A new administrative guideline has recently been issued on the terminology used in the articles in double taxation treaties regulating exemptions from income tax in Belgium. This guideline reaffirms the view previously set out in the administrative guideline of 11/5/2006.

The new guideline specifically discusses the conditions under which a tax exemption can be granted. It reiterates that, depending on the relevant double taxation treaty, income may only be exempt from Belgian taxation if:

1. it is taxable in the source state; or
2. it is taxed in the other state (has been subject to normal taxation in the other state even if exempt from tax under local legislation); or
3. it was actually taxed in the other contracting state.

Furthermore, it emphasises that it is the taxpayer’s duty to prove that the income should be exempt under the double taxation treaty.

reference:

Circular AFZ/AAF n° 4/2010