Advanced Search

Law Approving The Convention Between The Government Of The Kingdom Of Belgium And The Government Of The Romania For The Avoidance Of Double Taxation And To Prevent Fiscal Evasion With Respect To Taxes On Income And On Capital, Made In Brussels

Original Language Title: Loi portant assentiment à la Convention entre le Gouvernement du Royaume de Belgique et le Gouvernement de la Roumanie tendant à éviter la double imposition et à prévenir l'évasion fiscale en matière d'impôts sur le revenu et sur la fortune, fait à Bruxel

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$40 per month.
belgiquelex.be - Carrefour Bank of Legislation

10 AOUT 1998. - An Act to assent to the Convention between the Government of the Kingdom of Belgium and the Government of Romania to avoid double taxation and to prevent tax evasion in respect of taxes on income and on property, done in Brussels on 4 March 1996 (1)



ALBERT II, King of the Belgians,
To all, present and to come, Hi.
The Chambers adopted and We sanction the following:
Article 1er. This Act regulates a matter covered by Article 77 of the Constitution.
Art. 2. The Convention between the Government of the Kingdom of Belgium and the Government of Romania to avoid double taxation and to prevent tax evasion in respect of taxes on income and on fortune, done in Brussels on 4 March 1996, will come out its full and complete effect.
Promulgate this law, order that it be clothed with the seal of the State and published by the Belgian Monitor.
Gives Châteauneuf-de-Grasse on 10 August 1998.
ALBERT
By the King:
Minister of Foreign Affairs,
E. DERYCKE
Minister of Economy, Head of Foreign Trade,
E. DI RUPO
Minister of Finance,
J.-J. VISEUR
Seal of the state seal:
Minister of Justice,
T. VAN PARYS
____
Note
(1) Parliamentary references:
Session 1997-1998.
Senate.
Documents. - Bill tabled on 27 May 1998, No. 1-996/1. - Report, n°1-996/2. - Text adopted in session and transmitted to the Chamber, No. 1-996/3.
Annales parliamentarians. - Discussion. Session of 8 July 1998. - Vote. Meeting of 9 July 1998.
House of Representatives.
Documents. - Project transmitted by the Senate, No. 1652/1.
Annales parliamentarians. - Discussion. Meeting of 16 July 1998. - Vote. Meeting of 16 July 1998.

Convention between the Government of the Kingdom of Belgium and the Government of Romania to avoid double taxation and to prevent tax evasion in respect of taxes on income and on fortune
The Government of the Kingdom of Belgium and the Government of Romania
Desirous of promoting and strengthening economic relations between the two countries through the conclusion of a Convention to avoid double taxation and to prevent tax evasion in respect of income and property taxes, have agreed on the following provisions:
Article 1er
Target persons
This Convention applies to persons who are residents of a Contracting State or both Contracting States.
Article 2
Taxes targeted
1. This Convention applies to taxes on income and on property collected on behalf of each of the Contracting States, their territorial administrative units or their local authorities, regardless of the system of perception.
2. All taxes levied on total income, total property or income or property, including taxes on gains from the alienation of movable or immovable property, as well as taxes on the surplus-values of such property, shall be considered as income and property taxes.
3. Current taxes to which the Convention applies include:
(a) with regard to Romania:
(i) the income tax of natural persons;
(ii) profit tax;
(iii) Salary tax and other similar remuneration;
(iv) non-resident income tax;
(v) dividend tax;
(vi) agricultural income tax;
(vii) tax on buildings and land occupied by buildings or other buildings,
(hereinafter referred to as "Romanian tax");
(b) with regard to Belgium:
(i) the tax of natural persons;
(ii) corporate tax;
(iii) corporation tax;
(iv) non-resident tax;
(v) the special contribution assimilated to the tax of natural persons;
(vi) the complementary contribution of crisis,
including pre-payments, additional cents to such taxes and pre-payments, and additional taxes to the tax of natural persons,
(hereinafter referred to as "Belgian tax").
4. The Convention will also apply to identical or similar taxes that would be established after the date of signing of the Convention and that would be added to or replace existing taxes. The competent authorities of the Contracting States shall communicate the significant changes to their respective tax laws.
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) the terms "a Contracting State" and "the other Contracting State" mean, according to the context, Romania or Belgium;
(b) the term "Romania" means the territory of Romania, including its territorial sea, as well as the exclusive economic zone and air spaces, on which Romania exercises its sovereignty, sovereign rights and jurisdiction under its own legislation and in accordance with international law;
(c) the term "Belgium" means the territory of the Kingdom of Belgium, including its territorial sea, as well as maritime zones and air spaces, on which the Kingdom of Belgium exercises sovereign rights or jurisdiction in accordance with international law;
(d) the term "person" includes natural persons, societies and all other groups of persons legally constituted in a Contracting State;
(e) the term "society" means any corporation or entity that is considered to be a corporation for taxation purposes;
(f) the terms "company of a Contracting State" and "company of the other Contracting State" mean respectively a company operated by a resident of a Contracting State and a company operated by a resident of the other Contracting State;
(g) the term "national" means:
(i) any natural person who has the citizenship of Romania or the nationality of Belgium, as appropriate;
(ii) any legal person, partnership or association incorporated in accordance with the legislation in force in a Contracting State;
(h) the term "international traffic" means any transport by a ship, aircraft, railway or road vehicle operated by a company whose effective steering seat is located in a Contracting State, except where such carriage is carried only between points in the other Contracting State;
(i) the term "competent authority" means, in each Contracting State, the Minister of Finance or its authorized representative.
2. For the application 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. When, according to the provisions of paragraph 1, a natural person is a resident of the two Contracting States, his or her situation is resolved 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 this person is a national of the two States, or if it is not a national of any of them, the competent authorities of the Contracting States shall decide the matter 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 the 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.
3. The term "stable establishment" also includes a construction or assembly site or monitoring or consultancy activity, but only when such work or activities last longer than nine months.
4. Notwithstanding the preceding provisions of this article, it is considered that there is no "stable establishment" if:
(a) the use of facilities for the sole purpose of storage, exposure or delivery of goods owned by the company;
(b) goods belonging to the undertaking are stored for storage, exposure or delivery purposes only;
(c) goods belonging to the enterprise are stored for the sole purpose of processing by another company;
(d) a fixed business facility is used for the sole purpose of purchasing goods or collecting information for the company;
(e) a fixed business facility is used for the sole purpose of carrying out any other preparatory or auxiliary activity for the enterprise;
(f) goods belonging to a company and exposed to a trade fair or exposure are sold by the company after the trade fair or exhibition;
(g) a fixed business facility shall be used for the purposes of the cumulative year of activities referred to in subparagraphs (a) to (f), provided that the overall activity of the fixed business facility resulting from this cumulative operation shall be preparatory or auxiliary.
5. Notwithstanding the provisions of paragraphs 1er and 2, where a person - other than an agent enjoying an independent status to which paragraph 6 applies - shall act on behalf of a business and shall, in a Contracting State, have powers that it normally exercises to enter into contracts on behalf of the enterprise, that undertaking shall be deemed to have a permanent establishment in that State for all activities that that the person exercises for the enterprise, unless the activities of that person are limited
6. A company is not considered to have a permanent establishment in a Contracting State solely because it operates in it through a broker, general commissioner or any other intermediary with an independent status, provided that such persons act within the ordinary framework of their activity.
7. The fact that a corporation that is a resident of a Contracting State controls or is controlled by a corporation that is a resident of the other Contracting State or that operates therein (either through a permanent establishment or not) is not sufficient in itself to make any of these companies a permanent establishment of the other.
Article 6
Real estate income
1. The income that a resident of a Contracting State derives from real property (including income from farms or forestry) located in the other Contracting State, is taxable in that other State.
2. The expression "real property" has the meaning assigned to it by the law of the Contracting State where the property considered is located. The term includes in any case the accessories of real property, the dead or alive livestock of farms and forestry, 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, aircraft, railway or road vehicles are not considered real property.
3. The provisions of paragraph 1er applies to revenues derived from direct exploitation, lease or charter, as well as any other form of exploitation of real property.
4. The provisions of paragraphs 1er 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 a company of a Contracting State shall be taxable only in that State, unless the company carries out its activity in the other Contracting State through a permanent establishment located therein. If the company operates in such a way, the profits of the company are taxable in the other State but only to the extent that they are attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise 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 is a permanent establishment.
3. In order to determine the profits of a permanent establishment, the expenses incurred for the purposes of this permanent establishment shall be deducted, including the executive expenses and general administrative expenses so incurred, either in the State where the permanent establishment is located or elsewhere.
4. If it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of a distribution of the total profits of the undertaking between its various parties, no provision in paragraph 2 shall preclude that Contracting State from determining the taxable profits according to the distribution in use; However, the method of distribution adopted must be such that the result obtained is consistent with the principles contained in this article.
5. No profit is charged to a permanent establishment because it simply purchased products or goods for the company.
6. For the purposes of the preceding paragraphs, the benefits to be charged to the permanent establishment are determined annually on the same basis, unless there are valid and sufficient grounds to proceed otherwise.
7. Where profits include income elements treated separately in other articles of this Convention, the provisions of these articles are not affected by the provisions of this article.
Article 8
Transport companies
1. The benefits derived from the operation, in international traffic, of ships, aircraft or railway or road vehicles shall be taxable only in the Contracting State where the effective management seat of the enterprise is located.
2. The provisions of paragraph 1er also apply:
(a) the occasional benefits derived from the naked hull rental of ships or aircraft operating in international traffic;
(b) benefits derived from the use or lease of containers, provided that these benefits are complementary or incidental to the profits referred to in the paragraph.
3. The profits derived from the operation of vessels serving inland navigation are taxable only in the Contracting State where the effective management seat of the company is located.
4. If the effective management seat of a marine or inland navigation company is on board a ship or ship, that seat is considered to be located in the Contracting State where the port of attachment of that ship or vessel is located, or if the vessel is not attached, in the Contracting State of which the operator of the ship or vessel is a resident.
5. The provisions of paragraphs 1er and 2 also apply to benefits derived from participation in a pool, a joint operation or an international operating organization.
Article 9
Associated companies
1. When:
a) a company of a Contracting State directly or indirectly participates in the direction, control or capital of a company of the other Contracting State, or
(b) the same persons directly or indirectly participate in the direction, control or capital of a company of a Contracting State and of a company of the other Contracting State, and that, in both cases, the two enterprises are, in their financial or commercial relations, bound by agreed or imposed conditions, that differ from those that would be agreed between independent companies, the profits that, without these conditions, could have been realized
2. When a Contracting State includes in the profits of a company of that State - and imposes accordingly - profits on which a company of the other Contracting State has been imposed in that other Contracting State, and that the profits thus included are profits that would have been realized by the enterprise of the first State if the conditions agreed between the two companies had been those that would have been agreed between independent companies, the other State proceeds to the adjustment that it considers appropriate. 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 are taxable in that other State.
2. However, such dividends may also be taxed in the Contracting State whose company paying the dividends is a resident and according to the law of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
(a) 5 per cent of the gross amount of dividends if the beneficial owner is a corporation that holds directly or indirectly at least 25 per cent of the capital of the corporation that pays the dividends;
(b) 15 per cent of the gross amount of dividends in all other cases.
This subsection does not affect the corporation's taxation of profits that are used to pay dividends.
3. The term "dividends" used in this article refers to income from shares, shares or benefits, shares of mine, share of founders 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 law of the State whose debiting society is a resident.
4. The provisions of paragraphs 1er 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, i.e., an industrial or commercial activity through a permanent establishment located therein, or an independent profession by means of a fixed base located therein, and that the dividend-generating interest is effectively connected to it. In this case, the provisions of Article 7 or Article 15, 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 shall 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 actually connected to a permanent establishment or to a fixed base located in that other State, or
Article 11
Interest
1. Interest from a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, these interests are also taxable in the Contracting State from 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 paid on the basis of loans or receivables granted or granted, guaranteed or insured by the other Contracting State, one of its territorial administrative units or local authorities or one of their institutions shall be exempted from tax in the Contracting State from which they arise.
4. The term "interests" 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, the term "interests" does not include, within the meaning of this section, penalties for late payment or interest treated as dividends under section 10, paragraph 3.
5. The provisions of paragraphs 1er, 2 and 3 shall not apply where the beneficial owner of the interest, a resident of a Contracting State, exercises in the other Contracting State from which the interests arise, either an industrial or commercial activity through a permanent establishment located therein, or an independent profession by means of a fixed base located therein, and that the interest-generating debt is effectively connected to it. In this case, the provisions of Article 7 or Article 15, as applicable, shall apply.
6. Interests are considered to arise from a Contracting State when the debtor is that State itself, a territorial administrative unit, 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 these interests, these are considered to be from the State where the permanent establishment, or the fixed base, is located.
7. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of interest, taking into account the debt for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State, taking into account the other provisions of this Convention.
Article 12
Claims
1. Royalties from a Contracting State and paid to a resident of the other Contracting State are taxable in that other State.
2. However, these royalties are also taxable in the Contracting State from 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 5 per cent of the gross amount of the royalties.
3. The term "debtedness" used in this article means the remuneration of any kind paid for the use or concession of the use of a copyright on a literary, artistic or scientific work, including film films and films and records for radio and television transmissions or any other form of transmission, a computer program, a patent, a trademark or a trade mark
4. The provisions of paragraphs 1er and 2 shall not apply where the beneficial owner of the royalties, a resident of a Contracting State, exercises in the other Contracting State from which the royalties arise, either an industrial or commercial activity through a permanent establishment located therein, or an independent profession by means of a fixed base located therein, and that the right or property that generates royalties is effectively connected to it. In this case, the provisions of Article 7 or Article 15, as applicable, shall apply.
5. Royalties are considered to be from a Contracting State when the debtor is that State itself, a territorial administrative unit, 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 these royalties, these are considered to be from the State where the permanent establishment or 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 paid, taking into account the benefit for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State, taking into account the other provisions of this Convention.
Article 13
Commissions
1. Commissions from a Contracting State and paid to a resident of the other Contracting State are taxable in that other State.
2. However, these commissions are also taxable in the Contracting State from which they arise and according to the law of that State, but if the beneficial owner of the commissions is a resident of the other Contracting State, the tax so charged cannot exceed 5 per cent of the gross amount of the commissions.
3. The term "commissions" used in this section refers to remuneration paid to any person for the services rendered as an intermediary; this term does not include revenues under sections 15 and 16.
4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of the commissions, a resident of a Contracting State, exercises in the other Contracting State from which the commissions originate, either an industrial or commercial activity through a permanent establishment located therein or an independent profession by means of a fixed base located therein, and the commissions are effectively connected to it. In this case, the provisions of Article 7, or Article 15, as applicable, shall apply.
5. The commissions are considered to be from a Contracting State when the debtor is that State itself, a territorial administrative unit, a local authority or a resident of that State. However, where the debtor of the commissions, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed base for which the obligation to pay the commissions has been contracted and which bears the burden of these commissions, they are considered to be from the State where the permanent establishment or fixed base is located.
6. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other maintain with third persons, the amount of the commissions, taking into account the services for which they are paid exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In such cases, the excess part of the commissions shall remain taxable in accordance with the laws of each Contracting State, taking into account the other provisions of this Convention.
7. When a resident of a Contracting State, who receives commissions from the other Contracting State, upon request for a specified year, the tax that may be collected on these commissions in the Contracting State from which they arise is calculated as if the resident had a permanent establishment in that State and as if the commissions were profits attributable to that permanent establishment.
Article 14
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 may be taxed 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 has in the other Contracting State for the exercise of an independent profession, including such gains from the alienation of that permanent establishment (
3. Gains derived from the alienation of ships, aircraft or railway or road vehicles operated in international traffic, vessels used for inland navigation, as well as movable goods assigned to the operation of these means of transport, are taxable only in the Contracting State where the effective management seat of the company is located.
4. Gains from the alienation of all property other than those referred to in paragraphs 1er, 2 and 3 are taxable only in the Contracting State of which the assignor is a resident.
Article 15
Independent occupations
1. The income derived by a resident of a Contracting State from a liberal profession or other activities of an independent character shall be taxable only in that State, unless that resident has in the other Contracting State of a fixed basis for the exercise of his or her activities. If it has such a fixed base, income may be taxed in the other State but only to the extent that it is attributable to that fixed base.
2. The term "professional liberal" includes independent scientific, literary, artistic, educational or educational activities, as well as independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Article 16
Dependent professions
1. Subject to the provisions of Articles 17, 19, 20 and 21, 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 for any period of twelve months, 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 base 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, aircraft or railway or road vehicle operated in international traffic, or on board a vessel used for inland navigation, may be taxed in the Contracting State where the effective management seat of the company is located.
Article 17
Elevenths and remuneration of corporate leaders
1. Les tantièmes, jetons de presence et autres rétributions similaires que un résidence d'un Etat Contractant recevoir en sa qualité de membre du Conseil d'administration ou de surveillance d'une société qui est un resident de l'autre Etat Contractant sonttaxs dans ce autre Etat.
2. The remuneration that a person referred to in paragraph 1 receives from the corporation as a result of the exercise of a day-to-day direction or technical activity and the remuneration that a resident of a Contracting State derives from his or her personal activity as a partner in a corporation that is not a corporation by shares and that is a resident of the other Contracting State, shall be taxed in accordance with the provisions of Article 16, as if it were
Article 18
Artists and athletes
1. Notwithstanding the provisions of Articles 15 and 16, 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 show, such as a theatre, cinema, radio or television artist or a musician, or as a sportsman, may be taxed in that other State.
2. When the income of activities that a performer or a sportsman exercises personally and in this capacity is attributed not to the artist or to the athlete himself but to another person, such income is taxable, notwithstanding the provisions of Articles 7, 15 and 16, in the Contracting State where the activities of the artist or athlete are carried out.
3. Notwithstanding the provisions of paragraphs 1er and 2, income derived from activities carried out as such by performing artists or sportsmen who are residents of a Contracting State shall be taxable only in that State, when the activities are carried out in the other Contracting State within the framework of a programme of cultural or sporting exchanges approved by the Governments of the two Contracting States.
Article 19
Pensions
1. Subject to the provisions of Article 20, paragraph 2, pensions and other similar remuneration, paid to a resident of a Contracting State for an earlier employment, shall be taxable only in that State.
2. However, 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 that Contracting State to supplement the benefits provided by that legislation, are taxable in that State.
Rule 20
Public functions
1. (a) Compensation, other than pensions, paid by a Contracting State, or any of its territorial or local administrative units to a natural person, for services rendered to that State or to that unit 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:
(i) is a national of that State, or
(ii) did not become a resident of that State for the sole purpose of rendering the services.
2. (a) Pensions paid by a Contractor State or one of its territorial or local administrative units, either directly or by debiting from funds they have constituted, to a natural person, for services rendered to that State or to that unit or community, shall be taxable only in that State.
(b) However, these pensions are taxable only in the other Contracting State if the natural person is a resident of that State and is a national.
3. The provisions of Articles 16, 17 and 19 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 territorial or local administrative units.
Article 21
Professors, researchers and students
1. Any remuneration of teachers or other members of the teaching staff as well as researchers, residents of a Contracting State, who are temporarily staying in the other Contracting State to teach or undertake scientific research in a university or other officially recognized educational institution, shall be taxable only in the first State for a period not exceeding two years from the date of arrival of such persons in the other State. This provision does not apply to compensation received for research if this work is undertaken primarily in the particular interest of one or more persons.
2. A student who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who temporarily stays in the first State for the sole purpose of continuing his or her studies or training in a university or other officially recognized educational institution of that first State, is exempted from tax in the first State:
(a) the sums it receives from sources outside of that State to cover its costs of maintenance, study or training;
(b) on remuneration received, for a maximum of two years, for an employee employed in that State in connection with its education or training, provided that such remuneration does not exceed, as the case may be, by calendar year, 120,000 Belgian francs or the equivalent of that sum in Romanian currency.
Article 22
Other income
1. The income of a resident of a Contracting State who is of a nature or origin from sources not mentioned in the preceding articles of this Convention and who are subject to tax in that State shall be taxable only in that State.
2. The provisions of paragraph 1er does not apply to income other than income 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 the property that actually generates income. In this case, the provisions of Article 7 or Article 15, as applicable, shall apply.
Article 23
Imposition of fortune
1. The property constituted by 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 fortune constituted by movable property that is part of the assets of a permanent establishment that a company of a Contracting State has in the other Contracting State, or by movable property that belong to a fixed base of which a resident of a Contracting State has in the other Contracting State for the exercise of an independent profession, is taxable in that other State.
3. The fortune constituted by ships, aircraft or railway or road vehicles operated in international traffic, by vessels used for inland navigation and by movable goods assigned to the operation of these means of transport, is taxable only in the Contracting State where the effective management seat of the company is located.
4. All other assets of a resident of a Contracting State shall be taxable only in that State.
Article 24
Methods to eliminate double taxation
1. In Romania, double taxation is avoided as follows:
(a) Where a resident of Romania receives income or has assets that, in accordance with the provisions of this Convention, are taxable in Belgium, Romania exempts from tax such income or assets, subject to the provisions of subparagraphs (b) and (c) below, but may, in order to calculate the amount of tax on the rest of the income or fortune of that resident, apply the same tax rates as if these incomes or assets were not exempted.
(b) When a resident of Romania receives income that, in accordance with the provisions of sections 10 to 13 is taxable in Belgium, Romania grants on the tax it receives on the income of that resident, a deduction of an amount equal to the tax paid in Belgium. However, this deduction cannot exceed the tax fraction, calculated before deduction, corresponding to those income received from Belgium.
(c) Notwithstanding the provisions of subparagraph (b), the dividends within the meaning of Article 10, paragraph 3, that a corporation that is a resident of Romania receives from a corporation that is a resident of Belgium are exempt from the profit tax in Romania, to the extent that this exemption would be granted if the two companies were residents of Romania.
2. In Belgium, double taxation is avoided as follows:
(a) When a Belgian resident receives non-taxable incomes under (b) and (c) below or has assets that are taxable in Romania in accordance with the provisions of the Convention, Belgium exempts tax from such income or assets, but it may, to calculate the amount of its taxes on the rest of the income or fortune of that resident, apply the same rate as if the income or assets in question had not been exempted.
(b) Subject to the provisions of Belgian law relating to the imputation on Belgian tax of taxes paid abroad, where a Belgian resident receives income elements that are included in his or her total income subject to Belgian tax and that consist of taxable dividends in accordance with Article 10, paragraph 2, and not exempted from Belgian tax under (c) below, in taxable interest in accordance with Article 11, paragraphs 2 or 7,
(c) Dividends within the meaning of Article 10, paragraph 3, that a corporation that is a resident of Belgium receives from a company that is a resident of Romania are exempted from the corporate tax in Belgium, under the conditions and limits provided for in Belgian law.
(d) Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in Romania have been effectively deducted from the profits of that undertaking for its taxation in Belgium, the exemption provided for in (a) above 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 Romania because of their losses
Rule 25
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 State are or may be subject, in the same situation, particularly in respect of the residence. This provision also applies, notwithstanding the provisions of Article 1, to persons who are not residents of a Contracting State or both Contracting States.
2. The imposition of a permanent establishment that a business of a Contracting State has in the other Contracting State is not established in that other State in a less favourable manner than the taxation of the enterprises of that other State that exercise the same activity. This provision may not be construed as requiring a Contracting State to grant residents of the other Contracting State the personal deductions, deductions and tax reductions based on the situation or family expenses that it grants to its own residents.
3. Unless the provisions of Article 9, paragraph 1er, article 11, paragraph 7 or article 12, paragraph 6, shall not be applicable, any interest, royalties and other expenses paid by a business of a Contracting State to a resident of the other Contracting State shall be deductible, for the determination of the taxable profits of that undertaking, under the same conditions as if they had been paid to a resident of the first Contracting State.
Similarly, the debts of a company of a Contracting State to a resident of the other Contracting State are deductible, for the determination of the taxable fortune of that undertaking, under the same conditions as if they had been contracted to a resident of the first State.
4. Companies 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 other similar enterprises of the first State are or may be subject.
5. Nothing in this article shall be construed as preventing a Contracting State:
(a) to impose at the rate provided for in its domestic legislation the benefits of a permanent establishment, located in that State, of a corporation that is a resident of the other Contracting State, provided that the above-mentioned rate does not exceed the maximum rate applicable to the profits of companies that are residents of the first Contracting State;
(b) to withdraw its deduction from the source on the dividends associated with an effective interest in a stable establishment in that State of which a corporation is a resident of the other Contracting State.
6. The provisions of this section shall apply, notwithstanding the provisions of section 2, to taxes of any kind or denomination.
Rule 26
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, irrespective 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 25, paragraph 1er, to that of the Contracting State of which it 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 claim appears to it to be justified and if it is not able to make a satisfactory solution to it, to resolve the case by friendly 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 measures necessary to implement the provisions of the Convention and in particular on the supporting documents to be provided by the residents of each Contracting State in order to benefit in the other State from the exemptions or tax reductions provided for in this Convention.
5. The competent authorities of the Contracting States may communicate directly with each other for the purposes of the Convention.
Rule 27
Exchange of information
1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention and those of the domestic legislation of the Contracting States relating to the taxes covered by the Convention to the extent that the taxation they provide is not contrary to the Convention.
The exchange of information is not restricted by section 1. 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 Contracting 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 covered by 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 interpreted as imposing on a Contracting State the obligation:
(a) to make administrative arrangements derogating from its own legislation or administrative practice or those of the other Contracting State;
(b) provide information that could not be obtained on the basis of its own 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, commercial or commercial secret or information that would be contrary to public order.
Rule 28
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, delayed interests, fees and fines without a criminal character relating to these taxes.
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 the Contracting State, ensure the notification and recovery of the tax claims referred to in paragraph 1er, which are due in the first State. These claims do not enjoy any privilege in the requested State and the requested State is not required to apply enforcement means that are not authorized by the legal or regulatory provisions of the requesting State.
3. The requests referred to in paragraph 2 shall be supported by an official copy of the enforceable titles, accompanied, if purchased, by an official copy of the administrative or judicial decisions passed in force of the evidence.
4. With regard 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 Contracting State; the provisions of paragraphs 1er to 3 are applicable, mutatis mutandis, to these measures.
5. The provisions of Article 27, paragraph 1er, shall also apply to any information pursuant to this Article, to the knowledge of the competent authority of a Contracting State.
Rule 29
Members of diplomatic missions and consular posts
The provisions of this Convention shall not affect the tax privileges enjoyed by members of diplomatic missions and consular posts under either the general rules of international law or the provisions of special agreements.
Rule 30
Entry into force
1. Each Contracting State shall notify the other Contracting State of the fulfilment of the procedures required by its legislation for the entry into force of this Convention. The latter shall enter into force on the thirtieth day after the date of the last notification.
2. The provisions of the Convention shall apply:
(a) in respect of taxes due to the source on income awarded or paid from 1er January of the year immediately following the year of entry into force of the Convention;
(b) in respect of other taxes on taxable period income beginning on or after 1er January of the year immediately following the year of entry into force of the Convention;
(c) in respect of capital taxes on assets existing as at 1er January of any year following the year of entry into force of the Convention.
3. The provisions of the Convention between the Government of the Kingdom of Belgium and the Government of the Socialist Republic of Romania to avoid double taxation in respect of taxes on income and property, signed in Bucharest on 14 October 1976, will cease to apply to any Romanian or Belgian tax to which this Convention applies in accordance with the provisions of paragraph 2.
Rule 31
Denunciation
1. This Convention will remain in force indefinitely.
2. However, each Contracting State may, until 30 June inclusive of any calendar year from the fifth year following that of the entry into force of the Convention, denounce it in writing and through diplomatic channels to the other Contracting State. In the event of such denunciation, the Convention shall cease to be applicable:
(a) in respect of taxes due to the source on income awarded or paid from 1er January of the year immediately following the year in which the denunciation was notified;
(b) in respect of other taxes on taxable period income starting from 1er January of the year immediately following the year in which the denunciation was notified;
(c) in respect of capital taxes on assets existing as at 1er January of the year immediately following the year in which the denunciation was notified.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Convention.
Done in Brussels on 4 March 1996, in duplicate, in French, Dutch and Romanian languages, the three texts being equally authentic. In the event of a discrepancy, the French language text will prevail.
For the Government of the Kingdom of Belgium:
Ph. MAYSTADT,
Minister of Finance and External Trade
For the Government of Romania:
D.I. POPESCU,
Minister of Commerce
In accordance with its atrticle 30, the Convention entered into force on 17 October 1998.