belgiquelex.be - Carrefour Bank of Legislation 28 FEBRUARY 1993. An Act to approve the Convention between the Government of the Kingdom of Belgium and the Government of the Federal Republic of Nigeria to avoid double taxation and to prevent tax evasion in respect of taxes on income and capital gains, signed in Brussels on 20 November 1989 (1)
The Chambers adopted and We sanction the following:
Single article. The Convention between the Government of the Kingdom of Belgium and the Government of the Federal Republic of Nigeria to avoid double taxation and to prevent tax evasion on income taxes and capital gains, signed in Brussels on 20 November 1989, will come out its full and full effect.
Promulgate this law, order that it be clothed with the seal of the State and published by the Belgian Monitor.
Given in Motril on 28 February 1993.
BAUDOUIN
By the King:
Minister of Foreign Affairs,
W. CLAES
Minister of Finance,
Ph. MAYSTADT
Minister of Foreign Trade,
R. URBAIN
Seal of the state seal:
Minister of Justice,
Mr. WATHELET
Agreement between the Government of the Kingdom of Belgium and the Government of the Federal Republic of Nigeria for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains
The Government of the Kingdom of Belgium and
The Government of the Federal Republic of Nigeria
Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains,
Have agreed as follows:
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. The taxes to which this Agreement shall apply are :
(a) In Nigeria:
(i) the personal income tax;
(ii) the companies income tax;
(iii) the petroleum profits tax; and
(iv) the capital gains tax (hereinafter referred to as "Nigerian tax").
(b) In Belgium:
(i) the individual income tax (tax of natural persons C personenbelasting);
(ii) the corporate income tax (tax by C vennootschapsbelasting companies);
(iii) the income tax on legal entities (tax of legal persons C rechtspersonenbelasting);
(iv) the income tax on non-residents (tax of non-residents C belasting der niet-verblijfhouders);
(v) the special levy assimilated to the individual income tax (specialization assimilated to the tax of natural persons C met de personenbelasting gelijkgestelde bijzondere heffing),
including the prepayments, the surcharges on these taxes and prepayments, and the supplements to the individual income tax; (hereinafter referred to as "Belgian tax").
2. This Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws.
3. This Agreement shall not apply, in the case of Belgium, to the corporate income tax to the extent that such tax is payable, in accordance with Belgian law, by a company which is a resident of Belgium in the event of the repurchase by that company of its own shares or in the event of the distribution of its assets.
Article 3
General definitions
1. In this Agreement, unless the context otherwise requires:
(a) the term "Nigeria" means the Federal Republic of Nigeria including any area outside the territorial waters of the Federal Republic of Nigeria which in accordance with international law has been or may hereafter be designated, under the laws of the Federal Republic of Nigeria concerning the continental shelf, as an area within which the rights of the Federal Republic of Nigeria with respect to the sea bed and subsoil and their natural resources may be exercised;
(b) the term "Belgium" means the Kingdom of Belgium; when used in a geographical sense, it means the national territory and any area beyond the territorial sea of Belgium within which under Belgian law and in accordance with international law Belgium exercises sovereign rights or its jurisdiction;
(c) the term "national" means:
(i) in relation to Nigeria, any citizen of Nigeria and any legal person, partnership, association or other entity deriving its status as such from the law in force in Nigeria;
(ii) in relation to Belgium, any individual possessing the Belgian nationality and any legal person, partnership or association deriving its status as such from the laws in force in Belgium;
(d) the terms "a Contracting State" and "the other Contracting State" mean Nigeria or Belgium as the context requires;
(e) the term "person" means an individual, a company or any other body of persons;
(f) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes under the respective laws of each Contracting State;
(g) 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;
(h) 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 solely between places in the other Contracting State;
(i) the term "competent authority" means:
(i) in the case of Nigeria, the Minister of Finance or his authorised representative;
(ii) in the case of Belgium, the Minister of Finance or his authorised representative.
2. As regards the application of this Agreement by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State concerning the taxes to which this 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 incorporation or any other criterion of a similar nature.
2. Where by reason of the provisions of paragraph 1 of this Article, an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:
(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 of this Article a person other than an individual is a resident of both Contracting States, then the competent authorities shall endeavour to resolve the case by mutual agreement, due regard being had to its place of effective management or incorporation or to any other relevant criterion.
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;
(g) a building site or construction or assembly project which exists for more than three months;
(h) the provision of supervisory activities for more than three months on a building site or construction or assembly project;
(i) the installation, or the provision of supervisory activities in connection with such installation, incidental to the sale of machinery or equipment where the charge payable for such installation exceeds 10 per cent of the sale price of the machinery or equipment free-on-board.
3. Notwithstanding the preceding provisions of this Article, the term
shall not be deemed to include:
(a) the use of facilities solely for the purpose of storage, display or delivery 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, display or delivery;
(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.
4. The term "permanent establishment" shall include a fixed place of business used as a sales outlet notwithstanding the fact that such fixed place of business is otherwise maintained solely for any of the activities mentioned in paragraph 3 of this Article.
5. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.
6. A person (other than an agent of an independent status to whom the provisions of paragraph 5 of this Article apply) who acts in a Contracting State on behalf of an enterprise of the other Contracting State shall be deemed to be a permanent establishment of that enterprise in the first-mentioned Contracting State if:
(a) he has, and habitually exercises in that State, an authority to conclude contracts or carries on any business activities on behalf of the enterprise, unless his activities are limited to those mentioned in paragraph 3 of this Article; gold
(b) he habitually secures orders for the sale of goods or merchandise in the first-mentioned State exclusively or almost exclusively on behalf of the enterprise or other enterprises controlled by it or which have a controlling interest in it.
Article 6
Income from immovable property
1. Income from immovable property including income from agriculture or forestry may be taxed in the Contracting State in which such property is situated.
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, live-stock and equipment used in agriculture and forestry, rights to which the provisions of the 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 right to work, mineral deposits, sources and other natural resources. Ships and aircraft shall not be regarded as immovable property.
3. The provisions of paragraph 1 of this Article 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 of this Article shall also apply to 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 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 of this Article, 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 shown to have been 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 by way of interest on moneys lent to the permanent establishment. 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 by way of interest on moneys lent to the head
For the purpose of this paragraph, interest payable to a banking enterprise by its permanent establishment or vice versa shall be allowed as a deduction to the extent that it represents a reimbursement of actual expenses.
4. 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. Provided that where that permanent establishment is also used as a sales outlet for the goods or merchandise so purchased, the profits on such sales may be attributed to that permanent establishment.
5. 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. A resident of a Contracting State shall be exempt from tax in the other Contracting State in respect of profits or gains derived from the operation of ships or aircraft in international traffic.
2. However, no exemption shall be granted if such operation in international traffic is carried on by a resident of only one of the Contracting States. In such a case, the tax charged shall not exceed 1 per cent of the earnings of the resident derived from the other Contracting State.
For the purpose of this paragraph, the term " earnings" means income home freight, mails and sale of tickets and other such income less refunds and payments of wages and salaries of ground staff.
3. Notwithstanding the provisions of paragraph 2 of this Article, the provisions of paragraph 1 of this Article shall also apply to profits derived from the participation in a pool, a joint business or an international operating agency in which residents of both Contracting States take part.
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 this Agreement and the competent authorities of the Contracting States shall if necessary consult each other.
Article 10
Dividends
1. Dividends derived from a company which is a resident of a Contracting State by 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) 12.5 per cent of the gross amount of the dividends if the recipient is a company which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividends;
(b) 15 per cent of the gross amount of the dividends in all other cases.
This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
3. The provisions of paragraph 1 or 2 of this Article shall not apply where the beneficial owner of the dividends, being a resident of a Contracting State, has in the other Contracting State a permanent establishment or performs in that other State independent personal services from a fixed base situated therein and the holding by virtue of which the dividends are paid is effectively connected with the business carried on through such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
4. 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 to a resident of the first-mentioned State except insofar as 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 the company's undistributed profits to a tax arising on untributed profits
5. The provisions of this Article shall not apply if the right giving rise to the dividends was created or assigned mainly for the purpose of taking advantage of this Article and not for bona fide commercial reasons.
6. The term "dividends" as used in this Article means income from shares, or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the company taxation law of the State of which the company making the distribution is a resident, and also any other item (other than interest relieved from tax under the provisions of Article 11 of this Agreement) which, under the law of In the case of Belgium the term also means income which is taxable under the head of income on capital invested by the members of a company other than a company with share capital, which is a resident of Belgium.
Article 11
Interest
1. Interest derived from a Contracting State by 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 12.5 per cent of the gross amount of the interest.
3. The provisions of paragraphs 1 and 2 of this Article 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 personal 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 a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
4. Interest shall be deemed to arise in a Contracting State where 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 that 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.
5. Where owing to a special relationship between the pay and the beneficial owner or between both of them and some other person, the amount of the interest exceeds, for whatever reason, the amount which would have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
6. The provisions of this Article shall not apply if the right or property giving rise to the interest was created or assigned mainly for the purpose of taking advantage of this Article and not for bona fide commercial reasons.
7. 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" does not include for the purpose of this Article income dealt with in paragraph 6 of Article 10.
Article 12
Royalties
1. Royalties derived from a Contracting State by 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 from which they are derived 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 12.5 per cent of the gross amount of the royalties.
3. The provisions of paragraphs 1 and 2 of this Article shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, has in the other Contracting State in which the royalties arise 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 royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
4. Royalties shall be deemed to be derived in a Contracting State where 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, such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.
5. Where, owing to 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 that case, the excess part of the payment shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
6. The provisions of this Article shall not apply if the right or property giving rise to the royalties was created or assigned mainly for the purpose of taking advantage of this Article and not for bona fide commercial reasons.
7. In this Article the term means payments of any kind received as 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 used for radio and television broadcasting, any patent, trade mark, design, 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.
Article 13
Capital gains
1. Gains derived in a Contracting State by a resident of the other Contracting State from the sale or alienation of movable and immovable property including shares in companies may be taxed in each of the Contracting States in accordance with the laws of the respective States.
2. 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 in international traffic, shall be taxable only in that State.
Article 14
Independent personal services
1. Income derived by a resident of a Contracting 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 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, 20 and 21, 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 of this Article, 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 the year of assessment or in the taxable period, as the case may be, 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 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
Directors' fees
1. Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.
2. However, any other remuneration which a person to whom paragraph 1 applies derives from the company in respect of the discharge of day-to-day functions of a managerial or technical nature may be taxed in accordance with the provisions of Article 15.
Article 17
Artists and athletes
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 an athlete, 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 an athlete in his capacity as such increaseds not to the entertainer or athlete 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 athlete are exercised.
Article 18
Pensions and annuities
1. Pensions and other similar remuneration paid in consideration of past employment to a resident of a Contracting State and any annuity paid to such a resident shall be taxable only in the State from which such income is derived.
2. The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money's worth.
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 rendered in that State and the individual is a resident of that State who:
(i) is a national of that State; gold
(ii) did not become a resident of that State solely for the purpose of rendering the services.
2. The provisions of Articles 15 and 16 shall apply to remuneration in respect of an employment in connection with any business carried on by a Contracting State, or a political sub-division or a local authority thereof for the purpose of profits.
Rule 20
Students and trainees
1. A student or business apprentice who, immediately before visiting a Contracting State, is or was a resident
of the other Contracting State and who is temporarily present in the first-mentioned Contracting State primarily
for the purpose of his education or training shall be exempt from tax in that first-mentioned Contracting State
gold
(a) payments made to him by persons residing outside that first-mentioned Contracting State for the purpose of his maintenance, education or training; and
(b) remuneration from employment in that first-mentioned Contracting State, provided that the remunération constitutes earnings reasonably necessary for his maintenance and education.
2. An individual who, immediately before visiting a Contracting State, is or was a resident of the other Contracting State and who is temporarily present in the first-mentioned State primarily for the purpose of study, research or training as a recipient of a grant, allowance or award from a scientific, educational, religious or charitable organization or under a technical assistance programme entered into by the Government of a Contracting State shall, from the date of his arrival in the first-mentioned State in connection with that visit, be exempt from tax in that State.
Article 21
Teachers
1. A professor or teacher who visits one of the Contracting States for the purpose of teaching or engaging in research at a University or any other similarly recognised educational institution in that State and who, immediately before that visit, was a resident of the other Contracting State shall be exempted from tax by the first-mentioned State in respect of any remuneration received for such teaching or research for a paiod not exceeding two years from the date of his first arrival in that State for such purpose.
2. This Article shall apply to income from research only if such research is undertaken by the professor or teacher in the public interest and not primarily for the benefit of some other private person or persons.
Article 22
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 shall be taxable only in that State.
2. Notwithstanding the provisions of paragraph 1 of this Article, items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Agreement and arising in the other Contracting State may also be taxed in that other State.
Article 23
Elimination of double taxation
1. Subject to the provisions of the law of Nigeria regarding the allowance as a credit against Nigerian tax of tax payable in a territory outside Nigeria (Which shall not affect the general principle thereof):
(a) Belgian tax payable under the laws of Belgium and in accordance with this Agreement, whether directly or by deduction, on profits, income or chargeable gains from sources within Belgium (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any Nigerian tax computed by reference to the same profits, income or chargeable gains by reference to which Belgian tax is computed.
(b) In the case of a dividend paid by a company which is a resident of Belgium to a company which is a resident of Nigeria and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account tin addition to any Belgian tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Belgian tax payable by the company in respect of the profits out of which such dividend is paid. In any case, the amount of tax credit to be granted under this sub-paragraph shall not exceed the proportion of Nigerian tax which such profits, income or chargeable gains bear to the entire profits, income or chargeable earnings chargeable to Nigerian tax.
2. In the case of Belgium, double taxation shall be avoided as follows:
(a) Where a resident of Belgium derives income not dealt with in sub-paragraph (b) or (c) below which may be taxed in Nigeria in accordance with the provisions of this Agreement, other than those of paragraph 2 of Article 10, of paragraphs 2 and 5 of Article 11 and of paragraphs 2 and 5 of Article 12, Belgium shall exempt such income from tax but may, in calculating the amount of tax on the remaining income of that resident, apply the rate of tax income would
(b) Where a resident of Belgium derives from Nigeria items of his aggregate income for Belgian tax purposes which are:
- taxable dividends in accordance with paragraph 2 of Article 10 and not exempt from Belgian tax under sub-paragraph (c) below,
- interest taxable in accordance with paragraph 2 or 5 of Article 11, and
- royalties taxable in accordance with paragraph 2 or 5 of Article 12,
the fixed proportion of the foreign tax for which provision is made under Belgian law shall, under the conditions and at the rate provided for by such law, be allowed as a credit against Belgian tax relating to such income.
Notwithstanding the provisions of its law, Belgium shall also allow the credit provided for in this sub-paragraph in respect of tax which may be charged in Nigeria on dividends, interest and royalties by virtue of this Agreement and the law of Nigeria, but which is temporarily remitted or reduced under special provisions designed to promote the economic development of Nigeria.
(c) Where a company which is a resident of Belgium owns shares or other rights in a company with share capital which is a resident of Nigeria and which is subject to Nigerian tax on its profits, the dividends which are paid to it by the latter company and which may be taxed in Nigeria in accordance with paragraph 2 of Article 10, shall be exempt from the corporate income tax in Belgium to the extent that exemption would have been accorded if the two companies had been residents of Belgium.
(d) Where, in accordance with Belgian law, losses of an enterprise carried on by a resident of Belgium which are attributable to a permanent establishment situated in Nigeria 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 Nigeria by reason of compensation for the said losses.
Article 24
Non-discrimination
1. Notwithstanding the provisions of Article 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 are or may be subjected.
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.
3. 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 firstmentioned State are or may be subjected.
4. Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and deductions for tax purposes, which are granted to individuals as resident.
5. Nothing in this Article shall be construed as preventing a Contracting State :
(a) from taxing the total amount of the profits attributable to a permanent establishment in that State of a company being a resident of the other Contracting State or of an association having its place of effective management in that other State at the rate of tax provided by the law of the first-mentioned State, but this rate may not exceed the maximum rate applicable to the profits of companies which are residents of that first-mentioned State;
(b) from imposing its withholding tax on dividends derived from a holding which is effectively connected with a permanent establishment or a fixed base maintained in that State by a company which is a resident of the other Contracting State or by an association which has its place of effective management in that other State and is taxable as a body corporate in the first-mentioned State.
6. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description.
Rule 25
Mutual agreement procedure
1. Where a resident or a national of a Contracting State 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 whithin 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 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 may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.
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 but 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.
Rule 27
Diplomatic and consular officials
1. Nothing in this Agreement shall affect the fiscal privileges of diplomatic and consular officials under the general rules of international law or under the provisions of special agreements.
2. Notwithstanding paragraph 1 of Article 4, an individual who is a member of the diplomatic, consular or permanent mission of a Contracting State which is situated in the other Contracting State and who is liable to tax in that other State only if he derives income from sources therein, shall be deemed to be a resident of the sending State.
Rule 28
Entry into force
1. The Governments of the Contracting States shall notify each other that the constitutional requirements for the entry into force of this Agreement have been complied with.
2. The Agreement shall enter into force thirty days after the date of the latter of the notification referred v
to in paragraph 1 and its provisions shall have effect :
(a) in Nigeria:
(i) in respect of withholding tax on income and taxes on capital gains derived by a non-resident, in relation to income and capital gains derived on or after 1st January in the calendar year immediately following that in which the Agreement enters into force;
(ii) in respect of other taxes, in relation to income of any basis period beginning on or after 1st January in the calendar year immediately following that in which the Agreement enters into force;
(b) in Belgium:
(i) in respect of taxes due at source on income credited or payable on or after 1st January in the calendar year immediately following that in which the Agreement enters into force;
(ii) in respect of taxes other than taxes due at source, on income of any taxable period beginning on or after 1st January in the calendar year immediately following that in which the Agreement enters into force.
Rule 29
Termination
This Agreement shall continue in force until terminated. Either of the Contracting States may through diplomatic channels give written notice of termination at least six months before the end of any calendar year, and in that event, this Agreement shall cease to be effective :
( a ) in Nigeria:
(i) in respect of withholding tax on income and taxes on capital gains derived by a non-resident, in relation to income and capital gains derived on or after 1st January in the calendar year immediately following that in which the notice of termination is given;
(ii) in respect of other taxes, in relation to income of any basis period beginning on or after 1st January in the calendar year immediately following that in which the notice of termination is given;
( b ) in Belgium :
(i) in respect of taxes due at source on income credited or payable on or after 1st January in the calendar year immediately following that in which the notice of termination is given;
(ii) in respect of taxes other than taxes due at source, on income of any taxable period beginning on or after 1st January in the calendar year immediately following that in which the notice of termination is given.
In witness whereof, the undersigned, duly authorised thereto, have signed this Agreement.
Done in duplicate at Brussels, this.twentieth. day of November 1989 in the English language.
For the Government of the Kingdom of Belgium :
Mr. EYSKENS
For the Government of the Federal Republic of Nigeria:
J. IROHA
TRADUCTION
Convention between the Government of the Kingdom of Belgium and the Government of the Federal Republic of Nigeria to avoid double taxation and to prevent tax evasion in respect of income taxes and capital gains
The Government of the Kingdom of Belgium and
the Government of the Federal Republic of Nigeria
wishing to conclude a Convention to avoid double taxation and to prevent tax evasion in respect of income taxes and capital gains,
The following provisions were agreed:
Article 1
Target persons
This Convention applies to persons who are residents of a Contracting State or both Contracting States.
Article 2
Taxes targeted
1. The taxes to which this Convention applies are:
(a) In Nigeria:
(i) personal income tax (the personal income tax);
(ii) corporate income tax (the companies income tax);
(iii) petroleum profits tax (the petroleum profits tax), and
(iv) capital gains tax (the tax capital gains), (hereinafter referred to as "the Nigerian tax").
(b) In Belgium:
(i) the tax of natural persons;
(ii) corporate tax;
(iii) corporation tax;
(iv) non-resident tax;
(v) the special contribution assimilated to the tax of natural persons, including the pre-payments, the additional decimals and centimes to the said taxes and pre-payments and the additional taxes to the tax of natural persons (hereinafter referred to as "the Belgian tax").
2. The Convention also applies to taxes of an identical or similar nature that would be established by one of the Contracting States after the date of signature of the Convention and which would be in addition to or replace the existing taxes. The competent authorities of the Contracting States shall communicate the significant changes to their respective tax laws.
3. The Convention does not apply, with respect to Belgium, to the tax of the companies to the extent that this tax is due, in accordance with Belgian law, by a corporation that is a resident of Belgium in the event of the acquisition by that company of its own shares or shares or on the occasion of the sharing of its social assets.
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) the term "Nigeria" means the Federal Republic of Nigeria, including any region outside the territorial waters of the Federal Republic of Nigeria, which, in accordance with international law, has been or may be subsequently designated under the legislation of the Federal Republic of Nigeria concerning the continental shelf, as a region within which the rights of the Federal Republic of Nigeria relating to the seabed and the subsoil and their natural resources may be exercised;
(b) the term "Belgium" means the Kingdom of Belgium; where it is employed in a geographical sense, it designates the national territory and any region beyond the territorial sea of Belgium within which Belgium exercises, under its legislation and in accordance with international law, sovereign rights or jurisdiction;
(c) the term "national" means:
(i) in respect of Nigeria, any citizen of Nigeria and any legal person, partnership, association or other entity incorporated in accordance with the legislation in force in Nigeria;
(ii) in respect of Belgium, any natural person who has Belgian nationality and any legal person, partnership or association incorporated in accordance with the legislation in force in Belgium;
(d) the terms "a Contracting State" and "the other Contracting State" mean, according to the context, Nigeria or Belgium;
(e) the term "person" means a natural person, a society and any other grouping of persons;
(f) the term "society" means any legal person or entity that is considered to be a legal entity for taxation purposes in accordance with the respective laws of each Contracting State;
(g) 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;
(h) 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;
(i) the term "competent authority" means:
(i) in respect of Nigeria, the Minister of Finance or its authorized representative;
(ii) in respect of Belgium, the Minister of Finance or its authorized representative.
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 place of incorporation or any other criterion of a similar nature.
2. Where, according to the provisions of paragraph ler of this article, a natural person is a resident of the two Contracting States, his or her situation shall be settled in accordance with the following rules:
(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. When, according to the provisions of paragraph 1er of this Article, a person other than a natural person is a resident of the two Contracting States, the competent authorities shall endeavour to determine the matter of mutual agreement, taking into account his or her effective management seat or place of incorporation or any other relevant criteria.
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.
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 quarry or any other place of extraction of natural resources;
(g) a construction or construction site with a duration exceeding three months;
(h) the exercise of monitoring activities for a period of more than three months on a construction or assembly site;
(i) the installation, or the exercise of surveillance activities in relation to such a facility, as a result of the sale of machinery or equipment, where the costs to be paid for this facility exceed 10 per cent of the sale price of Franco-Owned Machines or Equipment on board.
3. 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 owned by the company 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 business;
(e) a fixed business facility is used for the sole purpose of carrying out any other preparatory or auxiliary activity for the enterprise.
4. The term "stable establishment" includes a fixed business facility used as a point of sale, notwithstanding that this fixed business facility is maintained only for the exercise of activities referred to in paragraph 3 of this section.
5. A business of a Contracting State is not considered to have a permanent establishment in the other Contracting State solely because it operates in the other Contracting State through a broker, general commissioner or any other agent enjoying an independent status, when such persons act within the ordinary framework of their activity.
6. A person (other than an agent enjoying an independent status to which the provisions of paragraph 5 of this article apply) acting in a Contracting State on behalf of a business of the other Contracting State shall be deemed to constitute a permanent establishment of that undertaking in the first Contracting State if:
(a) it has powers in that State that it normally exercises it to enter into contracts or to carry out activities on behalf of the enterprise, unless its activities are limited to those mentioned in paragraph 3 of this Article; or
(b) it usually executes orders in the first State for the sale of goods, exclusively or almost exclusively on behalf of the company or other enterprises controlled by it or that control it.
Article 6
Real estate income
1. Revenues from real property, including income from farms or forestry, are taxable in the Contracting State where these properties are located.
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 and aircraft are not considered real property.
3. The provisions of paragraph 1er of this section shall apply to income derived from the exploitation or direct enjoyment, lease or charter, as well as any other form of exploitation of real property.
4. The provisions of paragraphs 1er and 3 of this section shall also apply to income derived from the real property of a business as well as to income from the 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 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:
(a) stable auditing;
(b) the sale, in that other State, of goods of the same nature as those sold by the permanent establishment, or of a similar nature; or
(c) other commercial activities carried out in that other State and of the same nature as those carried out by a permanent establishment, or of a similar nature.
2. Subject to the provisions of paragraph 3 of this Article, 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 benefits that it could have realized if it had constituted a separate and separate undertaking carrying out identical or similar activities under identical or similar conditions and dealing independently with the undertaking
3. In order to determine the profits of a permanent establishment, the expenses shown to have been exposed for the purposes of the permanent establishment, including the executive expenses and general administrative expenses so exposed, are deducted, 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 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 a management activity or as a loan Similarly, in the calculation of the profits of a permanent establishment, there is no account of the amounts (other than the reimbursement of costs incurred 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 board for specific services rendered or for any management activity,
For the purposes of this paragraph, interest paid to a bank company by the permanent establishment of the bank or vice versa shall be deducted as they represent a refund of costs incurred.
4. No profit is charged to a permanent establishment because it simply purchased goods for the company. However, when this stable establishment is also used as a point of sale of the goods so purchased, the profits resulting from these sales are attributed to this stable establishment.
5. 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. A resident of a Contracting State is exempted from tax in the other Contracting State in respect of profits or gains from the operation of ships or aircraft in international traffic.
2. However, no exemption is granted if such exploitation in international traffic is provided by a resident of one of the Contracting States. In this case, the tax must not exceed 1 per cent of the income derived by the resident from the other Contracting State.
For the purposes of this paragraph, the term "recipes" refers to income derived from the carriage of goods and mail and the sale of tickets, as well as any other similar income, under deduction of dividends and salary payments and salaries to land-based personnel.
3. Notwithstanding the provisions of paragraph 2 of this Article, the provisions of paragraph ler of this Article shall also apply to profits derived from participation in a pool, joint operation or international operating organization to which residents of the two Contracting States are parties.
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 of a business of the other Contracting State, and that, in both cases, the two enterprises are, in their commercial or financial relations, bound by agreed or imposed conditions that differ from those that would be agreed between independent enterprises, the profits that, without these conditions, could have been realized by the
2. When a Contracting State includes in the profits of a company of that State - and therefore imposes - 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 from a resident of a Contracting State by a resident of the other Contracting State may be taxed in that other State.
2. However, these dividends are also taxable in the Contracting State whose company paying dividends is a resident, and according to the legislation of that State; but if the beneficial owner of the dividend is a resident of the other Contracting State, the tax so charged shall not exceed:
(a) 12.5 per cent of the gross amount of dividends if the beneficiary is a corporation that directly or indirectly controls at least 10 per cent of the voting rights in 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 provisions of paragraphs 1er and 2 of this Article shall not apply where the beneficial owner of the dividends, resident of a Contracting State, has in the other Contracting State a permanent establishment or exercises in that other State an independent profession by means of a fixed base located there, and that the dividend-generating participation is effectively linked to the activity carried out through this permanent establishment or fixed base. In this case, the provisions of Article 7 or Article 14, as applicable, shall apply.
4. 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 to a resident of the first Contracting State, except to the extent that the dividend-generating interest is effectively connected to a permanent establishment or a fixed base located in that other State, or collect any tax, in respect of the taxation of the unpaid profits
5. The provisions of this Article shall not apply where the right to generate dividends has been created or transferred principally to take advantage of this Article and not for sincere commercial reasons.
6. The term "dividends" used in this article means income from shares or other beneficial shares, with the exception of receivables, as well as income from other social shares subject to the same tax regime as income from shares by tax legislation as income from shares by the tax legislation of the State whose distribution society is a resident, as well as any other income (other than interest benefiting from a tax reduction In the case of Belgium, this term also refers to taxable income for capital income invested by partners of a corporation other than a share corporation that is a resident of Belgium.
Article 11
Interest
1. Interest derived from a Contracting State by 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 12.5 per cent of the gross amount of the interest.
3. The provisions of paragraphs ler and 2 of this Article shall not apply where the beneficial owner of the interests, a resident of a Contracting State, exercises in the other Contracting State in which the interests 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 interest-generating debt is effectively connected with it. In this case, the provisions of Article 7 or Article 14, as applicable, shall apply.
4. 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 he is 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 interest, such interest shall be deemed to arise from the State where the permanent establishment or fixed base is located.
5. Where, as a result 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 exceeds, for any reason, the amount that would have been agreed in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.
6. The provisions of this Article shall not apply where the right or property generating interest has been created or transferred principally to take advantage of this Article and not for sincere commercial reasons.
7. 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 bonds of borrowing, including premiums and lots attached to these securities. However, the term "interest" does not include, for the purposes of this section, the revenues referred to in Article 10, paragraph 6.
Article 12
Claims
1. Royalties drawn from a Contracting State by 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 12.5 per cent of the gross amount of the royalties.
3. The provisions of paragraphs 1st and 2 of this Article shall not apply where the beneficial owner of the royalties, a resident of a Contracting State, has in the other Contracting State in which the royalties of a permanent establishment arise or exercises an independent profession therein by means of a fixed base located therein and that the right or property generating royalties is effectively connected to that permanent establishment or to that fixed base. In this case, the provisions of Article 7 or Article 14, as applicable, shall apply.
4. The royalties shall be deemed to arise 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 obligation to pay the royalties has been contracted and which bears the charge of these royalties, these shall be deemed to arise from the Contracting State where the permanent establishment, or the fixed base, is located.
5. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of royalties, taking into account the benefit for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.
6. The provisions of this section shall not apply where the royalty law or property has been created or transferred principally to take advantage of this section and not for sincere commercial reasons.
7. For the purposes of this article, the term "debtedness" 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 or bands used for radio or television broadcasts, a patent, a trademark or a trade, a drawing, a model,
Article 13
Capital gains
1. The gains in a Contracting State by a resident of the other Contracting State of the sale or alienation of movable and immovable property, including the shares of corporations, shall be taxable in each of the Contracting States in accordance with their respective laws.
2. Gains derived by an enterprise of a Contracting State, the alienation of ships or aircraft operated in international traffic or of movable property assigned to the operation of such ships or aircraft in international traffic shall be taxable only in that State.
Article 14
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 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 15
Dependent professions
1. Subject to the provisions of Articles 16, 18, 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 ler of this article, remuneration to be paid by 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 the taxation year or during the tax period, as appropriate, 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 or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State.
Article 16
Elevenths
1. The fortieth, presence tokens and similar remuneration that a resident of a Contracting State receives as a member of the board of directors or supervision of a corporation that is a resident of the other Contracting State may be taxed in that other State.
2. However, any other remuneration that a person referred to in subsection ler receives from the corporation as a result of the day-to-day exercise of direction or technical character is taxable in accordance with the provisions of section 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 carried out 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 is 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 and rents
1. Pensions and other similar remuneration paid to a resident of a Contracting State for an earlier job as well as annuities paid to such a resident shall be taxable only in the State in which such income arises.
2. The term "rent" means a specified amount payable periodically at fixed maturity, during life or for a specified or determinable period, under a commitment to make payments in exchange for a full and adequate money countervalue or its equivalent.
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:
(i) has the nationality of that State; or
(ii) did not become a resident of that State for the sole purpose of rendering the services.
2. The provisions of Articles 15 and 16 shall apply to remuneration paid in respect of an employee employed in an industrial or commercial activity carried out for profit by a Contracting State or any of its political subdivisions or local authorities.
Rule 20
Students and trainees
1. A student or apprentice who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who temporarily resides in the first Contracting State for the sole purpose of pursuing his or her studies or training, is exempted from tax in that first Contracting State because:
(a) payments made for the benefit of the person who resides outside the first State to cover the costs of maintenance, education or training;
(b) compensation received in respect of an employee employed in that first State, provided that such remuneration is reasonably necessary to cover its maintenance and education costs.
2. A natural person who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who is temporarily residing in the first State principally to pursue studies, research or training as a beneficiary of a scholarship, allowance or prize received from an institution of a scientific, educational, religious or philanthropic character or within the framework of a programme of technical assistance set out on the ground
Article 21
Professors
1. A teacher or teacher who resides in a Contracting State for the purpose of teaching or conducting research at a university or other similar educational institution recognized in that State and who, immediately before such a stay, was a resident of the other Contracting State, is exempted from tax by the first State for a period not exceeding two years from the date of its first arrival in that State for such purposes.
2. This section applies to income from research only if this work is undertaken by the professor or teacher in the public interest and not primarily for the benefit of one or more specific persons.
Article 22
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 shall be taxable only in that State.
2. Notwithstanding the provisions of paragraph 1er of this article, the income of a resident of a Contracting State who is not treated in the preceding articles of this Convention and who come from the other Contracting State shall also be taxable in that other State.
Article 23
Prevention of double taxation
1. Subject to the provisions of Nigeria's legislation concerning the imputation of taxes paid in a territory outside Nigeria (which does not affect the general principle of the following):
(a) The Belgian tax due, directly or by way of deduction, under Belgian law and in accordance with this Convention, by reason of profits, income or taxable earnings having their source in Belgium (excluding, in the case of dividends, tax due on profits that are used for the payment of dividends) is deducted from any Nigerian tax calculated on the same profits, income or taxable gains on which the Belgian tax is calculated.
(b) With respect to dividends paid by a corporation that is a resident of Belgium to a corporation that is a resident of Nigeria and that directly or indirectly controls at least 10 per cent of the voting rights in the corporation that pays the dividends, the deduction takes into account (other than any Belgian tax for which the deduction is granted under the provisions of paragraph (a) of the Belgian tax due by the corporation for the benefit of the payment.
In no case shall the amount of the tax deduction to be granted under this paragraph exceed the portion of the Nigerian tax that such taxable profits, income or gains shall be proportionate to the total taxable profits, revenues or gains subject to Nigerian tax.
2. With regard to Belgium, double taxation is avoided as follows:
(a) Where a Belgian resident receives income not referred to in subparagraphs (b) or (c) below and that is taxable in Nigeria in accordance with the provisions of this Convention, except those of Article 10, paragraph 2, of Article 11, paragraphs 2 and 5, and of Article 12, paragraphs 2 and 5, Belgium exempts tax such income but may, to calculate the amount of the tax due on the rest of the income, if not
(b) When a Belgian resident derives from Nigeria income elements that are included in his overall income subject to Belgian tax and that are:
- taxable dividends in accordance with Article 10, paragraph 2, and not exempted from Belgian tax under paragraph (c) below,
- taxable interest in accordance with Article 11, paragraphs 2 or 5, and
- taxable royalties in accordance with section 12, paragraphs 2 or 5,
the lump-sum foreign tax quotity provided for in Belgian legislation is charged, under the conditions and at the rate provided for in this legislation, with the Belgian tax for such income.
By derogation from the provisions of its legislation, Belgium also grants the deduction provided for in this paragraph of the Chief of Taxes due to Nigeria on dividends, interest and royalties under this Convention and the legislation of Nigeria, but which is temporarily granted surrender or moderation under special provisions to promote the economic development of Nigeria.
(c) Where a corporation that is a resident of Belgium has the ownership of shares or other rights of a corporation by shares that is a resident of Nigeria and is subject to the Nigerian tax on its profits, the dividends that are paid to it by that corporation and that are taxable in Nigeria in accordance with Article 10, paragraph 2, are exempted in Belgium from the tax of the companies to the extent that the exemption would be granted if the two companies were residents.
(d) Where, in accordance with Belgian law, losses incurred by a company operated by a resident of Belgium in a permanent establishment located in Nigeria have been effectively deducted from the profits of that undertaking for its taxation in Belgium, the exemption provided for in paragraph (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 Nigeria as a result
Article 24
Non-discrimination
1. Notwithstanding the provisions of Article 1erthe 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 the nationals of that other State are or may be subject to the same situation.
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.
3. 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 related obligations which is other or heavier than those to which the other similar enterprises of the first State are or may be subject.
4. Nothing in this article shall be construed as requiring any of the Contracting States to grant personal deductions, deductions and tax reductions to natural persons who are residents of that State.
5. Nothing in this article shall be construed as preventing a Contracting State:
(a) to impose the total amount of profits attributable to a permanent establishment in that State owned by a corporation that is a resident of the other Contracting State or an association having its effective headquarters in that other State, at the rate provided for in the legislation of the first State, but that rate may not exceed the maximum rate applicable to the profits of the companies that are resident ts of that first State.
(b) to withdraw its deduction from the source on the dividends associated with an interest that is effectively connected to a permanent establishment or a fixed base in that State of which a corporation is a resident of the other Contracting State or an association having its effective management seat in that other State and which is taxable as a legal person in the first State.
6. The provisions of this section shall apply, notwithstanding the provisions of section 2, to taxes of any kind or denomination.
Rule 25
Friendly procedure
1. Where a resident or national of a Contracting State considers that the measures taken by a Contracting State or by the two Contracting States shall impair or impair for it an imposition not in accordance with the provisions of this Convention, it may, irrespective of the remedies provided by the domestic law of those States, submit its case to the competent authority of the Contracting State of which it is a resident or, if its case falls under Article 24, paragraph 1erto 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 founded and if it is not itself in a position to provide a satisfactory solution, 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 may communicate directly with each other in order to reach an agreement as indicated in the preceding paragraphs.
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 ler. 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 be communicated only 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 proceedings 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, but they may report this information in public court hearings or in judgments.
2. The provisions of paragraph 1 shall in no case be construed as imposing on a Contracting State the obligation:
(a) take administrative measures derogating from its legislation, 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.
Rule 27
Diplomatic and consular officials
1. The provisions of this Convention shall not affect the tax privileges enjoyed by diplomatic and consular officials under either the general rules of the law of people or the provisions of special agreements.
2. Notwithstanding the provisions of Article 4, paragraph 1era natural person who is a member of a diplomatic mission, a consular post or a permanent delegation of a Contracting State located in the other Contracting State and who is subject to tax in that other State only if it collects income from sources located there, is considered to be a resident of the sending State.
Rule 28
Entry into force
1. The Governments of the Contracting States shall notify each other of the fulfilment of the procedures required for the implementation of this Convention.
2. The Convention shall enter into force thirty days after the date of the last notification referred to in paragraph 1 and its provisions shall apply:
(a) Nigeria:
(i) taxes due at source on income and taxes on capital gains collected by a non-resident in respect of income and capital gains collected from 1er January of the calendar year immediately following that in which the Convention enters into force;
(ii) other income taxes for any tax period beginning on or after 1er January of the calendar year immediately following that in which the Convention enters into force;
(b) in Belgium:
(i) taxes due to the source on the income awarded or paid from 1er January of the calendar year immediately following that in which the Convention enters into force;
(ii) taxes other than taxes due to the source, relating to the income of any tax period beginning on or after 1 January of the calendar year immediately following that in which the Convention enters into force.
Rule 29
Denunciation
This Convention shall remain in force until it has been denounced Each Contracting State may denounce the Convention in writing and through diplomatic channels with a minimum notice of six months before the end of any calendar year, and in that case the Convention shall cease to be applicable:
(a) Nigeria:
(i) taxes due at source on income and taxes on capital gains collected by a non-resident, with respect to income and capital gains collected from 1er January of the calendar year immediately following that in which the denunciation is notified;
(ii) other taxes relating to the income of any taxable period beginning on or after January 1 of the calendar year immediately following that in which the denunciation is notified.
(b) in Belgium:
(i) the tax due to the source on the income awarded or paid on or paid on or after January 1 of the calendar year immediately following that in which the denunciation is notified;
(ii) taxes other than taxes due to the source, relating to the income of any taxable period beginning on or after January 1 of the calendar year immediately following that in which the denunciation is notified.
In faith, the undersigned, duly authorized to do so, have signed this Convention.
Done in duplicate in Brussels on 20 November 1989 in the English language.
For the Government of the Kingdom of Belgium:
Mr. EYSKENS
For the Government of the Federal Republic of Nigeria:
J. IROHA
Pursuant to Article 28, this Convention entered into force on 27 October 1994.
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