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Belgium Boosts International Tax Agreement Tally

Tuesday, July 9, 2013

The Belgian Council of Ministers has approved for ratification the protocol amending the bilateral double taxation agreement (DTA) between Belgium and Japan in the area of taxes on income. The Council of Ministers has also waved through for ratification multiple tax information exchange agreements (TIEAs).

Signed in Brussels on January 26, 2010, the protocol updates the initial DTA with Japan signed on March 28, 1968, ensuring that the accord conforms to the internationally accepted standard. The modification facilitates the exchange of banking information between the two countries, thereby strengthening bilateral cooperation.

The protocol is due to be submitted to the Federal parliament shortly, before being presented to the regional and community parliaments for approval. The text of the protocol has been published on the Tax Administration's website.

During the same meeting, The Council of Ministers also gave its seal of approval to TIEAs with Grenada, Montserrat, Anguilla, and Gibraltar. According to the Belgian Government, the TIEAs provide for the exchange of fiscal information upon request, including banking information. This is a key aspect of international cooperation in the area of taxation and an efficient manner in which to protect the national tax base and to combat harmful tax practices, the Government stresses.

The treaties are largely based on the Organization for Economic Cooperation and Development's (OECD) Model TIEA. The conclusion of the accords is to be seen within the context of Belgian Government efforts to conclude, with as many states and jurisdictions as possible, tax information exchange agreements covering banking information, complying with the OECD standard.

The agreements with Grenada, Montserrat, and Gibraltar cover four types of taxes on income in Belgium, including individual income tax, corporation tax, the tax on legal entities, and non-resident income tax. Furthermore, the texts cover value-added tax (VAT). They provide for the exchange (on request) of information likely to be pertinent for the application of domestic legislation relating to the taxes covered by the accord.

Furthermore, the treaties provides for the exchange of information held notably by banks and other financial establishments. In the case of the accord with Gibraltar, the TIEA also covers taxes collected on behalf of the federal entities and provides for the exchange of information held by trusts, foundations, partnerships, and other collective investment organizations.

The texts define the terms and conditions for a valid request, and set out the conditions and specific directives for the carrying out of cross-border tax audits on the territory of the treaty partner state.

Finally, the TIEAs contain strict confidentiality rules, and provide for a procedure to amicably resolve disputes or doubts surrounding the interpretation or application of the agreement.

The TIEA between Belgium and Anguilla covers individual income tax, corporate tax, the tax on legal entities and on non-residents, VAT, inheritance and death transfer taxes, as well as registration duties on inter vivo gifts.