belgiquelex.be - Carrefour Bank of Legislation

9 JUIN 1999. - An Act to assent to the Convention between the Kingdom of Belgium and the Socialist Republic of Vietnam to avoid double taxation and to prevent tax evasion in respect of taxes on income and property, and the Protocol, signed in Hanoi on 28 February 1996 (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 Socialist Republic of Vietnam to avoid double taxation and to prevent tax evasion on income and wealth taxes, and the Protocol, signed in Hanoi on 28 February 1996, will come out their 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, Head of External 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:
Senate.
Documents. - Bill tabled on 10 March 1999, No. 1-1306/1. - Report, n°1-1306/2. - Text adopted by the Commission, No. 1-1306/3.
Annales parliamentarians. - Discussion. Meeting of 15 April 1999. - Vote. Meeting of 15 April 1999.
Room.
Documents. - Project transmitted by the Senate, No. 49-2174/1. - Text adopted in plenary session and subject to Royal Assent, No. 49-2174/2.
Annales parliamentarians. - Discussion. Meeting of 23 April 1999. - Vote. Meeting of 29 April 1999.
(2) In accordance with article 29 of the Convention, the Convention entered into force on 25 June 1999.

AGREEMENT BETWEEN THE SOCIALIST REPUBLIC OF VIETNAM AND THE KINGDOM OF BELGIUM FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM
AND
THE GOVERNMENT OF THE KINGDOM OF BELGIUM,
Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, have agreed as follows:
CHAPTER I. - Scope of the Agreement
Article 1
Personal scope
This Agreement shall apply to persons who are residents of one or both of the Contracting States.
Article 2
Taxes covered
1. This Agreement shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
2. There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
3. The existing taxes to which the Agreement shall apply are in particular :
(a) in the case of Vietnam:
(1) the individual income tax;
(2) the profits tax (included the foreign petroleum sub-contractor and the foreign contractor tax);
(3) the profit remittance tax;
(hereinafter referred to as "Vietnamese tax");
(b) in the case of Belgium:
(1) the individual income tax;
(2) the corporate income tax;
(3) the income tax on legal entities;
(4) the income tax on non-residents;
(5) the special levy assimilated to the individual income tax;
(6) the supplementary crisis tax,
including the prepayments, the surcharges on these taxes and prepayments, and the supplements to the individual income tax;
(hereinafter referred to as "Belgian tax").
4. The Agreement shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of important changes which have been made in their respective taxation laws.
CHAPTER II. - Definitions
Article 3
General definitions
1. For the purposes of this Agreement, unless the context otherwise requires:
(a) (1) the term "Vietnam" means the Socialist Republic of Vietnam; when used in a geographical sense, it means all its national territory, including its territorial sea, and any area beyond its territorial sea, within which Vietnam, in accordance with international law has sovereign rights with respect to the exploration and exploitation of natural resources of the sea-bed and subsoil and of the superjacent waters;
(2) the term "Belgium" means the Kingdom of Belgium; when used in a geographical sense, it means the national territory, the territorial sea and any other area in the sea within which Belgium, in accordance with international law, exercises sovereign rights or its jurisdiction;
(b) the terms "a Contracting State" and "the other Contracting State" mean Vietnam or Belgium, as the context requires;
(c) the term "person" includes an individual, a company and any other body of persons;
(d) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes;
(e) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
(f) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
(g) the term "competent authority" means:
(1) in the case of Vietnam, the Minister of Finance or his authorised representative, and
(2) in the case of Belgium, the Minister of Finance or his authorised representative;
(h) the term "national" means:
(1) all individuals possessing the nationality of a Contracting State;
(2) all legal persons, partnerships and associations deriving their status as such from the laws in force in a Contracting State.
2. As regards the application of the Agreement by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies.
Article 4
Resident
1. For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.
2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
(a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);
(b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;
(c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;
(d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.
Article 5
Permanent establishment
1. For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
2. The term "permanent establishment" includes especially :
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources, and
(g) a warehouse.
3. The term "permanent establishment" likewise encompasses:
(a) a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only where such site, project or activities continue for a period of more than six months;
(b) the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the country for a period or periods aggregating more than six months within any twelve-month period.
4. Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:
(a) the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;
(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person :
(a) has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; gold
(b) has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise.
6. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.
7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.
CHAPTER III. - Taxation of income
Article 6
Income from immovable property
1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
2. The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the consideration right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.
3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.
Article 7
Business profits
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 situated therein. If the enterprise carries on business as aforesaid, the profits of the may be taxed in the other Contracting State but only so much of them as is attributable to:
(a) that permanent establishment;
(b) sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; gold
(c) other business activities carried on in that other State of the same or similar kind as those effected through that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
3. In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of an interest on business, by way
4. Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of the tax liability of a person in cases where the information available to the competent authority of that State is inadequate to determine the profits to be attributed to a permanent establishment, provided that such law shall be applied, so far as the information available to the competent authority permits, consistently with the principles laid down in this Article.
5. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an contributionionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an contributionionment as may be customary; the method of contributionionment adopted shall, however, be such that the result shall be in accordance with the principles laid down in this Article.
6. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
7. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
8. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.
Article 8
Shipping and air transport
1. Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.
2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
Article 9
Associated enterprises
1. Where
(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,
and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have increasedd to one of the enterprises, but, by reason of those conditions, have not so increasedd, may be included in the profits of that enterprise and taxed accordingly.
2. Where a Contracting State includes in the profits of an enterprise of that State - and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have increasedd to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make such adjustment as it considers appropriate to the amount of the tax charged there. In determining such adjustment, due regard shall be had to the other provisions of the Agreement and the competent authorities of the Contracting States shall, if necessary, consult each other.
Article 10
Dividends
1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
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) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly or indirectly at least 50 per cent of the capital of the company paying the dividends;
(b) 10 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly or indirectly at least 25 per cent but less than 50 per cent of the capital of the company paying the dividends;
(c) 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 internal 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 independent personal 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.
5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except in so far as such dividends are paid to a resident of that other State or in so far the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject to the dividend's undistributed
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 interest paid to the other Contracting State, a political subdivision or a local authority of that State, the National Bank of that State or any institution the capital of which is wholly owned by that State or the political subdivisions or local authorities of that State.
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; however, the term "interest" shall not include for the purpose of this Article penalty charges for late payment nor interest regarded as dividends under the first sentence of 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 independent 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 in the Contracting State in which the interest arises according to the law of that State.
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 :
(a) 5 per cent of the gross amount of the royalties if they are paid as consideration for the use of, or the right to use, any patent, design or model, plan, secret formula or process, or for information concerning industrial or scientific experience;
(b) 10 per cent of the gross amount of the royalties if they are paid as consideration for the use of, or the right to use, a trade mark or for information concerning commercial experience; and
(c) 15 per cent of the gross amount of the royalties in all other cases.
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 equipment or for information concerning industrial, commercial or scientific experience.
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 independent 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 in the Contracting State in which the royalties arise, according to the law of that State.
Article 13
Capital gains
1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment that (alone or with the whole enterprise) or of such fixed base, may be taxed in
3. Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
4. Gains derived by a resident of a Contracting State from the alienation of shares or comparable interests in a company, the assets of which consist wholly or principally of immovable property situated in the other Contracting State, may be taxed in that other State. For the purpose of this paragraph the term "immovable property" does not include immovable property in which the business of the company is carried on. This paragraph shall not apply if such gain is derived in the course of a corporate reorganization, merger, division or similar transaction.
5. Gains derived by an individual who is a resident of a Contracting State from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of the other Contracting State may be taxed in that other State if this individual holds, alone or together with other individuals who are not residents of the other Contracting State, directly or indirectly at least 25 per cent of the capital of the company at any moment during the five year preceding the alienation.
6. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5, shall be taxable only in the Contracting State of which the alienator is a resident.
Article 14
Independent personal services
1. Income derived by a resident of a Contracing State in respect of professional services or other activities of an independent character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base.
2. The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.
Article 15
Dependent personal services
1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned, and
(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State, may be taxed in that State.
Article 16
Managers of companies
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.
This 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 treated as functions analogous to 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, with regard to the discharge of day-to-day functions of a managerial or technical nature and remuneration derived by a resident of a Contracting State from 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 accordance with the provisions of Article 15.
Article 17
Artists and sportsmen
1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artist, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.
2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such increaseds not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.
Article 18
Pensions
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, pensions and other allowances, periodic or non periodic, paid under the social security legislation of a Contracting State or under a public scheme organised by a Contracting State in order to supplement the benefits of that legislation may be taxed in that State.
Article 19
Government service
1.(a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:
(1) is a national of that State; gold
(2) did not become a resident of that State solely for the purpose of rendering the services.
2.(a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.
4. Remuneration paid by a Contracting State to an individual in respect of an activity exercised in the other Contracting State under any assistance or cooperation agreement concluded between both Contracting States may only be taxed in the first State.
Rule 20
Students
1. Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.
2. Remuneration which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training, derives from an employment in that first-mentioned State shall not be taxed in that State provided that such employment is exercised in connection with the education or training during the normal duration of this education or training and provided that the remuneration does not exceed in any calendar year 120.000 Belgian francs or its equivalent in Vietnamese currency, as the case may be.
Article 21
Other income
1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement and which are taxed in that State shall be taxable only in that State.
2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income 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.
CHAPTER IV. - Taxation of capital
Article 22
Capital
1. Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State.
2. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or by movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.
3. Capital represented by ships and aircraft operated in international traffic by an enterprise of a Contracting State or by movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.
CHAPTER V. - Methods of elimination of double taxation
Article 23
1. In the case of Vietnam, double taxation shall be avoided as follows:
Where a resident of Vietnam derives income or owns elements of capital which in accordance with the provisions of this Agreement, may be taxed in Belgium, Vietnam shall allow:
(a) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Belgium;
(b) as a deduction from the tax on the elements of capital of that resident, an amount equal to the capital tax paid in Belgium.
Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the elements of capital which may be taxed in Belgium.
2. In the case of Belgium, double taxation shall be avoided as follows:
(a) Where a resident of Belgium derives income or owns elements of capital which may be taxed in Vietnam in accordance with the provisions of the 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 or such elements of capital from tax but may, in calculating the amount of tax on the remaining income or capital of that resident, take into account the exempted income or elements
(b) 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 sub-paragraph (c), 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 Vietnamese tax paid on that subsequent income shall be allowed as a credit against Belgian tax relating to such taxes in accordance However, Belgium shall allow against its tax a credit with respect to interest and royalties derived from direct investment and included in the aggregate income for Belgian tax purposes of its residents, when Vietnamese tax may be charged on these items of income according to the provisions of the Agreement but no Vietnamese tax is effectively levied or Vietnamese tax is exempted or levied at a lower rate than those provided in Articles 11 and 12, under special measures of the internal law of Vietnam to promote the economic development of Vietnam. Such credit shall be calculated at a rate of 10 per cent but shall only apply for the first ten years for which the Agreement is effective. The competent authorities of the Contracting States may consult each other to determine whether this period shall be extended. The term "interest and royalties derived from direct investment" means interest paid in respect of loans, or royalties paid in respect of contracts, which are directly and hardably connected with industrial or commercial development projects in Vietnam.
(c) Dividends derived by a company which is a resident of Belgium from a company which is a resident of Vietnam, and which may be taxed in Vietnam in 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. However, dividends derived by a company which is a resident of Belgium from a company which is a resident of Vietnam and paid out of profits which are temporarily exempt from the tax on profits of the enterprise under special measures of the internal law of Vietnam to promote the economic development of Vietnam, shall also be exempt from the corporate income tax in Belgium during the first ten years for which the Agreement is effective. The competent authorities of the Contracting States may consult each other to determine whether this period shall be extended.
(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 Vietnam, 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 Vietnam by reason of compensation for the said losses.
CHAPTER VI. - Special provisions
Article 24
Non-discrimination
1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.
2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This paragraph shall not prevent that other State from imposing on the profits attributable to a permanent establishment in that State of a company which is a resident of the first-mentioned State further tax not exceeding 10 per cent on such profits as far as they are remitted from the permanent establishment to the head office. Moreover, this paragraph shall not apply to the taxation of permanent establishments in Vietnam of enterprises in respect of oil exploration or production activities or in respect of activities which in the case of Vietnamese enterprises are subject to tax under the Law on Agriculture Land Tax Using. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.
4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.
5. The provisions of this Article shall apply only to the taxes which are the subject of this Agreement.
Rule 25
Mutual Agreement procedure
1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident, or if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement.
2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement.
3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement.
4. The competent authorities of the Contracting States shall agree on administrative measures necessary to carry out the provisions of the Agreement and particularly on the proofs to be furnished by residents of either Contracting State in order to benefit in the other State from the exemptions or reductions in tax provided for in the Agreement.
5. The competent authorities of the Contracting States shall communicate directly with each other for the application of the Agreement.
Rule 26
Exchange of information
1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.
2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public) or national security.
Rule 27
Aid in recovery
1. The Contracting States shall lend aid and assistance to each other in order to notify and recover the taxes mentioned in Article 2 as well as overcharges, additions, interest, costs and fines of a non penal nature.
2. On the request of the competent authority of a Contracting State, the competent authority of the other Contracting State shall secure, in accordance with the legal provisions and regulations applicable to the notification and recovery of the said taxes of the latter State, the notification and the recovery of fiscal debt-claims referred to in paragraph 1 which are due in the first mentioned State. Such debt-claims shall not be considered as preferential claims in the requested State and that State shall not be obliged to apply any means of enforcement which are not authorised by the legal provisions and regulations of the requesting State.
3. Requests referred to in paragraph 2 shall be supported by an official copy of the instrument permitting the execution, accompanied where appropriate, by an official copy of any final administrative or judicial decision.
4. With regard to fiscal debt-claims which are open 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 protective measures provided for in the legislation of that other State; the provisions of paragraphs 1 to 3 shall apply, mutatis mutandis, to such measures.
5. The provisions of paragraph 1 of Article 26 shall also apply to any information which, by virtue of this Article, is supplied to the competent authority of a Contracting State.
Rule 28
Members of a diplomatic mission or consular post
Nothing in this Agreement shall affect the fiscal privileges of members of a diplomatic mission or consular post under the general rules of international law or under the provisions of special agreements.
CHAPTER VII. - Final provisions
Rule 29
Entry into force
1. Each of the Contracting States shall notify to the other in writing through the diplomatic channel the completion of the procedures required by its legislation for the entry into force of this Agreement. The Agreement shall enter into force on the date of the later of these notifications.
2. The Agreement shall have effect :
(a) in Vietnam:
(1) in respect of taxes withheld at source, in relation to taxable amount paid on or after January 1 of the year next following the calendar year in which the Agreement enters into force, and in subsequent calendar years;
(2) in respect of other Vietnamese taxes, in relation to income, profits or gains arising in the calendar year next following the calendar year in which the Agreement enters into force, and in subsequent calendar years;
(3) in respect of taxes on capital charged on elements of capital existing on January 1 of the year next following that in which the Agreement enters into force, and in subsequent calendar years;
(b) in Belgium:
(1) with respect to taxes due at source on income credited or payable on or after January 1 in the year next following the year in which the Agreement enters into force;
(2) with respect to other taxes charged on income of taxable periods beginning on or after January1 of the year next following the year in which the Agreement enters into force;
(3) with respect to taxes on capital charged on elements of capital existing on January 1 in any year next following the year in which the Agreement enters into force.
Rule 30
Termination
This Agreement shall remain in force until terminated by a Contracting State; but either Contracting State may terminate the Agreement, through diplomatic channels, by giving to the other Contracting State, written notice of termination not later than the 30th June of any calendar year from the fifth year following that in which the Agreement enters into force. In the event of termination before July 1 of such year, the Agreement shall cease to have effect :
(a) in Vietnam:
(1) in respect of taxes withheld at source, in relation to taxable amount paid on or after January 1 of the year next following the calendar year in which the notice of termination is given, and in subsequent calendar years;
(2) in respect of other Vietnamese taxes, in relation to income, profits or gains arising in the calendar year next following the calendar year in which the notice of termination is given, and in subsequent calendar years;
(3) in respect of taxes on capital charged on elements of capital existing on January 1 of the year next following that in which the notice of termination is given, and in subsequent calendar years;
(b) in Belgium:
(1) with respect to taxes due at source on income credited or payable on or after January 1 of the year next following the year in which the notice of termination is given;
(2) with respect to other taxes charged on income of taxable periods beginning on or after December 31 of the same year;
(3) with respect to taxes on capital charged on elements of capital existing on January 1 of the same year.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective Governments, have signed this Agreement.
DONE in duplicate at Hanoi, this 28th day of February of the year one thousand nine hundred and ninety six, in the English language.
For the Government of the Socialist Republic of Vietnam:
H.E. NGUYEN MANI CAM
Minister of Foreign Affairs
For the Government of the Kingdom of Belgium :
H.E. ERIK DERYCKE
Minister of Foreign affairs
PROTOCOL
At the moment of signing the Agreement between the Socialist Republic of Vietnam and the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, the undersigned have agreed that the following provisions shall form an integral part of the Agreement.
I. Ad Article 7:
1. In respect of paragraph 1 of Article 7, profits derived from the sale of goods or merchandise of the same or similar kind as those sold, or from other business activities of the same or similar kind as those effected, through a permanent establishment, may be considered attributable to that permanent establishment if it is proved that this transaction has been resorted to in order to avoid taxation in the State where the permanent establishment is situated.
2. In respect of paragraphs 1 and 2 of Article 7, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific or premises, or of public works, the profits attributable to a permanent establishment situated in a Contracting State through which an enterprise of the other Contracting State carries on business shall be determined only on the basis of that part of the contract that is effectively carried out by the permanent establishment in the Contracting State where it is situated.
II. Ad Article 10:
1. For so long as, under the provisions of Belgian law referred to in paragraph 2 (c), first sentence of Article 23, dividends derived by a company which is a resident of Belgium from a company which is a resident of Vietnam are exempt from corporate income tax in Belgium, the percentage provided for in paragraph 2 (b) of Article 10 shall be reduced to 7 per cent of the gross amount of the dividends.
2. The limitation provided for in paragraph 2 of Article 10 includes in the case of Vietnam the profit remittance tax.
III. Ad Article 12:
It is understood that the provisions of Articles 7 and 14 shall apply to services performed by a resident of a Contracting State in the other Contracting State. Notwithstanding the preceding sentence, in case there is no permanent
establishment or fixed base, payments for technical services performed by a resident of a Contracting State in the other Contracting State shall be deemed to be payments to which the provisions of sub-paragraph (a) of paragraph 2 of Article 12 apply.
IV. Ad Article 23:
It is understood that the second sentence of paragraph 2 (c) of Article 23 will only apply if dividends are paid out of profits generated by substantive business operations carried on in Vietnam by the company paying the dividends.
V. Ad Article 24:
1. Notwithstanding the provisions of paragraph 2 of Article 24, the percentage provided for in that paragraph shall be reduced to 7 per cent of the profits remitted from the permanent establishment to the head office as long as the profits remitted are exempt from tax in Belgium under sub-paragraph (a) of paragraph 2 of Article 23 of the Agreement.
2. For so long as Vietnam continues to grant investors licenses under the Law on Foreign Investment in Vietnam, which specify the taxation to which the investor shall be subjected, such taxation shall not be regarded as breaching the terms of paragraphs 2 and 3 of Article 24.
In witness whereof the undersigned, being duly authorized thereto by their respective Governments, have signed this Protocol.
Done in duplicate at Hanoi, this 28th day of February of the year one thousand nine hundred and ninety six, in the English language.
For the Government of the Socialist Republic of Vietnam:
H.E. NGUYEN MANI CAM
Minister of Foreign Affairs
For the Government of the Kingdom of Belgium :
H.E. ERIK DERYCKE
Minister of Foreign affairs

TRADUCTION
CONVENTION ENTER LE ROYAUME DE BELGIQUE ET LA REPUBLIQUE SOCIALISTE DU VIETNAM TENDANT A EVITER LES DOUBLES IMPOSITIONS ET A PREVENIR L'EVASION FISCALE EN MATIERE D'IMPOTS SUR LE REVENU ET SUR LA FORTUNE
THE GOVERNMENT OF THE BELGIUM ROYAUME
AND
THE GOVERNMENT OF THE SOCIALIST REPUBLIC OF VIETNAM,
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:
CHAPTER I. - Scope of the convention
Article 1^er
Target persons
This Convention applies to persons who are residents of a Contracting State or both Contracting States.
Article 2
Taxes
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 Vietnam:
(1) the income tax of natural persons (the individual income tax);
(2) profits tax (including income tax of foreign subcontractors in the petroleum field and income tax of foreign contractors) (the profits tax (included the foreign petroleum sub-contractor and the foreign contractor tax));
(3) tax on foreign profit transfers (the profit remittance tax);
(hereinafter referred to as "Vietnamese Tax");
(b) with regard to Belgium:
(1) the tax of natural persons;
(2) corporate tax;
(3) the tax of legal persons;
(4) non-resident tax;
(5) the special contribution assimilated to the tax of natural persons;
(6) the supplementary crisis contribution;
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").
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 communicate the significant changes to their respective tax laws.
CHAPTER II. - Definitions
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) (1) the term "Vietnam" means the Socialist Republic of Vietnam; Used in a geographical sense, it designates all of its national territory, including its territorial sea, as well as areas beyond its territorial sea on which, in accordance with international law, Vietnam has sovereign rights with regard to the exploration and exploitation of the natural resources of the soil and the basement of the sea and the underlying waters;
(2) the term "Belgium" means the Kingdom of Belgium; employed in a geographical sense, it designates the national territory, the territorial sea and the maritime zones on which, in accordance with international law, Belgium exercises sovereign rights or jurisdiction;
(b) the terms "a Contracting State" and "the other Contracting State" mean, according to the context, Vietnam or Belgium;
(c) the term "person" includes individuals, 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 an enterprise of a Contracting State, except where the ship or aircraft is operated only between points in the other Contracting State;
(g) the term "competent authority" means:
(1) with respect to Vietnam, the Minister of Finance or its authorized representative, and
(2) in respect of Belgium, the Minister of Finance or its authorized representative;
(h) The term "nationals" means:
(1) all natural persons who have the nationality of a Contracting State;
(2) all legal persons, corporations and associations incorporated in accordance with the legislation in force in a Contracting State.
2. For the purposes of the Convention by a Contracting State, any expression not defined therein shall have the meaning assigned to it by the law of that State concerning the taxes to which the Convention applies, unless the context requires a different interpretation.
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. 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. Where, according to the provisions of paragraph 1, a natural person is a resident of the two Contracting States, his or her situation shall be settled as follows:
(a) that person is considered to be a resident 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 in which that person has the centre of his or her 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 of the State in which it normally resides;
(c) if the person normally stays in both States or if he or she does not stay in any of them, he or she is considered to be a resident of the State of which he or she is a national;
(d) if that person has 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. Where, according to the provisions of paragraph 1, a person other than a natural person is a resident of the two Contracting States, it is considered to be a resident 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,
(f) a mine, oil or gas well, a career or any other place of extraction of natural resources, and
(g) a warehouse.
3. The term "stable establishment" also includes:
(a) a construction or assembly site or monitoring activities in the construction or construction site, but only when the construction or construction site or activities last more than six months;
(b) the provision of services, including the services of consultants, by a company acting through employees or other personnel engaged by the company for that purpose, but only when such activities continue (for the same project or related project) in the territory of the country for one or more periods representing a total of more than six months within any period of twelve months.
4. Notwithstanding the preceding provisions of this article, it is considered that there is no "stable establishment" if:
(a) the use of facilities for the sole purpose of storage or exposure of goods owned by the company;
(b) goods belonging to the enterprise are stored for storage or exposure purposes only;
(c) goods belonging to the enterprise are stored for the sole purpose of processing by another company;
(d) a fixed business facility is used for the sole purpose of purchasing goods or collecting information for the business;
(e) a fixed business facility is used for the sole purpose of carrying out any other preparatory or auxiliary activity for the enterprise;
(f) a fixed business facility shall be used for the purposes of the cumulative year of activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed business facility resulting from the cumulative operation shall be preparatory or auxiliary.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent enjoying an independent status to which paragraph 6 applies - acts in a Contracting State for an enterprise of the other Contracting State, that undertaking shall be deemed to have a permanent establishment in the first Contracting State for all activities carried out by that person, if that person:
(a) the State has the authority to enter into contracts on behalf of the undertaking, unless the activities of that person are limited to those listed in paragraph 4 and, if carried out in a fixed business facility, would not make the fixed business facility a permanent establishment within the meaning of that paragraph; or
(b) having no such power, usually keeps in the first State a stock of goods on which it regularly collects goods for the purpose of delivery on behalf of the company.
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.
CHAPTER III. - Income tax
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 shall apply 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 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 enterprise operates in such a manner, the profits of the enterprise shall be taxable in the other Contracting State but only to the extent that they are attributable:
(a) stable auditing;
(b) sales in that other State of goods of an identical or similar nature to those sold through that permanent establishment, or
(c) other commercial activities carried out in that other State that are identical or similar in nature to those carried out through 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 with the enterprise of which it constitutes a permanent establishment.
3. In order to determine the benefits of a permanent establishment, deductions are allowed for 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. However, no deduction is allowed for amounts that would, if any, be paid (other than the reimbursement of costs incurred) by the permanent establishment at the company's central office or at any of its offices, such as royalties, fees or other similar payments, for the use of patents or other fees, or as a commission, for specific services rendered or for a financial activity, or, unless Similarly, in the calculation of the profits of a permanent establishment, there shall be no account of the amounts (other than the reimbursement of costs incurred) carried by the permanent establishment at the rate of the central office of the enterprise or of any of its other offices, such as royalties, fees or similar payments, for the use of patents or other fees, or as a commission for specific services rendered or for any management activity or
4. No provision of this Article shall hinder the application of the legislation of a Contracting State relating to the determination of a person's tax debt where the information available to the competent authority of that State is insufficient to determine the profits attributable to a permanent establishment, provided that such legislation is applied, to the extent that the information available to the competent authority permits, in accordance with the principles set out in this Article.
5. 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 set out in this article.
6. No profit is charged to a permanent establishment because it simply purchased goods for the company.
7. For the purposes of the preceding paragraphs, the benefits to be charged to the permanent establishment are determined annually on the same basis, unless there are valid and sufficient grounds to proceed otherwise.
8. 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 and air navigation
1. The profits derived by an enterprise of a Contracting State from the operation, in international traffic, of ships or aircraft shall be taxable only in that State.
2. 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) an enterprise 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 on it 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 the dividends if the beneficial owner is a corporation that holds directly or indirectly at least 50 per cent of the capital of the corporation that pays the dividends;
(b) 10 per cent of the gross amount of dividends if the beneficial owner is a corporation that holds directly or indirectly at least 25 per cent but less than 50 per cent of the capital of the corporation that pays the dividends;
(c) 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 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 - subject to the same tax regime as income from shares by the domestic tax legislation of the State whose debiting society is a resident.
4. The provisions of paragraphs 1 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 company is a resident, 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 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 in respect of interest paid to the other Contracting State, a political subdivision or a local authority of that State, the National Bank of that State or any institution whose capital is wholly owned by that State or the political subdivisions or local authorities of that State.
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 article, penalties for late payment or interest treated as dividends under the first sentence of Article 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 an independent occupation by means of a fixed base located therein, and that the interest-generating debt is effectively linked 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 this case, the surplus portion of the payments shall remain taxable, in accordance with its legislation, in the Contracting State from which the interest arises.
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:
(a) 5 per cent of the gross amount of royalties when the royalties are paid for the use, or concession of the use, patent, drawing or model, plan, formula or secret process, or for information relating to an experience acquired in the industrial or scientific field;
(b) 10 per cent of the gross amount of royalties when they are paid for the use, or concession of use, of a trademark or trade mark or for information relating to an experience acquired in the commercial field; and
(c) 15 per cent of gross royalty in all other cases.
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 trade mark or 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 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.
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 this case, the surplus portion of the payments shall remain taxable, in accordance with its legislation, in the Contracting State from which royalties arise.
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. The gains that a business of a Contracting State derives from the alienation of ships or aircraft operated in international traffic, or of movable property assigned to the operation of such ships or aircraft, shall be taxable only in that State.
4. The gains derived by a resident of a Contracting State from the alienation of shares or similar rights in a corporation whose assets consist exclusively or principally of real property located in the other Contracting State may be taxed in that other State. For the purposes of this paragraph, the term "real property" does not include real property in which the business activity is carried out. This subsection does not apply where such gain is realized during the restructuring of companies, mergers, splits or similar transactions.
5. The gains that a natural person who is a resident of a Contracting State derives from the alienation of shares, other than those referred to in paragraph 4, of a corporation that is a resident of the other Contracting State may be taxed in that other State if that natural person, alone or with other natural persons who are not residents of the other Contracting State, holds directly or indirectly at least 25 per cent of the capital of the corporation at any time
6. Gains derived from the alienation of any property other than those referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the assignor is a resident.
Article 14
Independent Professions
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, the income shall be taxable in the other Contracting 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, the 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 twelve-month period 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, and
(c) the pay charge is not borne by a permanent establishment or a fixed basis that the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration received for an employee employed on board a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State.
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. The remuneration that a person referred to in paragraph 1 shall receive from the corporation because of the exercise of a day-to-day direction or technical activity as well as 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 accordance with the provisions of Article 15.
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. Notwithstanding the provisions of paragraph 1, pensions and other allowances, whether periodic or unpaid, 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 in that State.
Article 19
Public functions
1. (a) Compensation, 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 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 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 remuneration and pensions paid for services rendered in an industrial or commercial activity carried out by a Contracting State or one of its political subdivisions or local authorities.
4. Compensation paid by a Contracting State to a natural person for an activity carried out in the other Contracting State in the framework of assistance or cooperation agreements between the two Contracting States shall be taxable only in the first State.
Rule 20
Students
1. The sums that 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 resides in the first State for the sole purpose of pursuing his or her studies or training shall be paid to cover his or her maintenance, education or training expenses shall not be taxable in that State, provided that they arise from sources outside that State.
2. The remuneration that a student or an intern who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who stays in the first State solely for the purpose of pursuing his or her studies or training shall be paid in respect of an employee employment in that first State shall not be taxable in that State provided that such employee employment is exercised in connection with his or her studies or training during the normal sum of such remuneration and
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 shall not apply to income other than income derived from real property as defined in Article 6, paragraph 2, where the beneficiary of such income, a resident of a Contracting 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 therein shall, In this case, the provisions of Article 7 or Article 14, as applicable, shall apply.
CHAPTER IV. - Imposition of fortune
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. Assets made by ships and aircraft operated in international traffic by an enterprise of a Contracting State, or by movable property assigned to the operation of such ships or aircraft, shall be taxable only in that State.
4. All other assets of a resident of a Contracting State shall be taxable only in that State.
CHAPTER V. - Methods to eliminate double taxation
Article 23
1. With regard to Vietnam, double taxation is avoided as follows:
When a resident of Vietnam receives income or has assets that, in accordance with the provisions of this Convention, are taxable in Belgium, Vietnam grants:
(a) on the tax it receives on the income of that resident, a deduction of an amount equal to the income tax paid in Belgium;
(b) on his tax on the assets of that resident, a deduction of an amount equal to the tax on fortune paid in Belgium.
In both cases, however, this deduction may not exceed the portion of income tax or capital tax, calculated before deduction, corresponding in the case of taxable income or property in Belgium.
2. With regard to Belgium, double taxation is avoided as follows:
(a) When a Belgian resident receives income or owns property that is taxable in Vietnam in accordance with the provisions of the 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 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, take into account the income or assets exempted.
(b) Where a Belgian resident receives income elements that are included in his or her aggregate 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), in taxable interest in accordance with Article 11, paragraphs 2 or 7, or in taxable royalties in accordance with Article 12, paragraphs 2 or 6, Vietnamese tax collected on such income is charged on the said However, Belgium grants an imputation on its tax, in respect of interest and royalties derived from direct investment and included in the overall income of its residents subject to Belgian tax, where, under special measures of the domestic legislation of Vietnam intended to promote the economic development of Vietnam, Vietnamese tax can be levied on these income elements in accordance with the provisions of the Convention but that no Vietnamese tax is actually collected, or that the Vietnamese tax is actually levied. This imputation is calculated at a rate of 10 per cent but only applies for the first ten years from the Convention's taking of effect. The competent authorities of the Contracting States may consult with a view to deciding whether to extend this period. The term "interests and royalties derived from direct investment" refers to interest paid by borrowing, or royalties paid by contract, which are directly and permanently linked to industrial or commercial development projects in Vietnam.
(c) The dividends that a corporation that is a resident of Belgium receives from a corporation that is a resident of Vietnam and that are taxable in Vietnam in accordance with Article 10, paragraph 2, are exempted from corporate tax in Belgium, under the conditions and limits provided for in Belgian law. However, the dividends that a corporation that is a resident of Belgium receives from a corporation that is a resident of Vietnam and that are paid through profits that are temporarily exempted from the company's profit tax under special measures of Vietnam's domestic legislation intended to promote the economic development of Vietnam are also exempted from the corporate tax in Belgium for the first ten years from taking effect of the Convention. The competent authorities of the Contracting States may consult with a view to deciding whether to extend this period.
(d) Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in Vietnam have been 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 these profits have also been exempted from tax in Vietnam due to their compensation.
CHAPTER VI. - Special provisions
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 section 1^erpersons who are not residents of a Contracting State or both Contracting States.
2. 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 paragraph does not preclude that other State from receiving, on the profits attributable to a permanent establishment in that State of a business that is a resident of the first State, an additional tax not exceeding 10 per cent of the profits to the extent that they are transferred from the permanent establishment to the central headquarters. In addition, this subsection does not apply to the imposition of stable establishments in Vietnam of companies active in the fields of oil exploration or production or Vietnamese companies engaged in tax-based activities under the Agricultural Land Use Tax Act (Law on Agriculture Land Using Tax). 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.
3. Unless the provisions of Article 9, paragraph 1, Article 11, paragraph 7 or Article 12, paragraph 6, are applicable, 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, on the same terms 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.
4. 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.
5. The provisions of this Article shall apply only to taxes that are the subject of this Convention.
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 he is a resident or, if his case falls under Article 24, paragraph 1, to that of the Contracting State of which he or she is a national. 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.
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 for the benefit in the other State of 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. In no case shall the provisions of paragraph 1 be construed as imposing on a Contracting State the obligation:
(a) take administrative measures derogating from its legislation and 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 or national security.
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 by 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 that Contracting State, notify and recover the tax claims referred to in paragraph 1, which are payable 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 and 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 to 3 shall apply, mutatis mutandis, to these measures.
5. The provisions of Article 26, paragraph 1, 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 a diplomatic mission or consular post
The provisions of this Convention shall not affect the tax privileges enjoyed by members of a diplomatic mission or consular post under either the general rules of human rights or the provisions of special agreements.
CHAPTER VII. - Final provisions
Rule 29
Entry into force
1. Each Contracting State shall notify, in writing and through diplomatic channels, the other Contracting State of the fulfilment of the procedures required by its legislation for the entry into force of this Convention. The Convention shall enter into force on the date of receipt of the second notification.
2. The Convention will apply:
(a) Vietnam:
(1) in respect of taxes withheld from the source, to taxable amounts paid from 1^er January of the year immediately following the calendar year in which the Convention enters into force, and in subsequent calendar years;
(2) in respect of other Vietnamese taxes, income, profits or gains made in the calendar year immediately following the calendar year in which the Convention enters into force, and in subsequent calendar years;
(3) to property taxes established on assets existing at 1^er January of the calendar year immediately following that of the entry into force of the Convention, and in subsequent calendar years;
(b) in Belgium:
(1) tax payable 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;
(2) to other taxes on taxable periods beginning on or after 1^er January of the year immediately following that of the entry into force of the Convention;
(3) to property taxes established on assets existing at 1^er January of any year immediately after that of the entry into force of the Convention.
Rule 30
Denunciation
This Convention shall remain in force until it has been denounced by a Contracting State; but each of the Contracting States may, until 30 June inclusive of any calendar year from the fifth year following that of the entry into force, denounce it, in writing and through diplomatic channels, to the other Contracting State. In case of denunciation before 1^er July of such a year, the Convention will cease to apply:
(a) Vietnam:
(1) in respect of taxes withheld from the source, to taxable amounts paid from 1^er January of the year immediately following the calendar year in which the Convention is denounced, and in subsequent calendar years;
(2) in respect of other Vietnamese taxes, income, profits or gains made in the calendar year immediately following the calendar year in which the Convention is denounced, and in subsequent calendar years;
(3) to property taxes established on assets existing at 1^er January of the calendar year immediately following the denunciation, and in subsequent calendar years;
(b) in Belgium:
(1) tax payable to the source on income awarded or paid from 1^er January of the year immediately following the denunciation;
(2) other taxes on taxable period income beginning on or after December 31 of the same year;
(3) to property taxes established on assets existing at 1^er January of the same year.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Convention.
Made in Hanoi on 28 February 1996, in double copies in English.
For the Government of the Socialist Republic of Vietnam:
NGUYEN MANH CAM
For the Government of the Kingdom of Belgium:
E. DERYCKE
PROTOCOLE
At the time of the signing of the Convention between the Socialist Republic of Vietnam and the Kingdom of Belgium to avoid double taxation and to prevent tax evasion in respect of taxes on income and on capital, the undersigned have agreed on the following provisions which form an integral part of the Convention.
I. Ad Article 7:
1. With respect to Article 7, paragraph 1, the profits derived from the sale of goods of an identical or similar nature to those sold through a permanent establishment, or other commercial activities of an identical or similar nature to those carried out through a permanent establishment, may be considered to be attributable to that permanent establishment if it is proven that such an operation has taken place with a view to avoiding taxation in the establishment in the establishment
2. With respect to Article 7, paragraphs 1 and 2, in the case of contracts for the study, supply, installation or construction of industrial, commercial or scientific premises or public works, the profits attributable to a permanent establishment located in a Contracting State through which an enterprise of the other Contracting State carries out its activity shall be determined solely on the basis of the part of the contract which is effectively carried out by the Contracting State in which the contract is effectively implemented
II. Ad Article 10:
1. As long as the dividends that a corporation that is a resident of Belgium receives from a corporation that is a resident of Vietnam are exempted from corporate tax in Belgium under the provisions of Belgian legislation referred to in the first sentence of Article 23, paragraph 2, (c), the rate provided for in Article 10, paragraph 2, (b), is reduced to 7 per cent of the gross amount of the dividends.
2. The limitation under section 10, paragraph 2, applies, with respect to Vietnam, the tax on the transfer of profits abroad ("profit remittance tax").
III. Ad Article 12:
It is understood that the provisions of Articles 7 and 14 apply to services rendered by a resident of a Contracting State in the other Contracting State. Notwithstanding the preceding sentence, in the absence of a permanent or fixed base establishment, the amounts paid for technical services rendered by a resident of a Contracting State in the other Contracting State shall be deemed to be payments to which the provisions of Article 12, paragraph 2, (a), apply.
IV. Ad article 23:
It is understood that the second sentence of section 23, paragraph 2, (c), applies only if the dividends are paid through profits from actual industrial or commercial transactions carried out in Vietnam by the company paying the dividends.
V. Ad Article 24:
1. Notwithstanding the provisions of Article 24, paragraph 2, the rate referred to in this paragraph shall be reduced to 7 per cent of the profits transferred from the permanent establishment to the central seat as long as the profits transferred are exempted from tax in Belgium under Article 23, paragraph 2, (a), of the Convention.
2. As long as Vietnam continues, under the Foreign Investment Act in Vietnam ("Law on Foreign Investment in Vietnam"), to grant investors licenses stipulating the taxation to which the investor will be subject, such taxation is not considered an offence under section 24, paragraphs 2 and 3.
In faith, the undersigned duly authorized to do so by their respective Governments have signed this Protocol.
Made in Hanoi on 28 February 1996, in double copies in English.
For the Government of the Socialist Republic of Vietnam:
NGUYEN MANH CAM
Minister of Foreign Affairs
For the Government of the Kingdom of Belgium:
E. DERYCKE,
Minister of Foreign Affairs