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1 MARCH 2000. - An Act to approve the Additional Protocol between the Government of the Kingdom of Belgium and the Government of the People's Republic of China, signed in Beijing on 27 November 1996, amending the Convention to avoid double taxation and to prevent tax evasion on income tax and the Protocol, signed in Beijing on 18 April 1985 (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 Additional Protocol between the Government of the Kingdom of Belgium and the Government of the People's Republic of China, signed in Beijing on 27 November 1996, amending the Convention with a view to avoiding double taxation and preventing tax evasion in respect of income taxes and the Protocol, signed in Beijing on 18 April 1985, will come out its full and full effect.
Promulgate this law, order that it be clothed with the seal of the State and published by the Belgian Monitor.
Given to Châteauneuf-de-Grasse, 1^er March 2000.
ALBERT
By the King:
Minister of Foreign Affairs,
L. MICHEL
Minister of Finance,
D. REYNDERS
The Secretary of State for Foreign Trade,
P. CHEVALIER
Seal of the state seal:
Minister of Justice,
Mr. VERWILGHEN
____
Note
(1) Session 1999-2000.
Senate.
Documents. - Bill, tabled on 22 November 1999, No. 2-172/1. Report, No. 2-172/2. - Text adopted by the Commission, No. 2-172/3.
Annales parliamentarians. - Discussion and voting. Session of 7 December 1999.
Room.
Documents. - Project transmitted by the Senate, No. 50-339/1. - Text adopted in plenary and subject to Royal Assent, No. 50-339/2.
Annales parliamentarians. - Discussion, meeting of 21 December 1999. - Vote, meeting of 20 January 2000.
(2) In accordance with article VII, the Protocol enters into force on 4 May 2000.

Additional Protocol between the Government of the Kingdom of Belgium and the Government of the People's Republic of China amending the Convention to avoid double taxation and to prevent tax evasion in respect of income tax and the Protocol, signed in Beijing on 18 April 1985
The Government of the Kingdom of Belgium
and
The Government of the People ' s Republic of China
Desirous of amending the Convention between the Government of the Kingdom of Belgium and the Government of the People's Republic of China with a view to avoiding double taxation and preventing tax evasion on income taxes and the Protocol, signed in Beijing on 18 April 1985 (hereinafter referred to as "the Convention" and "the Protocol"),
The following provisions were agreed:
Article I
The provisions of Article 2, paragraph 3 (b), of the Convention shall be deleted and replaced by the following provisions:
“(b) with regard to China:
(1) Individual income tax;
2° the income tax of companies with foreign investment and foreign companies;
3° local income tax,
including all deductions at the source and all pre-payments under the above-mentioned taxes,
(hereinafter referred to as "Chinese tax"). »
Article II
The provisions of Article 11, paragraph 3, of the Convention shall be deleted and replaced by the following provisions:
Ҥ3. By derogation from the provisions of paragraph 2, interest arising from a Contracting State shall be exempt from tax in that State, when it is:
(a) interest perceived by the other Contracting State;
(b) interest collected by bank or credit institutions whose capital is wholly owned by that other State or which are mutually agreed upon by the competent authorities of the two Contracting States;
(c) of interest collected by a resident of that other State because of a debt or loan financed or guaranteed directly or indirectly by an institution owned by that other State and which is mutually agreed by the competent authorities of the two Contracting States. »
Article III
Article 16 of the Convention is deleted and replaced by the following article:
“Article 16
Elevenths
§ 1^er. 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 preceding paragraph also applies to contributions received because of the exercise of duties similar to those performed by a person referred to in that paragraph.
§ 2. Compensation that a person referred to in subsection 1^er receives from the company because of the exercise of a day-to-day management or technical activity, however, may be taxed in accordance with the provisions of Article 15, as if such remuneration were received for an employee employment. »
Article IV
The provisions of Article 18, paragraph 2, of the Convention shall be supplemented by the following provision:
"Pensions paid and other payments made under a general well-being regime organized by a Contracting State to supplement the benefits provided by the social security regime of that State shall also be taxable in that State. »
Article V
The provisions of Article 23, paragraph 1^er(b) and (c) of the Convention shall be deleted and replaced by the following:
“(b) Subject to the provisions of Belgian law relating to the imputation on Belgian tax of taxes paid abroad, where a Belgian resident receives income elements that are included in his or her total income subject to Belgian tax and that consist of taxable dividends in accordance with Article 10, paragraph 2, and not exempted from Belgian tax under (c) below, in taxable interest in accordance with Article 11, paragraphs 2 or 7,
Belgium also grants an imputation on its tax with respect to the above-mentioned dividends, interests and royalties derived from investments closely related to industrial and commercial development projects in China, where these revenues are taxable in China in accordance with the provisions of the Convention and the general rules of Chinese law, but no Chinese tax has been actually collected under special and temporary measures. This imputation is calculated at the rate of 15 per cent with respect to dividends and royalties and at the rate of 10 per cent with respect to interest, but cannot exceed the fraction of the Belgian tax, calculated before deduction, corresponding to these income elements and only applies for a period of 10 years from 1^er January of the year following that of the entry into force of the Additional Protocol. This period may be extended by mutual agreement between the competent authorities of the Contracting States.
(c) The dividends that a corporation that is a resident of Belgium receives from a corporation that is a resident of China and that are taxable in China in accordance with Article 10, paragraph 2, are exempt from the tax of companies in Belgium under the conditions and limits provided for in Belgian law. »
Article VI
The provisions of items 1 to 7 of the Protocol shall be deleted and replaced by the following paragraphs:
Ҥ1. For the purposes of Article 4, paragraph 2, of the Convention, the competent authorities of the Contracting States shall draw upon the provisions of Article 4, paragraph 2, of the United Nations Model Convention concerning Double Taxation between Developed and Developing Countries.
§ 2. The provisions of Article 8 of the Convention do not affect the provisions of Article 8 of the Maritime Agreement between the Government of the Kingdom of Belgium and the Government of the People's Republic of China signed in Beijing on 20 April 1975 or the provisions of Article 10 of the Agreement between the Government of the Kingdom of Belgium and the Government of the People's Republic of China on civil air transport, signed in Beijing on 20 April 1975.
§ 3. The term "dividends" used in Article 10 of the Convention also means:
(a) income - even allocated in the form of interest - subject to the same tax system as income from shares by the legislation of the Contracting State whose debiting society is a resident;
(b) profits distributed to a resident of Belgium due to his participation in a foreign investment company established in China.
§ 4. For the purposes of Article 12, paragraph 2, of the Convention, the tax that may be collected on royalties paid for the use or concession of the use of industrial, commercial or scientific equipment is calculated on 60 per cent of the gross amount of such royalties.
§ 5. The provisions of Article 15 of the Convention shall also apply to remuneration derived by a resident of a Contracting State from his or her personal activity as a partner in a corporation other than a share corporation, which is a resident of the other Contracting State, as if such remuneration were received in respect of an employee employment.
§ 6. The provisions of Article 24, paragraph 2, of the Convention shall not prevent a Contracting State from levying its tax, in accordance with its legislation and subject to the other provisions of the Convention, to the dependants of the residents of the other Contracting State, on the understanding that the tax rate owed by a company that is a resident of that other State because of the profits of the permanent establishment which it has in the first State, shall not exceed the maximum rate of the applicable resident tax »
Article VII
The Contracting States shall notify themselves in writing and through diplomatic channels of the fulfilment of the procedures required by their respective laws for the entry into force of this Additional Protocol. The latter will enter into force on the thirtieth day from the date of the last notification. It will apply to revenues made from 1^er January of the year following that of its entry into force or relating to taxable periods beginning on or after 1^er January of the year following that of its entry into force.
Article VIII
This Additional Protocol is an integral part of the Convention and the Protocol and will remain in force as long as these acts are applicable.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Additional Protocol.
Done in Beijing on 27 November 1996, in duplicate, in French, Dutch, Chinese and English, the four texts being equally authentic.
For the Government of the Kingdom of Belgium:
For the Government of the People ' s Republic of China:

Additional Protocol between the Government of the Kingdom of Belgium and the Government of the People's Republic of China amending the agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and the Protocol signed at Beijing on april 18, 1985
The Government of the Kingdom of Belgium
and
The Government of the People's Republic of China
Desiring to amend the Agreement between the Government of the Kingdom of Belgium and the Government of the People's Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and the signed Protocol at Beijing on April 18, 1985 (hereinafter referred to respectively as "the Agreement" and "the Protocol"),
Have agreed as follows:
Article I
The provisions of paragraph 3, b) of Article 2 of the Agreement are deleted and replaced by the following provisions:
“b) with respect to China:
1° the individual income tax;
2° the income tax concerning enterprises with foreign investment and foreign enterprises;
3° the local income tax,
including all withholding taxes and all prepayments with respect to the above-mentioned taxes,
(hereinafter referred to as "Chinase tax"). »
Article II
The provisions of paragraph 3 of Article 11 of the Agreement are deleted and replaced by the following provisions:
Ҥ3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, if it is:
(a) interest derived by the other Contracting State;
b) interest received by banking or credit institutions the capital of which is wholly owned by that other State or which are mutually agreed upon by the competent authorities of both Contracting States;
c) interest received by a resident of that other State in respect of a debt-claim or a loan financed or guaranteed directly or indirectly by an institution belonging to that other State and which is mutually agreed upon by the competent authorities of both Contracting States. »
Article III
Article 16 of the Agreement is deleted and replaced by the following Article:
“Article 16
Directors' fees
§ 1. Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or of a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.
The preceding paragraph shall also apply to payments derived in respect of the discharge of similar functions as those exercised by a person referred to in the said paragraph.
§ 2. However, remuneration derived by a person referred to in paragraph 1 from the company in respect of the discharge of day-to-day functions of a managerial or technical nature, may be taxed in accordance with the provisions of Article 15, as if such remuneration were derived in respect of an employment. »
Article IV
The provisions of paragraph 2 of Article 18 of the Agreement are completed by the following provision:
« Pensions paid and other payments made under a public welfare scheme organised by a Contracting State in order to supplement the benefits of the social security system of that State may also be taxed in the said State. »
Article V
The provisions of paragraph 1, b) and c) of Article 23 of the Agreement are deleted and replaced by the following provisions:
“(b) Subject to the provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad, where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are dividends taxable in accordance with paragraph 2 of Article 10, and not exempt from Belgian tax according to subparagraph c) hereinafter, interest taxable in accordance with paragraphs 2 or 7 of Article 11, or royalties taxable in accordance with paragraphs 2 or 6 of Article 12, the Chinese credit as income taxed
Belgium shall also allow against its tax a credit with respect to the abovementioned dividends, interest and royalties derived from investments which are closely connected with industrial and commercial development projects in China, when such income is taxable in China in accordance with the provisions of the Agreement and the general rules of Chinese law but no Chinese tax has effectively been levied by virtue of special and temporary measures. This credit shall be calculated at a rate of 15 per cent with regard to dividends and royalties and at a rate of 10 per cent with regard to interest, but shall not exceed that part of the Belgian tax, as computed before the credit is given, which is attributable to these items of income and shall only apply for a period of 10 years beginning on or after the first of January of the year following that in which the Additional Protocol entered into force. This period may be extended by mutual agreement between the competent authorities of the contracting States.
(c) Dividends derived by a company which is a resident of Belgium from a company which is a resident of China and which may be taxed in China accordance with paragraph 2 of Article 10, shall be exempt from the corporate income tax in Belgium under the conditions and within the limits provided for in "Belgian law".
Article VI
The provisions of items 1 to 7 of the Protocol are deleted and replaced by the following paragraphs:
“1. For the application of paragraph 2 of Article 4 of the Agreement, the competent authorities of the Contracting States shall be guided by the provisions contained in paragraph 2 of Article 4 of the United Nations Model Double Taxation Agreement between Developed and Developing Countries.
2. The provisions of Article 8 of the Agreement shall not affect the provisions of Article 8 of the Shipping Agreement between the Government of the Kingdom of Belgium and the Government of the People's Republic of China signed at Beijing on April 20, 1975, nor the provisions of Article 10 of the Agreement between the Government of the Kingdom of Belgium and the Government of the People's Republic of China relating to civil air transport, signed at Beijing on April 20, 1975.
3. The term "dividends" as used in Article 10 of the Agreement also means:
a) income - even paid in the form of interest - which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident;
b) profits distributed to a resident of Belgium in respect of his participation in an enterprise with foreign investment established in China.
4. For the application of paragraph 2 of Article 12 of the Agreement, the tax which may be levied on royalties paid for the use of, or the right to use, industrial, commercial or scientific equipment shall be calculated on 60 per cent of the gross amount of these royalties.
5. The provisions of Article 15 of the Agreement shall also apply to remuneration received by a resident of a Contracting State in respect of his personal activity as a partner of a company, other than a company with share capital, which is a resident of the other Contracting State, as if such remuneration were derived in respect of an employment. ]
6. The provisions of paragraph 2 of Article 24 of the Agreement shall not prevent a Contracting State from taxing, in accordance with its laws and subject to the other provisions of the Agreement, residents of the other Contracting State, but it is understood that the rate of tax due by a company which is a resident of that other State in respect of the profits of its permanent establishment in the first-mentioned State shall not exceed the maximum rate of tax applicable to the profits of companies which are residents of that first-mentioned State. »
Article VII
The Contracting States shall notify each other in writing through diplomatic channels that the procedures required by their respective laws for the bringing into force of this additional Protocol have been completed. This additional Protocol shall enter into force on the thirtieth day after the date of the later of the notifications. It shall apply to income arising on or after the first day of January of the year following that in which it enters into force or to income relating to taxable periods beginning on or after the first day of January of the year following that in which it enters into force.
Article VIII
This additional Protocol, which shall form an integral part of the Agreement and of the Protocol, shall remain in force as long as the last-mentioned instruments will be applicable.
In witness whereof the undersigned, being duly authorised thereto by their respective Governments, have signed this additional Protocol.
Done at Beijing on 27 November 1996, in duplicate, in duplicate, in the French, Dutch, Chinese and English languages, the four texts being equally authoritative.
For the Government of The Kingdom of Belgium :
For the Government of the People's Republic of China: