UK-Belgium Tax agreement
A new protocol to the Double Taxation Convention between the UK and Belgium was recently signed in Paris by the Financial Secretary to the Treasury and the Belgian Deputy Prime Minister.
The protocol updates the Convention in order to update the exchange of information clauses to bring the Convention in line with the OECD’s model. Briefly, the Article is drafted to allow for the exchange of information necessary to prevent fraud.
There are also some other changes including a new binding arbitration clause in the event of a protracted dispute between the Belgian and UK tax authorities. Two new articles relate to dividends and permit zero % withholding tax to direct investors and to pension funds. There is also an interest article that removes withholding tax on all interest paid between enterprises.
The protocol will take force once both countries have finalised the legislative procedures. The provisions will then take effect from the following calendar year.