CONVENTION BETWEEN THE GOVERNMENT OF THE KINGDOM OF BELGIUM AND THE GOVERNMENT OF ROMANIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
Status: IN FORCE, applicable since 1 January 1999
Preamble
The Government of the Kingdom of Belgium and the Government of Romania,
Desiring to promote and reinforce the economic relationship between the two countries by the conclusion of a Convention for the avoidance of double taxation and prevention of tax avoidance with respect to taxes on income and on capital,
have agreed to the following provisions:
Article 1
Personal scope
This Convention shall apply to persons who are residents of one or both Contracting States.
Article 2
Taxes covered
This Convention shall apply to taxes on income and on capital imposed on behalf of each Contracting State, of their administrative territorial units or their local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation of such property.
The existing taxes to which the Convention shall apply are:
in the case of Romania;
the individual income tax;
the tax on profit;
the tax on wages and other remuneration;
the income tax on non-residents;
the tax on dividends;
the tax on agricultural income;
the tax on buildings and land occupied by buildings or other constructions,
(hereinafter referred to as “Romanian tax”);
in the case of Belgium:
the individual income tax (l’impôt des personnes physiques);
the corporate income tax (l’impôt des sociétés);
the income tax on bodies corporate (l’impôt des personnes morales);
the income tax on non-residents (l’impôt des non- résidents);
the special contribution assimilated to the individual income tax (la côtisation spéciale assimilée à l’impôt des personnes physiques);
the additional crisis tax (la contribution complémentaire de crise);
including the prepayments, the surcharges on the said taxes, withholdings, as well as the supplements to the individual income tax
(hereinafter referred to as “Belgian tax”).
The Convention shall also apply to any identical or substantially similar taxes which are imposed subsequent to the date of signing of this Convention in addition to, or in the place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any important changes which have been made to their respective taxation laws.
Article 3
General definitions
In this Convention:
the terms “a Contracting State” and “the other Contracting State” means Romania or Belgium, as the context requires;
the term “Romania” means the territory of Romania, including its territorial waters, as well as the exclusive economic area and the air space, over which Romania exercises its sovereignty, its sovereign rights and its jurisdiction under its own law and in accordance with international law;
the term “Belgium” means the territory of the Kingdom of Belgium, including its territorial waters, as well as the maritime areas and air space, over which the Kingdom of Belgium exercises sovereign rights or jurisdiction in accordance with international law;
the term “person” comprises an individual, a company and any other body of persons, legally established in a Contracting State;
the term “Company” means any body corporate or any other entity which is treated as a body corporate for tax purposes;
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;
the term “national” means:
any individual possessing the citizenship of Romania or the nationality of Belgium, as the case requires;
all bodies corporate, partnerships or associations established in accordance with the law in force in a Contracting State;
the term “international traffic” means any transport by ship, aircraft, road or railway vehicle, operated by an enterprise which has its place of effective management in a Contracting State, except when the transport is carried out solely between places in the other Contracting State;
the term “competent authority” means, in both Contracting States, the Minister of Finance or its authorized representative.
As regards the application of the Convention by a Contracting State, any term not defined therein shall have the meaning that it has under the law of that State for the purposes of the taxes to which the Convention applies, unless the context requires otherwise.
Article 4
Resident
For the purposes of this Convention, 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 any other criterion of a similar nature. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.
Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows:
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);
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;
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;
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.
Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.
Article 5
Permanent establishment
For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of the enterprise is wholly of partly carried on.
The term “permanent establishment” includes especially:
a place of management;
a branch;
an office;
a factory;
a workshop;
a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.
The term “permanent establishment” also includes a building site, a construction or installation project or supervising or consulting activities relating thereto, but only if this site, project or these activities last for more than 9 months.
Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include:
the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
the maintenance of a fixed place of business solely for the purpose of purchasing goods or of collecting information, for the enterprise;
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;
the sale of goods or merchandise belonging to the enterprise, displayed at a trade fair or exhibition, at the outcome of the trade fair or exhibition;
the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (1) to (6), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
Notwithstanding the provisions of paragraphs 1 and 2, where a person, other than an agent of an independent status to whom paragraph 6 applies, is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.
An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other intermediary of an independent status, provided that such persons are acting in the ordinary course of their business.
The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.
Article 6
Income from immovable property
Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
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, livestock and equipment used in agriculture and forestry, rights to which the provisions of 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, boats, aircraft, road or railway vehicles shall not be regarded as immovable property.
The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
The provisions of paragraphs 1 and 3 shall also apply to the 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
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 enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
Subject to the provisions of paragraph 3, 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.
In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are made for the purposes of the permanent establishment, including executive and general administrative expenses so made, whether in the State in which the permanent establishment is situated or elsewhere.
Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.
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.
For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.
Article 8
Transport enterprises
Profits from the operation of ships, aircraft or road or railway vehicles in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
The provisions of paragraph 1 also apply to:
occasional profits resulting from renting out the bare hull of ships or aircraft operated in international traffic;
profits resulting from the use or renting of containers, provided that these profits are complementary or accessory to the profits described in that paragraph.
Profits from the operation of boats engaged in inland waterways transport shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
If the place of effective management of a shipping enterprise or of an inland waterways transport enterprise is aboard a ship or boat, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship or boat is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship or boat is a resident.
The provisions of paragraphs 1 and 2 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
Article 9
Associated enterprise
Where:
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
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 financial or commercial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
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 accrued 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 an adjustment it considers appropriate to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall, if necessary, consult each other.
Article 10
Dividends
Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
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:
5 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly or indirectly at least 25 per cent of the capital of the company paying the dividends;
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.
The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims, participating in profits, as well as the income, even if attributed in the form of interest, which is subjected to the same tax treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply.
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, except insofar as such dividends are paid to a resident of that other State or 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 on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.
Article 11
Interest
Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
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 10 percent of the gross amount of the interest.
Notwithstanding the provisions of paragraph 2, interest paid on loans or debt-claims, granted, guaranteed or insured by the other Contracting State, its administrative territorial units or local authorities or one of its institutions, are exempted from tax in the Contracting State from which they originate.
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” as used in this Article does not mean penalty charges for late payment nor interest payments treated as dividends according to Article 10, paragraph 3.
The provisions of paragraphs 1, 2 and 3 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 case the provisions of Article 7 of Article 15, as the case may be, shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is that State itself, one of its administrative territorial units or local authorities 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 such 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.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such 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 Convention.
Article 12
Royalties
Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such royalties may also be taxed in the Contracting State in which they arise 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 5 per cent of the gross amount of the royalties.
The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films as well as films and recordings for television or radio broadcasting or any other form of transmission, any computer program, patent, trade mark, design or 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.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or the good in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, one of its administrative- territorial units or local authorities 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 obligation to pay the royalties was incurred and the royalties are borne by that permanent establishment or fixed base, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.
Where, by reason of a special relationship between the payer 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 payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such 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 the Convention.
Article 13
Commission
Commission arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such commission 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 commission is a resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the commission.
The term “commission” as used on this Article means payments to any person as remuneration for services rendered as intermediary; this term shall not include income referred to in Articles 15 and 16.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the commission, being a resident of a Contracting State, carries on business in the other Contracting State from which the commission is derived through a permanent establishment situated therein, or performs professional services from a fixed base situated therein, and the commission is effectively connected with such establishment or base. In such a case the provisions of Article 7 or Article 15, as the case may be, shall apply.
Commission shall be deemed to arise in a Contracting State, when the payer is that State itself, one of its administrative territorial units or local authorities or a resident of that State. However, if the payer of the commission, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment in connection with which the obligation to pay the commission was incurred, and the commission is borne by it, then such commission shall be deemed to arise in the Contracting State in which the permanent establishment is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the commission, having regard to the services for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such 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 Convention.
Where a resident of a Contracting State who derives a commission from the other Contracting State makes a claim therefore for any particular tax year of financial year, the tax which could be levied on such commission in the Contracting State in which it arises shall be determined as if the said resident had a permanent establishment in that State and as if the commission was attributable to this permanent establishment.
Article 14
Capital gains
Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.
Gains from the alienation of ships, aircraft, road or railway vehicles operated in international traffic, boats engaged in inland waterways transport or movable property pertaining to the operation of such means of transport, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.
Article 15
Independent personal services
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.
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 16
Dependent personal services
Subject to the provisions of Articles 17, 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.
Notwithstanding the provisions of paragraph 1, 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:
the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period; and
the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship, aircraft, road or railway vehicle operated in international traffic, or aboard a boat engaged in inland waterways transport, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.
Article 17
Directors’ fees and management remuneration
Directors’ fees, attendance fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or supervisory board of a company, which is a resident of the other Contracting State, may be taxed in that other State.
Remuneration which a person referred to in paragraph 1 receives from the company with respect to the performance of daily managerial or technical activities, as well as remuneration which a resident of a Contracting State receives with respect to his personal activities in his capacity as a partner of a company, which is not a company with share capital and which is a resident of the other Contracting State, shall be taxable in accordance with the provisions of Article 16, as if it would pertain remuneration which an employee receives from his employment and as if the company was his employer.
Article 18
Artistes and athletes
Notwithstanding the provisions of Articles 15 and 16, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.
Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.
Notwithstanding the provisions of paragraphs 1 and 2, income from activities exercised as such by an entertainer or a sportsman, being a resident of a Contracting State, shall be taxable only in that State if the activities are performed in the other Contracting State under a cultural or athletic exchange program approved by the government of both Contracting States.
Article 19
Pensions
Subject to the provisions of Article 20, paragraph 2, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
However, pensions and other maintenance allowances, whether or not periodical, paid pursuant to the social legislation of a Contracting State or in the context of a general regime organised by that Contracting State in order to complement the allowances granted by its social legislation, shall be taxable only in that State.
Article 20
Public remuneration and pensions
Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or one of its administrative territorial units or local authorities to an individual in respect of services rendered to that State or one of its administrative territorial units or local authorities, shall be taxable only in that State.
However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:
is a national of that State; or
did not become a resident of that State solely for the purpose of rendering the services.
Any pension paid by, or out of funds created by, a Contracting State or one of its administrative territorial units or local authorities to an individual in respect of services rendered to that State or one of its administrative territorial units or local authorities shall be taxable only in that State.
However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
The provisions of Articles 16, 17 and 19 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect of services rendered in connection with a business carried on by a Contracting State or one of its administrative territorial units or local authorities.
Article 21
Professors, students and trainees
Remuneration of any kind whatsoever derived by professors and other members of the teaching profession as well as researchers, who are resident in a Contracting State and who make a temporary visit to the other Contracting State for the purpose of teaching or carrying out scientific research at a university or any other officially recognized educational institution, shall be taxable only in the first-mentioned State for a period not exceeding two years as from the date of arrival of these persons in the other State. This provisions shall not apply to remuneration received for research if such research is undertaken primarily for the special benefit of one or more persons.
A student who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State on a temporary basis for the sole purpose of his education or training at a university or any other educational institution, officially recognized by the first- mentioned State, shall be exempt from tax in the first-mentioned State in respect of:
the sums which he receives from sources outside that State for the purposes of his living expenses, study or training;
remuneration received for a period not exceeding two years for an employment exercised in that State with respect to his study or training, provided that this remuneration does not exceed, depending on the case, BEF 120 000 or the equivalent in Romanian currency in any calendar year.
Article 22
Other income
Items of income of a resident of a Contracting State, that are of a nature or source not dealt with in the foregoing Articles of this Convention and that are subject to tax in that State, shall be taxable only in that State.
The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through 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 income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply.
Article 23
Taxation of capital
Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State.
Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or by movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.
Capital represented by ships, aircraft, road or railway vehicles operated in international traffic and by boats engaged in inland waterways transport, and by movable property pertaining to the operation of such ships, aircraft and boats, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
All other elements of capital of a resident of a Contracting State shall be taxable only in that State.
Article 24
Methods for elimination of double taxation
In Romania, double taxation shall be avoided in the following manner:
Where a resident of Romania derives income or owns items of capital which, in accordance with the provisions of this Convention, may be taxed in Belgium, Romania shall, subject to the provisions of sub-paragraphs (2) and (3), exempt such income or items of capital from tax but may, in calculating the tax on the remaining income or capital of such resident, apply the rate of tax which would have been applicable if the exempted income or items of capital had not been so exempted.
Where a resident of Romania derives income which, in accordance with the provisions of Articles 10 to 13, may be taxed in Belgium, Romania shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Belgium. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Belgium.
Notwithstanding the provisions of sub-paragraph (2), dividends referred to in Article 10, paragraph 3, received by a company, resident of Romania, from a company, resident of Belgium, shall be exempt from the tax on profit in Romania, to the extent that this exemption would be granted if both companies would be resident of Romania.
In Belgium, double taxation shall be avoided in the following manner:
Where a resident of Belgium derives income, not being income referred to under sub-paragraphs (2) and (3) below, or owns items of capital which, in accordance with the provisions of the Convention, may be taxed in Romania, Belgium shall exempt such income or such items of capital from tax but may, in calculating the tax on the remaining income or capital of such resident, apply the rate of tax which would have been applicable if the exempted income or items of capital had not been so exempted.
Subject to the provisions of Belgian law regarding the credit on Belgian tax for tax paid abroad, where a resident of Belgium derives items of income which are included in his total income subject to Belgian tax and which consist of dividends, taxable in accordance with Article 10, paragraph 2 and not exempted from Belgian tax pursuant sub-paragraph (3) below, of interest, taxable in accordance with Article 11, paragraphs 2 or 7, or of royalties, taxable in accordance with Article 12, paragraphs 2 or 6, the Romanian tax levied with resect to these items of income shall be credited against the Belgian tax relating to such income.
Dividends, referred to in Article 10, paragraph 3, which a company, resident of Belgium, received from a company, resident of Romania, shall be exempt from corporate income tax in Belgium, under the conditions and limits prescribed by Belgian law.
Where, in accordance with Belgian law, losses, sustained by a permanent establishment in Romania of an enterprise operated by a Belgian resident, have actually been deducted from the profits of that enterprise for purposes of its taxation in Belgium, then the exemption provided for in sub-paragraph (3) shall not apply in Belgium to profits for other tax periods which can be allocated to that establishment if and to the extent that such profits would also be exempt from Romanian tax on account of their having been set off against the said losses.
Article 25
Non-discrimination
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, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article, also apply to persons who are not resident of one or both of the Contracting States.
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. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil state or family responsibilities which it grants to its own residents.
Except where the provisions of Article 9, paragraph 1, Article 11, paragraph 7 or Article 12, paragraph 6, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.
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 first-mentioned State are or may be subjected.
No provision of this Article shall be interpreted as preventing a Contracting State:
from taxing the profits attributable to a permanent establishment in the Contracting State of a company which is resident in the other Contracting State at the rate foreseen in the law of the first-mentioned State, provided that this rate does not exceed the maximum rate applicable to profits of companies which are residents of the first-mentioned State.
from levying withholding tax on dividends from a participation which is effectively connected with a permanent establishment in the Contracting State of a company which is resident in the other Contracting State.
The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description.
Article 26
Mutual agreement procedure
Where a person 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 Convention, 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 Article 25, paragraph 1, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.
The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive to 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 which is not in accordance with the Convention.
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 Convention.
The competent authorities of the Contracting States shall consult together in respect of measures required to carry out the provisions of the Convention and in particular with respect to the supporting documents which the residents of each Contracting State must furnish in order to benefit in the other Contracting State from the exemptions or reductions in tax provided for in this Convention.
The competent authorities of the Contracting States may communicate with each other directly with regard to the application of the Convention.
Article 27
Exchange of information
The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention and of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention.
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) concerned with 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 Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.
In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
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;
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 (“ordre public”).
Article 28
Assistance in collection
The Contracting States undertake to assist each other in the notification and collection of the taxes referred to under Article 2, together with additional amounts, surcharges, late-payment interest, costs and fines which are not of a penal character relating to these taxes.
If requested by the competent authority of a Contracting State, the competent authority of the other Contracting State shall, in accordance with the laws and regulations applicable to the notification and collection of the said taxes of the last-mentioned State, attend to the notification and collection of tax debts referred to in paragraph 1 which are recoverable in the first- mentioned State. Such debts shall not enjoy priority in the State in which application is made and that State shall not be required to carry out executory measures for which there is no provision in the law or regulation of the State making the application.
Application referred to in paragraph 2 shall be supported by an official copy of rights of execution and possibly accompanied by an official copy of final administrative or juridical decisions.
With respect to tax debts still subject to appeal, the competent authority of a Contracting State may, in order to protect its rights, request the competent authority of the other Contracting State to take such measures of conservation as are authorised by its laws; the provisions of paragraphs 1 to 3 shall apply, mutatis mutandis, to such measures.
The provisions of Article 27, paragraph 1 shall also apply to any information disclosed to the competent authority of the requesting State under this Article.
Article 29
Members of diplomatic missions and consular posts
The provisions of this Convention shall not affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.
Article 30
Entry into force
Each Contracting State will notify the other Contracting States of the fulfilment of the procedures which are necessary under its own legislation for this Convention to enter into force. The Convention will enter into force on the thirtieth day following the last of these notifications.
The provisions of the Convention will apply:
to taxes withheld at source on income attributed or payable as from the first day of January of the year which immediately follows the year during which this Convention entered into force;
to other taxes on income for any taxable period starting on the first day of January of the year which immediately follows the year during which this Convention entered into force;
to taxes on capital due on items of capital existing on the first day of January of the whole year which follows the year during which this Convention entered into force.
The provisions of the Convention between the Government of the Kingdom of Belgium and the Government of the Socialist Republic of Romania for the avoidance of double taxation with respect to taxes on income and on capital, signed in Bucharest on 14 October 1976 shall cease to apply to Romanian or Belgian tax to which this Convention will apply in accordance with the provisions of paragraph 2.
Article 31
Termination
This Convention shall remain in force indefinitely.
However, either Contracting State may terminate the Convention, through diplomatic channels, by giving to the other Contracting State written notice of termination not later than the 30th day of June of any calendar year from the fifth year following that in which the Convention entered into force. In case of such a termination, the Convention will cease to apply:
to taxes withheld at source on income attributed or payable as of the first day of January of the year which immediately follows the year during which the termination was notified;
to other taxes on income for any taxable period starting as of the first day of January of the year which immediately follows the year during which the termination was notified;
to taxes on capital due on items of capital existing on the first day of January of the year which immediately follows the year during which the termination was notified.
In witness whereof the undersigned, hereto duly authorized by their respective Governments, have signed this Convention.
Done in Brussels, the 4th of March 1996, in duplicate, in the French, Dutch and Romanian languages, all three texts being equally authentic. In case of divergence, the French text shall prevail.
