefit in the other Party from the exemptions or tax reductions provided for in this Convention.
5. The competent authorities of the Contracting Parties shall communicate directly with each other for the application of the provisions of the Convention.
Rule 25
Exchange of information
1. The competent authorities of the Contracting Parties shall exchange the information necessary to apply the provisions of this Convention or those of the domestic legislation of the Contracting Parties relating to the taxes covered by the Convention to the extent that the taxation it provides is not contrary to the Convention. The exchange of information is not restricted by section 1er. The information received by a Contracting Party shall be kept secret in the same manner as the information obtained pursuant to the domestic legislation in force in that Party 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 mentioned in the first sentence, 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 disclose this information in public court hearings or judgments, including, with respect to the Hong Kong Special Administrative Region, the decisions of the Board of Review. The information received is not communicated to any third jurisdiction, for any purpose, without the consent of the Contracting Party that provided the information originally.
2. The provisions of paragraph 1erer in no case may be construed as imposing on a Contracting Party the obligation:
(a) take administrative measures derogating from its legislation, administrative practice or those of the other Contracting Party;
(b) provide information that could not be obtained on the basis of existing legislation in either of the Contracting Parties or within the normal administrative practice of either of the Contracting Parties;
(c) provide information that would reveal a commercial, industrial, professional or commercial secret or information that would be contrary to public order.
Rule 26
Government missions
The provisions of this Convention shall not affect the tax privileges enjoyed by members of government missions, including consular posts, under either the general rules of international law or the provisions of special agreements.
Rule 27
Miscellaneous provisions
The provisions of this Convention shall not affect the right of each Contracting Party to apply its domestic tax evasion legislation and measures, whether or not they are described as such, to the extent that they do not give rise to taxation contrary to the Convention.
CHAPTER VII. - Final provisions
Rule 28
Entry into force
1. Each Contracting Party shall notify the other Contracting Party 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) in the Hong Kong Special Administrative Region:
tax of the Hong Kong Special Administrative Region for any taxation year beginning on or after 1er April 2004;
(b) in Belgium:
- taxes due to the source on the income awarded or paid from 1er January 2004;
- other taxes on taxable period income starting from 1er January 2004;
- the tax on fortune established on assets existing from 1er January 2004.
Rule 29
Denunciation
This Convention shall remain in force until it has been denounced by a Contracting Party. Each of the Contracting Parties may, until 30 June inclusive of any calendar year from the fifth year following that of the entry into force, denounce it in writing to the other Contracting Party. In this case, the Convention will cease to apply:
(a) in the Hong Kong Special Administrative Region:
tax of the Hong Kong Special Administrative Region for any taxation year beginning on or after 1er April of the calendar year immediately following the denunciation;
(b) in Belgium:
- taxes due to the source on the income awarded or paid from 1er January of the calendar year immediately following the denunciation;
- other taxes on taxable period income starting from 1er January of the calendar year immediately following the denunciation;
- the tax on fortune established on assets existing from 1er January of the calendar year immediately following the denunciation.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Convention.
Done in Hong Kong on 10 December 2003, in duplicate, in the English language.
For the Government of the Kingdom of Belgium:
For the Government of the Hong Kong Special Administrative Region of the People ' s Republic of China:
Protocol
At the time of the signing of the Convention between the Hong Kong Special Administrative Region of the People's Republic of China and the Kingdom of Belgium to avoid double taxation and to prevent tax evasion in respect of taxes on income and on capital (the "Convention"), the Governments of the Contracting Parties have agreed on the following provisions that form an integral part of the Convention.
1. Ad article 3, paragraph 2:
With respect to the Hong Kong Special Administrative Region, the terms "criminalizations or interests" include, without limitation, any amount added for failure to pay the tax of the Hong Kong Special Administrative Region and recovered with it, as well as any additional tax established because of the violation or non-compliance of its tax legislation.
2. Ad article 4, paragraph 1erer :
With respect to the Hong Kong Special Administrative Region, the term "resident of a Contracting Party" means:
(a) any natural person who normally resides in the Hong Kong Special Administrative Region for a taxation year;
(b) any natural person who stays in the Hong Kong Special Administrative Region for more than 180 days in a taxation year or for more than 300 days in two consecutive taxation years, one of those years being the taxation year concerned;
(c) a corporation incorporated in the Hong Kong Special Administrative Region or, if incorporated outside the Hong Kong Special Administrative Region, a corporation that has its administrative and control centre in the Hong Kong Special Administrative Region;
(d) any other person incorporated in accordance with the legislation in force in the Hong Kong Special Administrative Region or, if incorporated outside the Hong Kong Special Administrative Region, any other person who has its administrative and control centre in the Hong Kong Special Administrative Region.
The last sentence of this paragraph does not prevent a person from being treated as a resident of a Contracting Party because of the existence of a principle of territoriality in the taxation system of that Party.
3. Ad article 7 and article 11:
With respect to the Hong Kong Special Administrative Region, the term "bank company" means a financial institution.
4. Ad article 11, paragraph 3:
With respect to Belgium, the provisions of paragraph (b) apply in any case:
- the interests of a loan or credit for which financial support is granted after the advice of the Export Financial Support Committee (" Finexpo");
- the interests of a loan or credit granted by the Association for the Coordination of the Medium-term Financing of Belgian Exports (" Creditexport");
- the interests of a loan or credit provided by the National Office of the Ducroire (OND).
5. Ad article 14, paragraph 1erer :
Employee employment is exercised in a Contracting Party where the activity under which wages, salaries and other similar remuneration are paid is actually exercised in that Party. This means that the employee is physically present in this Party to carry out this activity.
6. Article 15, paragraph 2:
The provisions of this paragraph also apply, with respect to Belgium, to the remuneration that a resident of the Hong Kong Special Administrative Region derives from his personal activity as a partner in a corporation, other than a share corporation, which is a resident of Belgium.
7. Ad article 22, paragraph 2, (a):
(a) Without prejudice to the provisions of Article 17, paragraph 3, the income elements that a Belgian resident receives are not considered to be taxed in the Hong Kong Special Administrative Region when these income elements are not included in the basis on which the tax of the Hong Kong Special Administrative Region is due. As a result, income elements that are considered non-taxable by the legislation in force in the Hong Kong Special Administrative Region, or that are exempt from Hong Kong Special Administrative Region tax by the same legislation, are not considered to be taxed.
(b) Dividends paid as a result of an interest that is effectively linked to a permanent establishment located in the Hong Kong Special Administrative Region through which a resident of Belgium carries on a business activity, interest paid as a result of a debt that is actually attached to that permanent establishment, and royalties paid as a result of a right or property that is actually attached to that permanent establishment, are exempted from tax in accordance with article 22,
8. Ad article 27:
With respect to the Hong Kong Special Administrative Region, the terms "tax evasion legislation and measures" include sections 5B(2), 9(1A), 9A, 15(1)(j), 15 Revenuek), 16(2), 16E(2A), 16E(2B), 18D(2A), 20, 21A(1)(a), 22B, 38B, 39E, 61A and 61B of the Hong Kong,
In faith, the undersigned, duly authorized by their respective Governments, have signed this Protocol.
Done in Hong Kong on 10 December 2003, in duplicate, in the English language.