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9 JUIN 1999. - An Act to approve the Protocol signed in Manila on 11 March 1996, amending the Convention between the Kingdom of Belgium and the Republic of the Philippines to avoid double taxation and to prevent tax evasion on income tax, signed in Manila on 2 October 1976 (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 Protocol, signed in Manila on 11 March 1996, amending the Convention between the Kingdom of Belgium and the Republic of the Philippines to avoid double taxation and to prevent tax evasion on income tax, signed in Manila on 2 October 1976, 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 in Brussels, 9 June 1999.
ALBERT
By the King:
Minister of Foreign Affairs,
E. DERYCKE
Deputy Prime Minister and Minister of Economy and Telecommunications, in charge of Foreign Trade,
E. DI RUPO
Minister of Finance,
J.-J. VISEUR
Seal of the state seal:
Minister of Justice,
T. VAN PARYS
____
Note
(1) 1998-1999 session:
Senat.
Documents. - Bill, tabled on 29 March 1999, No.1-1337/1. - Report, no. 1-1337/2. - Text adopted by the Commission, No. 1-1337/3.
Annales parliamentarians. - Discussion. Meeting of 15 April 1999. - Vote. Meeting of 15 April 1999.
Room.
Documents. - Project transmitted by the Senate, No. 49-2179/1. - Text adopted in plenary and subject to Royal Assent, No. 49-2179/2.
Annales parliamentarians. - Discussion. Meeting of 29 April 1999. - Vote. Session of 3 May 1999.
(2) In accordance with article 00, the Protocol shall enter into force on 24 December 1999.

Protocol amending the Agreement between the Republic of the Philippines and the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed in Manila on 2 October 1976
The Government of the Republic of the Philippines and the Government of the Kingdom of Belgium,
Desiring to conclude a Protocol to amend the Agreement between the Republic of the Philippines and the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed in Manila on 2 October 1976 (hereinafter referred to as "the Agreement"),
Have agreed as follows:
Article I
Article 2 of the Agreement is amended by substituting paragraph 3 with the following:
“3. The existing taxes to which the Agreement shall apply are in particular :
(a) in Belgium:
(i) the individual income tax;
(ii) the corporate income tax;
(iii) the income tax on legal entities;
(iv) the income tax on non-residents;
(v) the special levy assimilated to the individual income tax;
(vi) the supplementary crisis contribution,
including the prepayments, the surcharges on these taxes and prepayments, and the supplements to the individual income tax,
(hereinafter referred to as "Belgian tax");
(b) in the Philippines:
the income tax imposed under Title II and the stock transaction tax in accordance with Section 124-A of the National Internal Revenue Code of the Republic of the Philippines,
(hereinafter referred to as "Philippine tax"). »
Article II
Article 3 of the Agreement is amended by substituting sub-paragraphs (a) and (b) of paragraph 1, with the following:
"(a) the term "Philippines" mean the Republic of the Philippines; used in a geographic sense, it means the archipelagic territory comprising the Republic of the Philippines as defined in its Constitution and laws, including adjacent areas and such other areas as the territorial sea, other areas in the sea and in the air within which the Philippines has sovereignty, jurisdiction or similar rights under international law;
(b) the term "Belgium" means the Kingdom of Belgium; used in a geographical sense, it means the territory of the Kingdom of Belgium, including the territorial sea and any other area in the sea and in the air within which the Kingdom of Belgium, in accordance with international law, exercises sovereign rights or its jurisdiction; »
Article III
Article 10 of the Agreement is amended by substituting paragraphs 2, 3 and 4 with the following:
“2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws 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) 10 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 10 per cent of the capital of the company paying the dividends;
(b) 15 per cent of the gross amount of the dividends in all other cases.
This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
3. The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income -even paid in the form of interest- which is treated as income from shares by the tax legislation of the State of which the paying company is a resident.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. »
Article IV
Article 11 of the Agreement is substituted with the following:
“Article 11
Interest
1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws 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 in which it arises if it is:
(a) interest paid in respect of a bond, debenture or other similar obligation of the Government of that Contracting State or of a political subdivision or local authority thereof; and
(b) interest paid in respect of a loan made, guaranteed or insured or a credit extented, guaranteed or insured by such institution as is specified and agreed in letters exchanged between the competent authorities of the Contracting States.
4. The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, payments by well as income assimilated to or taxed in the same way income However, the term "interest" shall not include for the purpose of this Article interest regarded as dividends under paragraph 3 of Article 10.
5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
6. Interest shall be deemed to arise in a Contracting State when the pay is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
7. Where, by reason of a special relationship between the pay and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the pay and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. »
Article V
Article 12 of the Agreement is substituted with the following:
“Article 12
Royalties
1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 15 per cent of the gross amount of the royalties.
3. The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films and films or tapes for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific experience, or for information concerning industrial, commercial
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
5. Royalties shall be deemed to arise in a Contracting State when the pay is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
6. Where, by reason of a special relationship between the pay and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the pay and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. »
Article VI
Article 16 of the Agreement is substituted with the following:
“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 a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.
The preceding provision shall also apply to payments derived in respect of the discharge of functions which, under the laws of the Contracting State of which the company is a resident, are regarded as functions of a similar nature as those exercised by a person referred to in the said provision.
2. 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 and 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, may be taxed in the Contracting State where such resident exercises his activity. »
Article VII
Article 18 of the Agreement is substituted with the following:
“Article 18
Pensions and similar payments
1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
2. Notwithstanding the provisions of paragraph 1, payments received by a resident of a Contracting State under the social security legislation of the other Contracting State shall be taxable only in that other State. »
Article VIII
Article 23 of the Agreement is substituted with the following:
“1. In the case of Belgium, double taxation shall be avoided as follows:
(a) Where a resident of Belgium derives income which is taxed in the Philippines in accordance with the provisions of this Agreement, other than those of paragraph 2 of Article 10, of paragraphs 2 and 7 of Article 11 and of paragraphs 2 and 6 of Article 12, Belgium shall exempt such income from tax but may, in calculating the amount of tax on the remaining income of that resident, apply the rate of tax which would have been applicable if such income had not been exempted.
(b) (i) 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 paragraph 2 or 7 of Article 11, or royalties taxable in accordance with paragraphs 2 or Philipvi 6 of income
(ii) Belgium shall also allow against its tax a credit with respect to dividends, interest and royalties derived by a resident of Belgium and included in the aggregate income for Belgian tax purposes of this resident, when Philippine tax may be charged on these items of income according to the provisions of the Agreement and the general law of the Philippines, but no Philippine tax is effectively levied under special and temporary measures which are designed to promote investments directly connected with development projects in the Philippines and which authorities are agreed Such credit shall be calculated at the rate of 10 per cent of the gross amount of the income, 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 the first ten years for which the Protocol amending the Agreement is effective.
(c) Dividends within the meaning of paragraph 3 of Article 10, derived by a company which is a resident of Belgium from a company which is a resident of the Philippines, shall be exempt from the corporate income tax in Belgium under the conditions and within the limits provided for in Belgian law.
(d) Where, in accordance with Belgian law, losses incurred by an enterprise carried on by a resident of Belgium in a permanent establishment situated in the Philippines, have been effectively deducted from the profits of that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph (a) shall not apply in Belgium to the profits of other taxable periods attributable to that establishment to the extent that those profits have also been exempted from tax in the Philippines by reason of compensation for the said losses.
2. In the Philippines, in accordance with the provisions and subject to the limitations of the laws of the Philippines, as may be amended from time to time without changing the general principles hereof, double taxation shall be avoided in the following manner:
(a) In accordance with the principles of this Agreement, taxes paid or increasedd under the laws of Belgium, whether directly or by deduction, in respect of income from sources within Belgium shall be allowed as a credit against Philippine tax subject to the following limitations:
(i) the amount of credit in respect to the tax paid or increasedd to Belgium shall not exceed the same proportion of taxes covered by the Agreement against which such credit is taken, which the taxpayer's taxable income from sources within Belgium bears to his entire taxable income for the same taxable year; and
(ii) the total amount of the credit shall not exceed the same proportion of the taxes covered by the Agreement against which such credit is taken, which the taxpayer's taxable income from sources without the Philippines bears to his entire taxable income for the same taxable year.
(b) In the case of a Philippine corporation owning directly or indirectly more than 50 per cent of the voting stock of a Belgian company from which it receives dividends in any taxable year, the Philippines shall also allow credit for the appropriate amount of taxes paid or increasedd to Belgium by a Belgian paying company such dividends with respect to such profits out of which such dividends are paid. The deduction shall not, however, exceed that part of the Philippine income tax, as computed before the deduction is given, which is appropriate to the income which may be taxed in Belgium. »
Article IX
Article 28 of the Agreement is amended by deleting paragraph 1 and by renumbering paragraphs 2, 3, 4, 5 and 6 as paragraphs 1, 2, 3, 4 and 5.
Article X
1. This Protocol shall be ratified and the instruments of ratification shall be exchanged at Brussels as soon as possible.
2. The Protocol shall enter into force thirty days after the date of the exchange of the instruments of ratification and its provisions shall have effect :
(a) with respect to all taxes covered by the Agreement due at source on income credited or payable on or after 1 January of the year next following the year in which the instruments of ratification have been exchanged;
(b) with respect to all taxes covered by the Agreement other than taxes due at source, on income of any accounting period beginning on or after 1 January of the year next following the year in which the instruments of ratification have been exchanged.
Article XI
This Protocol, which shall form an integral part of the Agreement, shall remain in force as long as the Agreement itself remains in force.
IN WITNESS WHEREOF, the undersigned duly authorised thereto, have signed this Protocol.
DONE in duplicate at Manila, Philippines on March 11, 1996 in the English language.

TRADUCTION
Protocol amending the Convention between the Kingdom of Belgium and the Republic of the Philippines to avoid double taxation and to prevent tax evasion on income tax, signed in Manila on 2 October 1976
The Government of the Kingdom of Belgium and the Government of the Republic of the Philippines,
Desirous of concluding a Protocol to amend the Convention between the Kingdom of Belgium and the Republic of the Philippines to avoid double taxation and to prevent tax evasion on income tax signed in Manila on 2 October 1976 (hereinafter referred to as "the Convention"),
The following provisions were agreed:
Article I
In Article 2 of the Convention, paragraph 3 is replaced by the following:
“3. Current taxes to which the Convention applies include:
(a) in Belgium:
(i) the tax of natural persons;
(ii) corporate tax;
(iii) corporation tax;
(iv) non-resident tax;
(v) the special contribution assimilated to the tax of natural persons;
(vi) 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) The Philippines:
the income tax collected under Part II and the exchange transaction tax ("tax transaction inventory") collected in accordance with Section 124-A of the National Internal Revenue Code of the Republic of the Philippines,
(hereinafter referred to as the Philippine tax). »
Article II
In Article 3 of the Convention, subparagraphs (a) and (b) of paragraph 1 are replaced by the following:
"(a) the term "Belgium" means the Kingdom of Belgium; employed in a geographical sense, it designates the territory of the Kingdom of Belgium, including the territorial sea and the maritime areas and the airspace on which, in accordance with international law, the Kingdom of Belgium exercises sovereign rights or jurisdiction;
(b) the term "Philippines" means the Republic of the Philippines; Used in a geographical sense, it designates the territory of the archipelago comprising the Republic of the Philippines as defined in its Constitution and laws, including adjacent areas and other areas, such as the territorial sea, other maritime zones and air spaces, on which the Philippines has sovereignty, jurisdiction or similar rights under international law;"
Article III
In Article 10 of the Convention, paragraphs 2, 3 and 4 are replaced by the following:
“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) 10 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 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 law of the State whose debiting society is a resident.
4. The provisions of paragraphs 1 and 2 shall not apply when the beneficial owner of the dividends, a resident of a Contracting State, exercises in the other Contracting State whose dividend paying company is a resident, either an industrial or commercial activity through a permanent establishment located therein or a liberal profession 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. »
Article IV
Article 11 of the Convention is replaced by the following:
“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 paid due to borrowing obligations or other similar dependants of the Government of that Contracting State or any of its political subdivisions or local authorities; and
(b) of interest paid on the basis of a loan made, guaranteed or insured, or a credit granted, guaranteed or insured, by any institution designated and approved by exchange of letters between the competent authorities of the Contracting States.
4. The term "interests" used in this article refers to the income of receivables of any kind, whether or not accompanied by mortgage guarantees or a clause of participation in the profits of the debtor, including the income of public funds and obligations of borrowings, including the premiums and lots attached to these securities, as well as the incomes assimilated to the incomes of loaned or subject to the same regime as these by the tax legislation of the State However, the term "interest" does not include, for the purposes of this section, interest treated as dividends under section 10, paragraph 3.
5. The provisions of paragraphs 1, 2 and 3 shall not apply where the beneficial owner of the interest, a resident of a Contracting State, carries on in the other Contracting State in which the interest arises, either an industrial or commercial activity through a permanent establishment located therein or a liberal profession 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 V
Article 12 of the Convention is replaced by the following:
“Article 12
Claims
1. Royalties from a Contracting State and paid to a resident of the other Contracting State shall be taxable in that other State.
2. However, such royalties are also taxable in the Contracting State in which they arise and according to the law of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 15 per cent of the gross amount of the royalties.
3. The term "debtedness" used in this article means the remuneration of any kind paid for the use or concession of the use of a copyright on a literary, artistic or scientific work, including film films and films or tapes registered for radio or television, a patent, a trademark or a trade mark, a drawing or a model, a plan, a plan
4. The provisions of paragraphs 1 and 2 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 a liberal profession 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.
5. The royalties shall be deemed to come from a Contracting State when the debtor is that State itself, a political subdivision, a local authority or a resident of that State. However, where the debtor of royalties, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment, or a fixed base, for which the contract giving rise to the payment of royalties has been concluded and which bears the charge of such royalties, these shall be deemed to be from the State where the permanent establishment, or the fixed base, is located.
6. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of royalties, taking into account the benefit for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention. »
Article VI
Article 16 of the Convention is replaced by the following:
“Article 16
Elevenths
1. The fortieth, attendance and other similar remuneration that a resident of a Contracting State receives as a member of the board of directors or of a similar body of a corporation that is a resident of the other Contracting State may be taxed in that other State.
The foregoing provision also applies to remuneration received because of the performance of functions which, under the legislation of the Contracting State whose company is a resident, are treated as functions of a nature similar to those exercised by a person referred to in that provision.
2. The remuneration that a person referred to in paragraph 1 shall receive from the corporation as a result 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, which is a resident of the other Contracting State, shall be taxable in the Contracting State where that resident exercises his or her activity. »
Article VII
Article 18 of the Convention is replaced by the following:
“Article 18
Pensions and similar allocations
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. Notwithstanding the provisions of paragraph 1, the allowances that a resident of a Contracting State receives in accordance with the social legislation of the other Contracting State shall be taxable only in that other State. »
Article VIII
Article 23 of the Convention is replaced by the following:
“1. With regard to Belgium, double taxation is avoided as follows:
(a) Where a Belgian resident receives income that is taxed in the Philippines 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, paragraphs 2 and 6, Belgium exempts from tax these incomes, but it may, in calculating the amount of its taxes on the rest of that resident's income, apply the same rate as if the income in question had not been exempted.
(b) (i) 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
(ii) Belgium also grants an imputation on its tax, in respect of the dividends, interests and royalties collected by a Belgian resident and included in the total income subject to the Belgian tax of that resident, when Philippine tax can be taken from these income elements in accordance with the provisions of the Convention and the general legislation of the Philippines, but that no Philippine tax is actually collected directly under special and temporary development measures to promote This imputation is calculated at a rate of 10 p.c. of the gross amount of income, but does not exceed the fraction of the Belgian tax, calculated before imputation, corresponding to these income elements and only applies for the first ten years from the taking of effects of the Protocol amending the Convention.
(c) Dividends within the meaning of Article 10, paragraph 3, that a corporation that is a resident of Belgium receives from a company that is a resident of the Philippines are exempted from the corporate tax in Belgium, under the conditions and limits provided for in 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 the Philippines were effectively deducted from the profits of that undertaking for its taxation in Belgium, the exemption provided in (a) does not apply in Belgium to the profits of other taxable periods that are attributable to that establishment, to the extent that such profits were also exempted from tax in the Philippines due to their compensation.
2. In the Philippines, in accordance with the provisions and subject to the limitations of the legislation of the Philippines, as amended periodically without the general principles of the following being amended, double taxation is avoided as follows:
(a) In accordance with the principles of this Convention, taxes paid or due under Belgian law, either directly or by deduction, on income from sources located in Belgium are charged on Philippine tax subject to the following limitations:
(i) the amount charged as a result of the tax paid or due to Belgium may not exceed the fraction of the taxes covered by the Convention on which that imputation is made, which corresponds to the fraction that the taxable income from Belgian sources of that taxpayer is in relation to the total of its taxable income for the same taxation year; and
(ii) the total amount charged shall not exceed the portion of the taxes covered by the Convention on which that imputation is made, which is the fraction that taxable income from sources outside the Philippines of that taxpayer is in relation to the total of its taxable income for the same taxation year.
(b) In the case of a Philippine company holding directly or indirectly more than 50 per cent of the voting shares of a Belgian company whose dividends it receives in any taxation year, the Philippines also grants an imputation corresponding to the amount of taxes that a Belgian company distributing such dividends pays or owes Belgium because of the profits that are used to pay such dividends. This imputation, however, cannot exceed the fraction of Philippine tax on income, calculated before imputation, which corresponds to taxable income in Belgium. »
Article IX
In article 28 of the Convention, paragraph 1 is deleted and paragraphs 2, 3, 4, 5 and 6 become paragraphs 1, 2, 3, 4 and 5.
Article X
1. This Protocol will be ratified and instruments of ratification will be exchanged in Brussels as soon as possible.
2. The Protocol shall enter into force thirty days after the date of the exchange of instruments of ratification and its provisions shall apply:
(a) in respect of all taxes due to the source covered by the Convention, to the income awarded or paid from 1^er January of the year immediately following that of the exchange of instruments of ratification;
(b) in respect of all taxes covered by the Convention other than taxes due at source, at the income of any accounting period beginning on or after 1^er January of the year immediately following that of the exchange of instruments of ratification.
Article XI
This Protocol, which is an integral part of the Convention, will remain in force as long as the Convention itself remains in force.
In faith, duly authorized undersigned to this effect, have signed this Protocol.
Done in Manila on 11 March 1996, in duplicate, in the English language.