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HMRC internal manual

Double Taxation Relief Manual

Guidance by country: Belgium: Treaty summary

The table summarises the provisions of the treaty in force. Where a percentage rate is shown, this rate is the ‘treaty rate’ and does not reflect taxes chargeable under the domestic law of either state before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which the UK and Belgium are permitted to tax income in the relevant categories under the treaty. Rates chargeable under the domestic law of either state may be higher or lower.

In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details.

 

Portfolio dividends 10% (note 1) Article 10
     
Dividends on direct investments 0% (notes 2 and 3) Article 10
Conditions for lower rate on dividends on direct investments The beneficial owner must be a company which holds directly at least 10% of the capital of the payer for an uninterrupted period of at least 12 months Article 10
Property income dividends 15% Article 10
Interest 10% (note 4, 5 and 6) Article 11
Royalties 0% Article 12
Government pensions Taxable only in Belgium unless the individual is a resident of, and a national of, the UK Article 19
Other pensions/annuities Taxable only in Belgium (note 7) Article 18
Arbitration Yes Article 25

 

 

 

Note 1: Dividends beneficially owned by a UK pension scheme are not taxable in Belgium.

Note 2: Under the EU Parent/Subsidiary Directive, dividends paid to a company resident in the United Kingdom that holds at least 10 per cent of the capital of the Belgian company paying the dividend are exempt from tax in Belgium.

Note 3: Until 1 January 2013, the rate was 5% if the beneficial owner was a company controlling directly or indirectly 25 per cent of the voting power of the Belgian company.

Note 4: Until 1 January 2013, the rate was 15%.

Note 5: The EC Directive on Interest and Royalties (2003/49EC) (see INTM400010 to 400110) provides for the abolition of source state taxation on interest and royalty payments made between associated companies in different Member States.

Note 6: The following types of interest are exempt from tax in the paying state:

  • Interest paid on any loan granted or credit extended from one enterprise to another enterprise;
  • Interest paid to a pension scheme established in the United Kingdom;
  • Interest paid to the United Kingdom Government, a political subdivision thereof, a local authority or any public entity;

Note 7: The 2009 Protocol changes the treatment of pensions from 1 January 2013 (Article 18 of the agreement). The changes only apply to new pensions. Pensions first credited or paid to a UK resident on or after 1 January 2013 are taxable solely by Belgium and need not be returned for UK tax purposes.

Where a UK resident was receiving a pension from Belgium before 1 January 2013 the pension will continue to be taxable solely in the UK. There is no option to be able to opt for the pension to be taxed in Belgium.