Decree of the Minister for Foreign Affairs No. 24 / 1978 Coll.
Decree of the Minister for Foreign Affairs on the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Belgium on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes
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Effective from 17.12.1977
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24
DECLARATION
Minister for Foreign Affairs
of 31 January 1978
on the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Belgium on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes
On 19 June 1975, the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Belgium on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes was signed in Prague.
The Treaty was approved by the Federal Assembly of the Czechoslovak Socialist Republic and ratified by the President of the Republic. The instruments of ratification were exchanged in Brussels on 2 December 1977.
Pursuant to Article 29 of the Treaty, the Treaty entered into force on 17 December 1977.
The Czech translation of the text of the Treaty is announced simultaneously.
Minister:
Ing. Chupek v. r.
TREATY
between the Czechoslovak Socialist Republic and the Kingdom of Belgium to avoid double taxation and prevent tax evasion in the field of income and property taxes
The President of the Czechoslovak Socialist Republic and His Majesty the Belgian King, wishing to rule out double taxation and prevent tax evasion in the field of income and property taxes, have agreed to conclude a contract and have appointed for that purpose their agents:
President of the Czechoslovak Socialist Republic:
His Excellency the Lord
Ing. Bohuslav CHNUOPKA
Minister for Foreign Affairs
the Czechoslovak Socialist Republic,
His Majesty the King of Belgium:
His Excellency R. VAN ELSLAND,
Minister for Foreign Affairs and Cooperation
the development of the Kingdom of Belgium,
who, having exchanged their powers of attorney which have been found to be correct and appropriate, have agreed on the following provisions:
CHAPTER I
SCOPE OF THE TREATY
Persons covered by the contract
This Treaty shall apply to persons residing or having their registered office in one or both Contracting States.
Taxes covered by the contract
1. This Treaty shall apply to income and property taxes collected for the benefit of each Contracting State, its lower administrative departments and its territorial corporations, whatever the method of collection.
2. Taxes levied on total income, on all or part of the income or assets, including taxes on profits arising from the disposal of movable or immovable property, on wages, on paid enterprises, and on value gains shall be treated as income and property taxes.
3. The current taxes covered by the contract are in particular:
A. As regards Belgium:
(a) the tax on natural persons;
(b) company tax,
(c) corporate tax;
(d) foreign tax;
including advances, surpluses, levies and advances and municipal surpluses levied on natural persons
(hereinafter referred to as the Belgian tax).
B. As regards Czechoslovakia:
(a) profit contribution;
(b) profit tax;
(c) payroll tax;
(d) income tax on literary and artistic activities;
(e) agricultural tax;
(f) public income tax;
(g) domestic tax,
(h) capital contributions;
(i) tax on the volume of wages;
including any deduction for the source, any advance payment or advance payment relating to the taxes referred to above
(hereinafter referred to as "Czechoslovak tax ').
4. The provisions of this Treaty governing the taxation of profits of undertakings shall apply by analogy to the Czechoslovak payroll tax.
5. The contract will also cover future taxes of an identical or similar nature, which will be attached to or replaced by current taxes. The competent authorities of the Contracting States shall notify each other of changes to be made to their respective tax laws.
CHAPTER II
DEFINITIONS
General definitions
1. Within the meaning of this Treaty, where the link does not require a different interpretation:
(a) - The term "Belgium" refers to the Kingdom of Belgium; used in the geographical sense also refers to zones situated outside Belgian territorial waters where Belgium may exercise, in accordance with international law, rights relating to the seabed, subsoil situated below the seabed and their natural resources.
- The term "Czechoslovakia" refers to the Czechoslovak Socialist Republic.
(b) The terms "one Contracting State" and "the other Contracting State" refer to the context of Belgium or Czechoslovakia.
(c) The term "person" includes natural persons, companies, public corporations and all other associations of persons.
(d) The term "company" shall refer to any legal person or any substance which, as such, is subject to taxation on its income or on its property in the State in which it has its registered office.
(e) The terms "undertaking of one Contracting State" and "undertaking of the other Contracting State" shall refer to an undertaking operated by a person resident or established in one Contracting State or, where appropriate, an undertaking operated by a person residing or having its registered office in the other Contracting State.
(f) The term "members" means:
- all natural persons who are nationals of a Contracting State;
- all legal persons, personal companies and associations established under the laws of a Contracting State.
(g) "International transport" means any transport carried out by a ship or aircraft operated by an undertaking the head office of which is situated in a Contracting State where the ship or aircraft is not used between places located in the other Contracting State.
(h) The term "competent authority" shall indicate:
- in the case of Belgium, the Minister for Finance or his authorised representative, and
- in the case of Czechoslovakia, the Minister of Finance of the Czechoslovak Socialist Republic or his authorised representative.
2. Any term which is not otherwise defined shall have a meaning for the application of this Treaty by the Contracting State which is addressed to it by the legislation of that State governing taxes which are the subject of this Treaty, unless the link requires a different interpretation.
Tax domicile
1. The term "resident or domiciled in a Contracting State 'shall, within the meaning of this Treaty, mean any person whose income or property is subject to tax in that State by reason of his residence, permanent residence, place of business or any other criterion of a similar nature.
2. Where, pursuant to paragraph 1, a natural person resides in both Contracting States, the case shall be decided in accordance with the following rules:
(a) It is assumed that that person is resident in the Contracting State in which he has a permanent residence. If it has a permanent residence in both Contracting States, it is assumed to reside in the Contracting State with which its personal and economic ties are the narrowest (centre of life interests).
(b) If the Contracting State in which that person has a centre of his life interests cannot be designated or if he does not have a permanent residence in any Contracting State, he shall be presumed to reside in the Contracting State in which he normally resides.
(c) Where the person normally resides in both Contracting States or if he is not normally present in any of them, he shall be presumed to reside in the Contracting State of which he is a national citizen.
(d) Where that person is a national of both Contracting States or is not a national of any of them, the competent authorities of the Contracting States shall decide the matter by common accord.
3. Where a person other than a natural person has its registered office in both Contracting States in accordance with paragraph 1, it shall be presumed to have its registered office in the Contracting State in which its effective management is situated.
Permanent establishment
1. The term "permanent establishment" means, within the meaning of this Treaty, a permanent establishment for the business in which the undertaking carries out its activities in whole or in part.
2. the term "permanent establishment" includes in particular:
(a) the head office of the management;
(b) the race;
(c) an office;
(d) the factory,
(e) workshop,
(f) mine, quarry, or any other place where natural resources are extracted;
(g) construction sites or installations lasting more than 24 months.
3. The following shall not be considered a permanent establishment:
(a) equipment used only for the storage, display or supply of goods belonging to the holding;
(b) goods belonging to an undertaking which is stored only as a stock for the purpose of exhibition or delivery;
(c) goods belonging to an undertaking which is stored only for processing by another undertaking;
(d) permanent establishment serving business which is used only for the purpose of purchasing goods or collecting information for the undertaking;
(e) permanent establishment for business which is used for the purposes of advertising, information, scientific research or similar activities of a preparatory or auxiliary nature.
4. A person acting in one Contracting State for the account of an undertaking of the other Contracting State - other than a representative having an independent status as referred to in paragraph 5 - shall be regarded as a permanent establishment of an undertaking in the first State if it is equipped in that State with the full power normally exercised there and which allows it to conclude contracts on behalf of an undertaking, unless the activity of that person is limited to buying goods for an undertaking.
5. In the other Contracting State, the mere fact that the undertaking carries out its business there through a broker, a general agent or any other intermediary having an independent position shall not be regarded as a permanent establishment of an undertaking of one Contracting State where such persons act in the proper framework of their activities.
6. The fact that a company which has its registered office in one Contracting State controls or is controlled by a company which has its registered office in the other Contracting State or which carries out its activities there (whether through a permanent establishment or not) is not sufficient in itself to make that company a permanent establishment of the other company.
CHAPTER III
REVENUE
Revenue from real estate
1. Revenue accruing from immovable property, including income from agriculture or forestry, shall be subject to taxation in the Contracting State in which the property is located.
2. the term "immovable property" is defined in accordance with the law of the Contracting State in which the immovable property is situated. The term covers, in any case, accessories, dead and living inventory of agricultural and forestry holdings, rights covered by the provisions of civil law on land ownership, the consumption of immovable property and the right to variable or fixed supply for mining or the admission to mining of mineral deposits, springs and other land wealth. Ships, boats and aircraft shall not be considered property.
3. The provisions of paragraph 1 shall apply to revenue arising from direct management or use, hire or hire, as well as any other form of exploitation of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to income arising from the undertaking's immovable property and to income from immovable property serving the exercise of the profession.
Profits of enterprises
1. The profits of an undertaking of one Contracting State shall be subject to taxation only in that State if the undertaking does not carry out its activities in the other Contracting State through a permanent establishment situated there. Where an undertaking carries out its activities in this way, the profits of the undertaking shall be subject to taxation in the other State, but only to the extent that they can be attributed to that permanent establishment.
2. Where an undertaking of a Contracting State carries out its activities in the other Contracting State through a permanent establishment situated there, it shall be attributed, subject to the provisions of paragraph 3 in each Contracting State of that State, to profits which it could achieve if, as a separate undertaking, it performed identical or similar activities under the same or similar conditions and traded completely independently of the undertaking of which it is a permanent establishment.
3. In calculating the profits of a permanent establishment, it shall be permitted to deduct the costs incurred for the objectives pursued by that permanent establishment, including management expenses and general administrative expenses thus incurred, whether in the State in which that permanent establishment is located or elsewhere.
4. Where, in a Contracting State, it is customary to determine the profits to be added to a permanent establishment on the basis of the distribution of the company's total profits by its various parts, no provision in paragraph 2 shall prevent that Contracting State from determining the profits to be taxed by dividing it as normal; However, the method of division adopted shall be such that the result is consistent with the principles set out in this Article.
5. A permanent establishment shall not make any profits on the basis that it only purchased goods for the undertaking.
(6) For the purposes of the preceding paragraphs, the profits to be attributed to a permanent establishment shall be calculated each year on the basis of the same method, unless there are serious and sufficient grounds for a different procedure.
7. Where profits include parts of income which are treated separately in other articles of this Treaty, the provisions of those articles shall not be affected by the provisions of this Article.
Maritime, inland waterway and air transport
1. The profits arising from the operation of ships and aircraft in international transport shall be subject to taxation only in the Contracting State in which the head office of the undertaking is situated.
2. The profits arising from the operation of boats used in inland navigation shall be subject to taxation only in the Contracting State in which the head office of the undertaking's actual management is located.
3. Where the head office of a seagoing undertaking or inland navigation is on board a ship or a boat, that seat shall be deemed to be located in the Contracting State in which the home port of that ship or boat is situated or, in the absence of a home port, in the Contracting State where the operator of the ship or boat is domiciled.
4. The provisions of paragraph 1 shall also apply to profits from participation in a pool, joint operation or an international operational organisation.
Associate undertakings
If
(a) the undertaking of one Contracting State participates, directly or indirectly, in the management, control or financing of the undertaking of the other Contracting State; or
(b) if the same persons participate, directly or indirectly, in the management, control or financing of an undertaking of one Contracting State and an undertaking of the other Contracting State,
and if both undertakings in their business or financial relations are linked in one and the other by conditions adopted or imposed on them which differ from those which would be negotiated between independent undertakings, profits of that undertaking may be included and, consequently, taxed profits which would have been achieved without these conditions by one of the undertakings, but which could not have actually been achieved in view of those conditions.
Dividends
1. Dividends paid by a company having its registered office in one Contracting State, a person residing or having its registered office in the other Contracting State, shall be subject to taxation in that other State.
2. However, these dividends may be taxed in the Contracting State in which the company which pays them has its registered office, under the laws of that State. However, if the person who receives the dividends is the actual recipient of the dividends, the tax thus determined may not exceed 15% of the gross amount of those dividends.
The provisions of this paragraph shall not affect the taxation of the profits of the company used to pay dividends.
3. The term "dividends," as used in this Article, refers to income arising from shares, profit participation certificates, coupons, founding shares or other profit interests, with the exception of receivables, as well as income from other social holdings, which are based on income from shares by the tax legislation of the State in which the company paying dividends is established. This term also refers to revenue - even if it is paid in the form of interest - subject to taxation as income from capital contributed by shareholders to companies located in Belgium which are not public limited companies.
4. The provisions of paragraphs 1 and 2 shall not apply where the beneficiary of dividends domiciled in a Contracting State is engaged in an industrial or commercial activity in the second Contracting State in which the company paying dividends has its registered office, through a permanent establishment situated there, or through a single profession, through a permanent establishment situated there, and where the participation on the basis of which the dividends are paid is actually linked. In this case, dividends are subject to taxation in the latter State under its legislation.
5. Where a company having its registered office in one Contracting State achieves profits or income from the other Contracting State, that other State may not levy any tax on dividends paid by a company outside the territory of that other State, provided that such dividends are not paid to a person resident in that other State, or that the participation on the basis of which dividends are paid is not in fact linked to a permanent establishment or a permanent base situated in that other State, or to any tax on the company's non-distributed profits arising from the taxation of the non-distributed profits, or if the dividends or profits paid are not wholly or partly derived from profits or income derived from that other State.
Interest
1. Interest, having a source in one Contracting State and paid to a person residing or having his registered office in the other Contracting State, shall be subject to taxation in that other State.
2. However, such interest may be taxed in the Contracting State in which the source is located, under the legislation of that State. However, if the person who receives the interest is the actual recipient of the interest, the tax thus determined may not exceed 10% of its amount.
3. Notwithstanding the provisions of paragraph 2, the following interest shall be subject to taxation only in the Contracting State in which the beneficiary is domiciled:
(a) interest on commercial claims - including those which take the form of exchange claims - resulting from the repayment of goods, goods or services supplied on credit by an undertaking of one Contracting State to a person resident or established in the other Contracting State;
(b) interest on current accounts or loans - with the exception of bearer securities - between the banking undertakings of both Contracting States;
(c) interest on cash deposits, with the exception of bearer securities, held by persons resident or established in one Contracting State in banking undertakings of the other Contracting State, including public credit institutions.
4. The term "interest 'used in this Article shall refer to income from claims of any nature, whether provided or not with a hypothetical guarantee or a clause on participation in the debtor's profits, and in particular to income from public bonds and bonds, including premiums and lots linked to such securities, as well as any other proceeds assimilated to income from loans or in the same way as assessed by the State's tax legislation from which that income comes. However, the term" interest' shall not include, within the meaning of this Article, periodic penalty payments or interest to be treated as dividends within the meaning of Article 10 (3).
5. The provisions of paragraphs 1, 2 and 3 shall not apply where the recipient of interest who is resident or registered in one Contracting State is engaged in an industrial or commercial activity in the other Contracting State from which the interest is incurred through a permanent establishment situated there, or through a permanent establishment situated there, or through a free occupation, and where the claim giving interest is actually linked to it. In this case, the provisions of Article 7 or Article 14 shall apply depending on the case.
6. Interest is assumed to have a source in a particular Contracting State, if the debtor is that State itself, its lower administrative department, the local corporation or the person residing or having its registered office in that State. However, if the interest debtor, whether he is resident or not in a Contracting State, has a permanent establishment in a Contracting State for which an interest-granting loan has been negotiated and bears such interest at his expense, such interest shall be assumed to have a source in the Contracting State in which the permanent establishment is situated.
7. Where the amount of interest paid is assessed in the light of the claim on which it is paid, as a result of special relations existing between the debtor and the creditor or which are maintained by one or the other with third parties, the amount which the debtor would have agreed with the creditor if it had not been for similar relationships, the provisions of this Article shall apply only to that last amount. In this case, part of the interest exceeding that shall remain subject to tax under the legislation of each Contracting State and under other provisions of this Treaty.
Licence fees
1. Licensing fees, having a source in one Contracting State and paid to a person residing or having his registered office in the other Contracting State, shall be subject to taxation only in that other State if that person is the actual recipient of the licence.
2. Notwithstanding the provisions of paragraph 1, licence fees referred to in paragraph 3 (b) may also be taxed in the Contracting State in which their source is located, under the legislation of that State. However, the tax thus established may not exceed 5% of the gross amount of the royalties if the person who receives the royalties is the actual beneficiary.
3. The term "licence fees" used in this Article shall mean:
(a) compensation of any kind paid for the use or admission of copyright to the work of literary, artistic or scientific, including cinematographic and television films;
(b) compensation of any kind paid for the use or admission to use of a patent, trade mark, design or model, plan, secret instruction or production process, and for the use or admission to use of industrial, commercial or scientific equipment, unless it is an immovable property referred to in Article 6 and for information relating to experience acquired in the field of industrial, commercial or scientific.
4. The provisions of paragraphs 1 and 2 shall not apply where the licensee, residing or having his registered office in one Contracting State, carries out either an industrial or commercial activity through a permanent establishment situated there or a free occupation through a permanent establishment situated there and where the right or property giving rise to royalties is actually linked to it in the other Contracting State in which the licence fee is charged. In this case, the provisions of Article 7 or Article 14 shall apply depending on the case.
5. Licensing fees shall be presumed to have a source in one Contracting State if the debtor is the latter itself, its lower administrative department, the Territorial Corporation or the person residing or having its registered office in that State. However, where a licence fee debtor, whether or not domiciled in a Contracting State, has a permanent establishment in a Contracting State for which a contract has been negotiated on the basis of which the licence fee is paid and who bears such royalties on his or her own account, those royalties shall be presumed to have a source in the Contracting State in which the permanent establishment is situated.
6. Where the amount of the royalties paid, assessed in the light of the transactions for which they are paid, exceeds, by reason of the special relations existing between the debtor and the creditor or which one or the other maintains with third parties, the normal remuneration which the debtor would have agreed with the creditor if it had not been for similar relations, the provisions of paragraphs 1 and 2 shall apply only to that last amount. In this case, part of the salaries exceeding it shall remain subject to tax under the legislation of each Contracting State and under other provisions of this Treaty.
Capital gains
1. Profit from the disposal of immovable property, the definition of which is set out in Article 6 (2), shall be subject to taxation in the Contracting State in which such property is located.
2. Profit from the disposal of movable property, which is part of the assets of a permanent establishment which an undertaking of a Contracting State has in the other Contracting State, or the principal movable assets of a permanent base which a person resident in one Contracting State has in the other Contracting State for the purpose of carrying out a professional activity, including such profits from the total disposal of that permanent establishment (on its own or with the whole undertaking) or that permanent base, shall be subject to taxation in that other State.
However, profits from the disposal of ships or aircraft used in international transport and movable property intended for the operation of such ships or aircraft shall be taxed only in the Contracting State in which the property is subject to taxation pursuant to Article 22 (3).
3. Profit from the disposal of all other assets, including participation in a public limited liability company, if they are not part of the assets of a permanent establishment referred to in paragraph 2, shall be subject to taxation only in the Contracting State in which the transferee resides or resides.
Free professions
1. Revenue received by a person residing in a Contracting State for services rendered in the course of a professional activity or other independent activities of a similar nature shall be subject to taxation only in that State, unless that person has a permanent basis for the pursuit of his activities in the other Contracting State. If it has such a base, such income shall be subject to taxation in the other State, but only to the extent that it can be attributed to the activities carried out through that permanent base.
2. The term "free professions" shall include the particular independent activities of scientific, literary, artistic, educational or teaching, as well as the independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Dependent employment
1. Wages, salaries and other similar remuneration which a person residing in one Contracting State receives for reasons of paid employment shall be subject to taxation in that State only, subject to the provisions of Articles 16, 18, 19 and 20, if the employment is not carried out in the other Contracting State. If there is employment there, the remuneration received under this heading shall be subject to taxation in that other State.
2. The remuneration which a person residing in a Contracting State receives in respect of paid employment in the other Contracting State shall be subject to taxation in the first State only, notwithstanding the provisions of paragraph 1, if:
(a) the consignee shall stay in the other State for one or more periods which shall not exceed 183 days in whole during the calendar year;
(b) the remuneration shall be paid by the employer or in the name of an employer who is not domiciled in that other State; and
(c) the remuneration shall not be borne by a permanent establishment or permanent base held by an employer in that other State.
3. Remuneration in respect of paid employment carried out on board a ship or aircraft in international transport or on board a boat used in inland navigation shall be treated as remuneration for an activity carried out in the Contracting State in which the head office of the undertaking is situated and shall be subject to taxation in that State.
Tantiems
1. Tantiems, compensation for participation in administrative bodies and other similar salaries which a person residing in one Contracting State receives as a member of the administrative or supervisory board of a company having its registered office in the other Contracting State shall be subject to taxation in that other State. Similarly, Comanditists' remuneration in a limited partnership for shares located in Belgium is assessed.
2. The normal remuneration received by the persons referred to in paragraph 1 in another capacity shall be subject to taxation under the conditions laid down in either Article 14 or Article 15 (1) of this Treaty.
Artists and athletes
1. The income which public performing professionals, such as theatre, film, radio or television artists and musicians, as well as sportsmen, receive for their personal activity in this characteristic, shall be subject to taxation in the Contracting State in which those activities are carried out, irrespective of the provisions of Articles 14 and 15.
2. The provisions of paragraph 1 shall not apply to revenue received in one Contracting State by persons referred to in paragraph 1 as members of personnel of organisations of the other Contracting State which do not pursue gainful objectives.
3. Where income from activities carried out in person by public performers or sportsmen is paid to a person other than artists or athletes, it may be taxed, notwithstanding the provisions of Articles 7, 14 and 15, in the Contracting State in which the activities of an artist or athlete are carried out.
Pension
1. Pensions and other similar salaries referred to by reason of former employment to a person residing in a Contracting State shall be subject to taxation in that State only, subject to the provisions of Article 19 (1).
(2) Pensions and other benefits, whether regular or irregular, referred to under the social legislation of a Contracting State by that State, by one of its lower administrative departments or by one of its local corporations or by a legal person governed by public law of that State shall be subject to taxation only in that State.
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Regulation Information
| Citation | Decree of the Minister for Foreign Affairs No. 24 / 1978 Coll., on the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Belgium on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 10.03.1978 |
|---|---|
| Effective from | 17.12.1977 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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