27 FEBRUARY 2003. - An Act to approve the Protocol signed in Copenhagen on 27 September 1999, amending and supplementing the Convention between Belgium and Denmark with a view to avoiding double taxation and resolving certain other issues relating to income and property taxes, signed in Brussels on 16 October 1969 (1) (2)

ALBERT II, King of the Belgians,
To all, present and to come, Hi.
The Chambers adopted and We sanction the following:
Article 1^er. This Act regulates a matter referred to in Article 77 of the Constitution.
Art. 2. The Protocol signed in Copenhagen on 27 September 1999, amending and supplementing the Convention between Belgium and Denmark with a view to avoiding double taxation and resolving some other issues relating to income and property taxes, signed in Brussels on 16 October 1969, will come out its 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 Brussels, 27 February 2003.
ALBERT
By the King:
Minister of Foreign Affairs,
L. MICHEL
Minister of Finance,
D. REYNDERS
Minister, Deputy Minister of Foreign Affairs,
Ms. A. NEYTS-UYTTEBROECK
Seen and sealed the state seal:
Minister of Justice,
Mr. VERWILGHEN
____
Notes
(1) Session 2001-2002.
Senate.
Documents. - Bill tabled on 27 September 2002, No. 2-1285/1.
Session 2002-2003.
Senaat.
Documents. - Report made on behalf of the commission, No. 2-1285/2.
Annales parliamentarians. - Discussion. Session of November 28, 2002. - Vote. Session of November 28, 2002.
Room.
Documents. - Project transmitted by the Senate, No. 50-2162/1. - Text adopted in plenary and subject to Royal Assent, No. 50-2162/2.
Annales parliamentarians. - Discussion. Session of December 13, 2002. - Vote. Session of December 13, 2002.
(2) The Protocol entered into force on 25 April 2003.

MODIFIANT PROTOCOL AND COMPLETE THE CONVENTION AGAINST BELGIUM AND DANEMARK AGAINST IMPOSITION DOUBLES AND REGLER CERTAINS OTHER MATTERS ON THE REVENUE AND ON THE FORTUNE, SIGNED A BRUXELLES ON 16 OCTOBER 1969
His Majesty the King of the Belgians
and
Her Majesty the Queen of Denmark
Desirous of amending and supplementing the Convention between Belgium and Denmark with a view to avoiding double taxation and resolving some other issues relating to taxes on income and on fortune, signed in Brussels on 16 October 1969 (hereinafter referred to as "the Convention"), decided to conclude a Protocol for that purpose.
ARTICLE 1^er
Article 2, paragraph 3, of the Convention is replaced by the following provision:
"Paragraph 3 The current taxes to which the Convention applies include:
1° with regard to Belgium:
(a) the tax of natural persons;
(b) corporate tax;
(c) the tax of legal persons;
(d) non-resident tax;
(e) the special contribution assimilated to the tax of natural persons;
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");
2° with regard to Denmark:
(a) State taxes on income;
(b) communal income tax;
(c) departmental income tax;
(d) Special income tax;
(e) ecclesiastical tax;
(f) dividend tax;
(g) interest tax;
(h) royalty tax;
(i) taxes raised under the Hydrocarbons Act;
(j) State capital tax;
(k) land taxes;
including taxes collected at source,
(hereinafter referred to as "Danish tax"). »
ARTICLE 2
Article 3, paragraph 1^erthe Convention is amended as follows:
1. Subparagraphs 1 and 2 are replaced by the following:
"1° the term "Belgium" means the Kingdom of Belgium; employed in a geographical sense, it designates the national territory, the territorial sea and other maritime zones on which, in accordance with international law, Belgium exercises sovereign rights or jurisdiction;
2° the term "Denmark" means the Kingdom of Denmark; employed in a geographical sense, it designates the national territory, the territorial sea and other maritime zones on which, in accordance with international law, Denmark exercises sovereign rights or jurisdiction; This term does not include the Faroe Islands and Greenland; »
2. The following new provision is inserted immediately after subparagraph 6°:
"7° 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 ship or aircraft is operated only between points in the other Contracting State; »
3. Subparagraph 7° is replaced by the following new subparagraph 8°:
"8° the term "competent authority" means:
(a) with regard to Belgium, the Director-General of Direct Contributions, and
(b) in respect of Denmark, the Minister of Contributions or its authorized representative. »
ARTICLE 3
Article 4, paragraph 1^erthe Convention shall be replaced by the following provision:
“§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. 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. »
ARTICLE 4
1. Article 7, paragraph 7, of the Convention is deleted.
2. Paragraph 8 becomes paragraph 7.
ARTICLE 5
Article 8, paragraph 1^erthe Convention shall be replaced by the following provision:
« § 1^er. The profits derived from the international traffic of ships or aircraft shall be taxable only in the Contracting State where the effective management seat of the enterprise is located. »
ARTICLE 6
In Article 10, paragraphs 2 and 3 of the Convention are replaced by the following provisions:
« § 2. 1 Such dividends shall also be taxable 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 beneficiary of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 15% of the gross amount of the dividends.
2° However, where a resident corporation of a Contracting State holds directly at least 25 per cent of the capital of a resident corporation of the other Contracting State, the dividends paid to it by that latter corporation are exempted from tax in the State of which the distribution corporation is a resident if the domestic legislation of that applicable State allows it and under the conditions granted to the exemption by that legislation.
3° The provisions of sub-paragraphs 1 and 2 of this paragraph shall not affect the taxation of the distributor corporation for profits that are used for the payment of dividends.
§ 3. The term "dividend" used in this article refers to income derived from shares, shares or benefits, shares of mine, share of founder or other share of beneficiaries with the exception of receivables, as well as income - even attributed in the form of interest- treated as income from shares by the tax legislation of the State whose distribution society is resident. »
ARTICLE 7
Article 11 of the Convention is amended as follows:
1. Paragraph 2 is replaced by the following provision:
“§2. However, these interests may be imposed in the Contracting State from which they arise and according to the law of that State, but the tax so charged shall not exceed 1% of the gross amount of interest. »
2. Paragraph 3, second sentence, l°, is replaced by the following provision:
"1° interest treated as dividends under section l0, paragraph 3. »
ARTICLE 8
In Article 13, paragraph 2, of the Convention, the second paragraph shall be replaced by the following provision:
"However, gains from the alienation of ships or aircraft operated in international traffic or of ships, aircraft, tugs, pushers or towers operated in the context of activities at sea referred to in Article 20bis, as well as movable property used in the operation of such vessels, aircraft, tugs, pushers or towers shall be taxable only in the Contracting State where the management seat is located »
ARTICLE 9
Article 16 of the Convention is replaced by the following article:
“Article 16
Corporate managers
§ 1^er. The fortieth, presence tokens and similar remuneration that a resident of a Contracting State receives as a member of the board of directors or a similar body of a resident corporation of the other Contracting State may be taxed in that other State.
This provision also applies to remuneration received as a result of the exercise of functions which, under the law 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. The remuneration that a person referred to in the paragraph shall receive from the corporation 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 the other Contracting State, shall be taxable in the Contracting State where that person or that resident exercises his or her activity. »
ARTICLE 10
Article 18 of the Convention is replaced by the following article:
“Article 18
Pensions
§ 1^er. Subject to the provisions of the following paragraphs and Article 19, paragraph 1^erpension or annuity paid to a resident of a Contracting State shall be taxable only in that State.
§ 2. Pensions and other allowances, whether periodic or not, paid in accordance with the social legislation of a Contracting State or under a general regime organized by a Contracting State to supplement the benefits provided for in that legislation, shall be taxable only in that State.
§ 3. Pensions and other benefits from a pension system established in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State. However, in the case of a natural person who was a resident of the first State and who became a resident of the other State, such pensions and allowances are taxable in the first State if the contributions to the pension system were deductible for tax purposes in that State or if the premiums are not considered a taxable income in that State.
§ 4. The term "thinks", used in paragraph 1^er, means payments made for prior employment or compensation for damage suffered.
§ 5. The term "rentes" means a pre-determined amount payable periodically to fixed maturity, life for or during a specified or determinable period of time, by virtue of a commitment to make payments in exchange for a full and adequate money countervalue or equivalent. »
ARTICLE 11
The following new article 20bis is inserted after article 20 of the Convention:
« Article 20bis
Activities at sea related to exploration
or hydrocarbon exploitation
§ 1^er. Notwithstanding the preceding provisions of this Convention, the provisions of this Article shall apply where activities are carried out at sea in a Contracting State in relation to the exploration or exploitation of hydrocarbons in that State to the extent that such activities are not carried out by the person to whom exploration or exploitation has been granted. The above provisions apply to activities or revenues that are not covered by this section.
§ 2. A business of a Contracting State or a person exercising a resident liberal profession of a Contracting State, which carries on activities at sea in the other Contracting State referred to in the first sentence of paragraph 1^eris considered to be carrying out these activities in that other Contracting State through a permanent establishment or a fixed base located therein.
§ 3. The provisions of paragraph 2 shall not apply where activities at sea are carried out during one or more periods not exceeding a total of 30 days in any period of 12 months.
§ 4. Notwithstanding the provisions of paragraphs 2 and 3, drilling activities at sea are a permanent establishment only if these activities are carried out during one or more periods exceeding a total of 365 days during any period of 18 months.
§ 5. For the purposes of the provisions of paragraphs 3 and 4, activities carried out by an enterprise associated with another enterprise within the meaning of Article 9 (Interdependent companies) shall be considered to be carried out by that other enterprise if the activities in question are of the same nature as those carried out by that other enterprise.
§ 6. Notwithstanding the provisions of paragraphs 2 and 3, the profits derived by a company of a Contracting State from the carriage by ships or aircraft of goods or personnel to a place situated at sea where activities are carried out in the other Contracting State in relation to the exploration or operation of hydrocarbons, as well as the profits derived by a company of a Contracting State from the operation of tugs, pushers or touers in the
§ 7. Salaries, salaries and other similar remuneration to be paid by a resident of a Contracting State in respect of an employee employed on board a ship, aircraft, tug, pusher or tower referred to in paragraph 6 shall be taxed in the Contracting State where the effective management seat of the undertaking is located. »
ARTICLE 12
Article 22, paragraph 3, of the Convention is replaced by the following provision:
“§3. Ships and aircraft operated in international traffic and vessels, aircraft, tugs, pushers or towers operated in the context of activities at sea referred to in Article 20bis, as well as movable property for the operation of such vessels, aircraft, tugs, pushers and towers, shall be taxable only in the Contracting State where the effective management seat of the company is located. »
ARTICLE 13
Article 23 of the Convention is replaced by the following article:
« § 1^er. With regard to Belgium, double taxation is avoided as follows:
1° When a Belgian resident receives income or has assets that are taxable in Denmark in accordance with the provisions of this Convention, with the exception of those of articles 10, paragraph 2, 11, paragraphs 2 and 6, and 12, paragraphs 2 and 5, Belgium exempts from tax these incomes or assets, but it may, to calculate the amount of its taxes on the rest of the income or fortune of that resident, apply the same rate if
2° Subject to the provisions of Belgian law relating to the imputation on Belgian tax of taxes paid abroad, where a Belgian resident receives income elements that are included in his or her total income subject to Belgian tax and that consist of taxable dividends in accordance with section 10, paragraph 2, and not exempted from Belgian tax under subsection 3 of the following, in taxable interest in accordance with section 11,
3° The dividends that a resident corporation of Belgium receives from a resident corporation of Denmark and which are taxable in Denmark in accordance with Article 10, paragraph 2, are exempted from the corporate tax in Belgium, under the conditions and limits provided for in Belgian law.
4° Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in Denmark have been effectively deducted from the profits of that undertaking for its taxation in Belgium, the exemption provided for in sub-paragraph 1° does not apply in Belgium to the profits of other taxable periods that are attributable to that establishment, to the extent that these profits have also been exempted from tax in Denmark for that reason.
§ 2. With regard to Denmark, double taxation is avoided as follows:
1° Subject to the provisions of subparagraphs 3° and 4°, where a resident of Denmark receives income or has assets that, under the provisions of the Convention, are taxable in Belgium, Denmark grants:
(a) on the income tax of that resident, a deduction of an amount equal to the income tax paid in Belgium;
(b) on the property tax of that resident, a deduction of an amount equal to the capital tax paid in Belgium.
2° This deduction may, however, not exceed in either case the fraction of income tax or capital tax calculated before deduction, which, as the case may be, corresponds to income or taxable capital in Belgium.
3° Dividends paid by a resident corporation of Belgium to a resident corporation of Denmark and which owns at least 25% of the capital of the corporation that pays the dividends are exempted from tax in Denmark, under the conditions prescribed by Danish legislation.
4° In the case of dividends paid by a resident corporation of Belgium to a resident corporation of Denmark that owns at least 25% of the capital of the corporation that pays the dividends, and where the dividends are not exempted from tax in Denmark in accordance with the provisions of subparagraph 3°, the credit granted under subparagraph 1° also takes into account the Belgian tax due by the corporation that pays the dividends on the profits.
5° When a resident of Denmark receives income or owns property that, under the provisions of the Convention, is taxable exclusively in Belgium, Denmark may include such income or property elements in the taxable basis, but it grants on income tax or on capital tax a deduction equal to the fraction of income tax or capital tax that corresponds, as the case may be, to income derived from Belqique. »
ARTICLE 14
In Article 24, paragraphs 4 and 5 of the Convention are replaced by the following provisions:
Ҥ4. The resident natural persons of a Contracting State who are taxable in the other Contracting State shall, on the basis of the taxes referred to in Article 2, receive exemptions, slaughters, deductions and other benefits, which are granted, by reason of their family expenses, to the natural persons, nationals of that other State, who are not residents.
§ 5. 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 cannot be interpreted as preventing Belgium:
1° to impose at the rate prescribed by Belgian legislation the amount of the profits of a Belgian permanent establishment of a Danish resident company provided that the above-mentioned rate does not exceed the maximum rate applicable to the profits of Belgian resident companies;
2° to collect the movable pre-account on the dividends associated with an interest that is actually connected to a permanent establishment in Belgium that has a resident company in Denmark. »
ARTICLE 15
Article 28, paragraph 1^erthe Convention is deleted and paragraphs 2, 3, 4 and 5 become paragraphs 1^er, 2, 3 and 4.
ARTICLE 16
1. This Protocol shall enter into force on the fifteenth day after the day on which the Contracting States have notified themselves that the constitutionally required procedure is being completed.
2. The provisions of the Protocol shall apply:
(a) tax due to the source on income normally paid or paid after 31 December of the year in which the Protocol entered into force in accordance with paragraph 1^er;
(b) other taxes on taxable period income ending after 31 December of the same year.
3. The Protocol shall remain in force as long as the Convention is and, in the event of its denunciation, it shall cease to apply at the same time as it is.
In faith, the Plenipotentiaries of the two States have signed and affixed their seals there.
Done in Copenhagen on 27 September 1999, in double copies, in French, Dutch and Danish languages, the three texts being equally authentic.