Belgium's Chamber of Representatives endorsed the DTA signed with China

Belgium's Chamber of Representatives endorsed the DTA signed with China

On 7 November 2013 Belgium's Chamber of Representatives, the lower house of the Federal Parliament, endorsed the Avoidance of Double Taxation Agreement ("DTA") signed with China on 7 October 2009.

The DTA is expected to enter into force on 1 January 2014 and replace the Belgian–Chinese income tax treaty of 18 April 1985.

This Agreement is one of China’s most favorable DTAs; it basically places Belgium on a par with other preferred trading partners of China - Hong Kong and Singapore.

The important differences from the current 1985 agreement include lower dividend and royalty withholding taxes:

  • Withholding tax rate reduction on dividends from 10% to 5% on condition of minimum 25% or more shareholdings for an uninterrupted period of at least 12 months prior to payment (the same as under the Chinese-Hong Kong Tax Arrangement and Chinese-Singapore Tax Treaty);
  • Withholding tax rate reduction on royalties from 10% to 7% (the same as under the Chinese-Hong Kong Tax Arrangement).

The maximum withholding tax on interest under both the new treaty and the 1985 one is set at 10%.

 

The texts of the new Agreement and Protocol to it are available on the Belgium’s Service Public Federal Finances website.

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