29 FEBRUARY 2004. - An Act to assent to the Convention between the Kingdom of Belgium and the Republic of Croatia to avoid double taxation and to prevent tax evasion in respect of taxes on income and fortune signed in Brussels on 31 October 2001 (1) (2) (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 Croatia to avoid double taxation and to prevent tax evasion in respect of taxes on income and on fortune, signed in Brussels on 31 October 2001, will come out its full and complete 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 on 29 February 2004.
ALBERT
By the King:
Minister of Foreign Affairs,
L. MICHEL
Minister of Finance,
D. REYNDERS
Seal of the state seal:
The Minister of Justice,
Ms. L. ONKELINCX
____
Notes
(1) Session 2003-2004.
Senate.
Documents:
2003-2004. Bill, tabled on 9 October 2003, No. 3-233/1. - 2003-2004. Report No. 3-233/2. - 2003-2004. Text adopted by the Commission.
Annales parlementaire :
2003-2004. Discussion, meeting of December 5, 2003. - 2003-2004. Voting, meeting of 5 December 2003.
Room.
Documents:
2003-2004. Project transmitted by the Senate No. 51-562/1. - 2003-2004. Text adopted in plenary and subject to Royal Assent
Annales parlementaire
2003-2004. Discussion, meeting of 8 January 2004. - 2003-2004. Voting, meeting of 8 January 2004.
(2) In accordance with article 29, the Convention entered into force on 1^er April 2004.

Convention between the Kingdom of Belgium and the Republic of Croatia to avoid double taxation and to prevent tax evasion in respect of income and wealth taxes
The Government of the Kingdom of Belgium
AND
the Government of the Republic of Croatia,
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:
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 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. Current taxes to which the Convention applies include:
(a) with regard to Belgium:
1° the tax of natural persons;
2° corporate tax;
3° the tax of legal persons;
4° the non-resident tax;
5° 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 "Belgian tax");
(b) with regard to Croatia:
1° the tax on profits ("the tax profit");
2° income tax ("the income tax");
3° local income tax ("the local income tax")
(hereinafter referred to as "the Croatian tax").
4. The Convention also applies to taxes of an identical or similar nature that would be established after the date of signature of the Convention and that would be in addition to or replace 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.
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) 1° 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;
2° the term "Croatia" means the territory of the Republic of Croatia and the maritime areas adjacent to the outer limits of the territorial sea, including the seabed and the marine basement, on which, in accordance with international law (and the legislation of the Republic of Croatia), the Republic of Croatia exercises its sovereign rights and jurisdiction;
(b) the terms "a Contracting State" and "the other Contracting State" mean, in the context, Belgium or Croatia;
(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 corporation for taxation purposes;
(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 a company whose effective steering seat is located in a Contracting State, except where the vessel or aircraft is operated only between points in the other Contracting State;
(g) the term "competent authority" means, with respect to the two Contracting States, the Minister of Finance or its authorized representative;
(h) the term "national" means:
1° any natural person who has the nationality of a Contracting State;
2. 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 not defined therein shall, unless the context requires a different interpretation, the meaning assigned to it, at that time, the law of that State in respect of the taxes to which the Convention applies, the meaning assigned to that term or that expression by the tax law of that State prevailing over 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 or any other similar criterion, and also applies to that State 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 State only for income from sources located in that State or for the property located therein.
2. When, according to the provisions of paragraph 1^er, a natural person is a resident of the two Contracting States, his situation is 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 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, a person other than a natural person is a resident of the two Contracting States, it is considered to be a resident only of the State 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, and
(f) a mine, oil or gas well, a career or any other place of extraction of natural resources.
3. A construction or construction site is a permanent establishment only if its duration exceeds 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, where a person - other than an agent enjoying an independent status to which paragraph 6 applies - shall act on behalf of a business and shall, in a Contracting State, have powers that it normally exercises to enter into contracts on behalf of the enterprise, that undertaking shall be deemed to have a permanent establishment in that State for all activities that the person exercises for the enterprise, unless the activities of that person are limited to those
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.
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.
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 applies to income derived from direct exploitation or enjoyment, lease or charter, as well as any other form of exploitation of real property.
4. The provisions of paragraphs 1^er and 3 also apply to income from real property of a business as well as to income from 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, where a business 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 benefits of a permanent establishment, deductions are made of the expenses incurred for the purposes of this permanent establishment, including the executive expenses and general administrative expenses so exposed, either in the State where the permanent establishment is located or elsewhere.
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 shall prevent that Contracting State from determining the taxable profits according to the distribution in use; However, the method of distribution 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, Inland and Air Navigation
1 The profits derived from the operation, in international traffic, of ships or aircraft shall be taxable only in the Contracting State where the effective management seat of the enterprise is located.
2. The profits derived from the operation of vessels serving inland navigation are taxable only in the Contracting State where the effective management seat of the enterprise is located.
3. If the effective management seat of a marine or inland navigation company is on board a ship or vessel, that seat shall be considered to be located in the Contracting State where the port of attachment of that ship or vessel is located, or if the vessel is not attached, in the Contracting State of which the operator of the ship or vessel is a resident.
4. The provisions of paragraph 1 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 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;
(b) 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 founder 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 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, i.e., 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 applicable, 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, 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 under a legal regime organized by a Contracting State or one of its political subdivisions or local authorities for the purpose of promoting exports;
(c) interest in loans of any kind not represented by bearer securities and granted by bank companies;
(d) interest in deposits of amounts of money not represented by holder securities and made by companies in banking enterprises;
(e) interest paid to the other Contracting State 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 borrowing obligations, including 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 1^er, 2 and 3 shall not apply where the beneficial owner of the interest, a resident of a Contracting State, exercises 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 applicable, shall apply.
6. Interest shall be deemed to arise from a Contracting State where the debtor is that State itself, a political subdivision, a local authority or 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.
Article 12
Claims
1. Royalties from a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State.
2. 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, films or tapes registered or other media for radio or television, a patent, a trademark or trade, a drawing or a model, a plan or a plan
3. The provisions of paragraph 1 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 applicable, shall apply.
4. Royalties shall be deemed to arise from a Contracting State where the debtor is that State itself, a political subdivision, a local authority or a resident of that Contracting 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, such royalties shall be deemed to arise from the Contracting State where the permanent establishment, or the fixed base, is located.
5. 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.
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, and situated in the other Contracting State, shall be taxable in that other State.
2. 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
3. Gains derived from the alienation of ships or aircraft operated in international traffic, vessels used for inland navigation or movable property assigned to the operation of such vessels, aircraft or vessels shall be taxable only in the Contracting State where the effective management seat of the enterprise is located.
4. Gains from the alienation of all property other than those referred to in paragraphs 1^er, 2 and 3 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 resident of a Contracting State from a liberal profession or other activities of an independent character shall be taxable only in that State, unless that resident has in the other Contracting State a fixed basis for the exercise of his or her activities in an ordinary manner. If it has such a fixed base, income may be taxed in the other State but only to the extent that it 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, 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 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^erthe 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 in the fiscal year 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,
(c) and the payroll is not supported by a permanent establishment or fixed base that the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration for an employee employed on board a ship or aircraft operated in international traffic, or on board a ship serving in inland navigation, may be taxed in the Contracting State where the effective management seat of the enterprise is located.
Article 16
Corporate managers
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 receives from a company that is a resident of a Contracting State because of the exercise of a day-to-day direction or technical activity 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, that is a resident of a Contracting State, shall be taxable in accordance with the provisions of Article 15, as if it were employment of an employer
Article 17
Artists and athletes
1. Notwithstanding the provisions of Articles 14 and 15, 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, in the Contracting State where the activities of the artist or athlete are carried out.
Article 18
Pensions
1. Subject to the provisions of Article 19, paragraph 2, pensions and other similar remuneration paid to a resident of a Contracting State for an earlier job shall be taxable only in that State.
2. However, pensions and other allowances, periodic or unpaid, paid in accordance with the social legislation of a Contracting State are taxable in that State. This provision also applies to pensions and allowances paid under a general regime organized by a Contracting State to supplement the benefits provided by that legislation.
Article 19
Public functions
1. (a) Salaries, salaries and other similar remuneration, other than pensions, paid by a Contracting State or any of its political subdivisions or local authorities to a natural person, for services rendered to that State or subdivision or community, shall be taxable only in that State.
(b) 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:
1° has the nationality of that State, or
2° 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 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 apply to salaries, salaries and other similar remuneration as well as to pensions paid for services rendered in the course of an industrial or commercial activity carried out by a Contracting State or one of its political subdivisions or local authorities.
4. The provisions of paragraph 1^er of this Article shall also apply to wages, salaries and other similar remuneration paid by a Contracting State or any of its political subdivisions or local authorities, either directly or by debit from funds provided exclusively by that State or subdivision or community, to experts or volunteers for services rendered in the other Contracting State in the framework of economic cooperation agreements concluded between the Contracting States, their political subdivisions or their local authorities.
Rule 20
Teachers and students
1. Any remuneration of teachers and other members of the teaching staff, residents of a Contracting State, who reside in the other Contracting State to teach or undertake scientific research in a university or other officially recognized educational institution, shall be exempted from tax in that other State if the stay of such persons does not exceed two years from the date of their arrival in that other State.
2. 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:
(a) the amounts received from sources outside the State to cover its costs of maintenance, study or training;
(b) on remuneration received for an employee employed in that State in connection with its education or training and during the normal period of such employment, if such remuneration does not exceed, as the case may be, by calendar year 120. 000 Belgian francs or 3,000 euros or the equivalent of this sum in Croatian currency during the official exchange.
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 and which are imposed in that State shall be taxable only in that State.
2. The provisions of paragraph 1^er 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, resident of a Contracting State, carries on in the other Contracting State, 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 actually connected therein. In this case, the provisions of Article 7 or Article 14, as applicable, shall apply.
Article 22
Fortune
1. The property constituted by real property referred to in Article 6, which is owned by a resident of a Contracting State and situated in the other Contracting State, is 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 fortune constituted by ships and aircraft operated in international traffic, by vessels serving in inland navigation, as well as by movable assets assigned to the operation of such ships, aircraft or vessels, is taxable only in the Contracting State where the effective management seat of the enterprise is located.
4. All other assets of a resident of a Contracting State shall be taxable only in that State.
Article 23
Methods to eliminate double taxation
1. With regard to Belgium, double taxation is avoided as follows:
(a) When a Belgian resident receives income or owns assets that are taxed in Croatia in accordance with the provisions of this Convention, with the exception of those of articles 10, paragraph 2, 11, paragraphs 2 and 7, and 12, paragraph 5, Belgium exempts from tax these incomes or assets, 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 property were 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 overall income subject to Belgian tax and which consist of a Belgian tax-free dividend under (c) below, in interest or royalties, the Croatian tax collected on these revenues is charged on Belgian tax.
(c) The dividends that a corporation that is a resident of Belgium receives from a corporation that is a resident of Croatia are exempted from the corporate tax in Belgium in accordance with Belgian law.
(d) Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in Croatia were 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 were also exempted from tax in Croatia due to their compensation with
2. For a resident of Croatia, double taxation is avoided as follows:
(a) the income it derives from Belgium - with the exception of the revenues referred to in (b) - or the assets it owns in Belgium which, in accordance with the provisions of this Convention, are tax-free in Belgium. This exemption does not affect Croatia's right to take into account the exempt income or wealth when determining the tax rate. This provision shall apply to dividends only if such dividends are paid to a corporation that is a resident of Croatia by a corporation that is a resident of Belgium whose capital is at least 10% of which is held directly or indirectly by the Croatian corporation and if such dividends are not deducted when determining the profits of the corporation that pays the dividends.
(b) in accordance with Croatian tax legislation and this Convention, the tax paid in Belgium on the following revenues is charged on the Croatian tax related to these revenues:
(aa) dividends not referred to in (a);
(b) interest;
(c) royalties;
(dd) income referred to in section 15, paragraph 3;
(e) fortieths referred to in Article 16, paragraph 1^er;
ff) income of artists and athletes.
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 Article 1, 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, of Article 11, paragraph 7, or of Article 12, paragraph 5, are applicable, the interest, royalties and other expenses paid by a business 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 section shall apply, notwithstanding the provisions of section 2, 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^erto 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 this 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 information necessary to apply 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. The exchange of information is not restricted by section 1^er. 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 in no case may 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 undertake to lend each other assistance and assistance in order to notify and recover the taxes referred to in Article 2 as well as any additional increments, interests, fees and fines without a criminal character.
2. Upon request of the competent authority of a Contracting State, the competent authority of the other Contracting State shall, in accordance with the legal and regulatory provisions applicable to the notification and recovery of such taxes of the Contracting State, notify and recover the tax claims referred to in paragraph 1^er, which are due in the first State. These claims do not enjoy any privilege in the requested State and the requested State is not required to apply enforcement means that are not authorized by the legal or regulatory provisions of the requesting State.
3. The requests referred to in paragraph 2 shall be supported by an official copy of the enforceable titles, accompanied, if purchased, by an official copy of the administrative or judicial decisions passed in force of the evidence.
4. With respect to tax claims that are subject to appeal, the competent authority of a Contracting State may, in order to safeguard its rights, request the competent authority of the other Contracting State to take the precautionary measures provided for in the legislation of the other Contracting State; the provisions of paragraphs 1^er to 3 are applicable, mutatis mutandis, to these measures.
5. The provisions of Article 26, paragraph 1^er, shall also apply to any information brought under this Article to the knowledge of the competent authority of a Contracting 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 or consular posts under either the general rules of international law or the provisions of special agreements.
Rule 29
Entry into force
1. This Convention shall enter into force on the fifteenth day after the date of receipt by diplomatic means of the second notification by which one of the Contracting States shall notify the other of the fulfilment of the procedures required by its domestic legislation for the entry into force of this Convention.
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.
3. The provisions of the Convention between the Socialist Federal Republic of Yugoslavia and the Kingdom of Belgium to avoid double taxation of income and property, signed in Belgrade on 21 November 1980, shall cease to apply to any Belgian or Croatian tax relating to income for which this Convention has effect with respect to that tax, in accordance with the provisions of paragraph 2.
Rule 30
Denunciation
This Convention shall remain in force until one of the Contracting States denounces it, in writing and through diplomatic channels, to the other Contracting State no later than 30 June of any calendar year after the expiration of a period of five years from the date of its entry into force. 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 in Brussels on 31 October 2001, in double copy, in English, French, Dutch and Croatian, the 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 Croatia to avoid double taxation and to prevent tax evasion in respect of income and property taxes, the undersigned have agreed on the following provisions which are an integral part of the Convention.
1. Ad Article 15, paragraph 2, (a):
For the purposes of the Convention, the term "tax year" means, in the case of Belgium, the taxable period and, in the case of Croatia, the calendar year.
2. Ad Article 18, paragraph 1^er :
Notwithstanding the provision of section 18, paragraph 1^erpension and other similar remuneration paid to a resident of a Contracting State shall be taxable only in the other Contracting State from which they arise if such similar pensions and remuneration are not imposed in the first Contracting State.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Protocol.
Done in Brussels on 31 October 2001, in double copy, in English, French, Dutch and Croatian, the texts being equally authentic. The English language text will prevail in the event of a discrepancy between the texts.