Double Taxation Relief (Taxes on Income)

L.N. 83 of 2003

INCOME TAX ACT

(CAP.123)

Double Taxation Relief (Taxes on Income)

(Kingdom of Belgium) (Amendment) Order, 2003

IN exercise of the powers conferred by article 76 of the Income

Tax Act, the Minister of Finance has made the following order>-

The title of this order is the Double Taxation Relief (Taxes on Citation.

Income) (Kingdom of Belgium) (Amendment) Order, 2003, and it shall

be read and construed as one with the Double Taxation Relief (Taxes L.N. 108 of 1976.

on Income) (Kingdom of Belgium) Order, 1976, hereinafter referred to

as “the principal order”.

Supplementary

It is hereby declared>-

FTEHIM SUPPLIMENTARI

LI JEMENDA L-FTEHIM BEJN L-ISTAT TA’ MALTA

U R-RENJU TAL-BEL:JU

G{ALL-{ELSIEN MIT-TAXXA DOPPJA

U T{ARIS MINN EVA}JONI FISKALI,

U L-PROTOKOLL,

IFFIRMATI FI BRUSSEL FIT-28 TA’ :UNJU, 1974

Il-Gvern ta’ l-Istat ta’ Malta u l-Gvern tar-Renju tal-Bel;ju, billi jixtiequ jag[mlu

Ftehim Supplimentari biex jemendaw il-Ftehim bejn ir-Renju tal-Bel;ju u l-Istat ta’

Malta g[all-[elsien mit-taxxa doppja u t[aris minn eva]joni fiskali, u l-Protokoll,

iffirmati fi Brussel fit-28 ta’ :unju, 1974 (hawn i]jed ’il quddiem rispettivament

imsejj[a b[ala “il-Ftehim” u “il-Protokoll”), ftehmu kif ;ej>

Artiklu I

Paragrafu (3) ta’ l-Artiklu 2 tal-Ftehim g[andu jit[assar u ji;i sostitwit b’dan li

;ej >

“(3) It-taxxi e]istenti li g[alihom japplika dan il-Ftehim huma, b’mod partikolari>

(a) Fil-Bel;ju >

(i)

it-taxxa fuq l-income individwali<

(ii) it-taxxa fuq l-income korporata<

(iii) it-taxxa fuq l-income fuq entitajiet legali<

(iv) it-taxxa fuq l-income fuq persuni mhux residenti<

(v) l-imposta spe/jali assimilata mat-taxxa fuq l-income individwali<

inklu]i [lasijiet bil-quddiem, is-surcharges fuq dawk it-taxxi u [lasijiet bil-quddiem,

u s-supplimenti g[at-taxxa fuq l-income individwali, (hawn i]jed ’il quddiem imsejj[a

“it-taxxa tal-Bel;ju”).

(b) F’Malta>

it-taxxa fuq l-income, inklu]i [lasijiet bil-quddiem ta’ taxxa sew jekk bi tnaqqis minn

ras il-g[ajn jew xort’o[ra, hawn i]jed ’il quddiem imsejj[a “it-taxxa ta’ Malta”).”.

Artiklu II

Dan is-subparagrafu (/) li ;ej g[andu ji]died f’paragrafu (3) ta’ l-Artiklu 11 tal-

Ftehim >

“(/) img[ax fuq pretensjonijiet debitri/i kummer/jali - inklu]i pretensjonijiet

debitri/i rappre]entati b’istrumenti negozjabbli - kif jirri]ultaw minn pagamenti deferiti

g[al o;;etti, merkanzija jew servizzi fornuti minn intrapri]a ta’ Stat Kontraenti

g[andhom ikunu e]enti mit-taxxa fl-Istat Kontraenti l-ie[or.”

Artiklu III

It-titolu u t-test ta’ l-Artiklu 16 tal-Ftehim g[andu jit[assar u ji;i sostitwit b’dan

li ;ej >

MANAGERS TA’ KUMPANNIJI

(1) Id-drittijiet ta’ diretturi u pagamenti o[ra simili li jinkisbu minn residenti ta’

Stat Kontraenti fil-kapa/ità tieg[u b[ala membru tal-bord tad-diretturi jew ta’ xi organu

simili ta’ kumpannija residenti ta’ l-Istat Kontraenti l-ie[or jistg[u ji;u intaxxati f’dak

l-Istat l-ie[or.

Din id-disposizzjoni g[andha wkoll tkun tapplika g[al pagament miksub dwar

it-twettiq ta’ funzjonijiet li, ta[t il-li;i ta’ l-Istat Kontraenti li tieg[u l-kumpannija tkun

residenti, jitqiesu b[ala funzjonijiet ta’ xorta simili b[al dawk imwettqa minn persuna

msemmija f’dik id-disposizzjoni.

(2) Ir-rimunerazzjoni li tinkiseb minn persuna mesemmija fil-paragrafu (1) mill-

kumpannija g[ar-rigward tat-twettiq tal-funzjonijiet ta’ kuljum ta’ xorta mana;erjali

jew teknika u r-rimunerazzjoni li residenti ta’ Stat Kontaenti jir/ievi g[ar-rigward ta’

l-attività personali tieg[u b[ala so/ju ta’ kumpannija, li ma tkunx kumpannija b’sehem

azzjonarju, li jkun residenti ta’ l-Istat Kontraenti l-ie[or, jista’ ji;i intaxxat skond id-

disposizzjonijiet ta’ qabel ta’ l-Artiklu 15, b[allikieku r-rimunerazzjoni kienet

rimunerazzjoni ta’ impjegat g[ar-rigward ta’ xi impjieg u b[allikieku riferenzi g[all-

impjegat kienu riferenzi g[all-kumpannija.”

Artiklu IV

It-test ta’ l-Artiklu 18 tal-Ftehim g[andu jit[assar u ji;i sostitwit b’dan li ;ej >

“(1) Bla [sara g[ad-disposizzjonijet tal-paragrafu (2) ta’ l-Artiklu 19,

pensjonijiet u rimunerazzjoni o[ra simili li ti;i m[allsa lil residenti ta’ Stat Kontraenti

b[ala korrispettiv g[al impjieg img[oddi, g[andhom ikunu taxxabbli biss f’dak l-Istat.

(2) Madankollu, pensjonijiet u allowances o[ra, perjodi/i jew mhux perjodi/i,

im[allsa ta[t il-le;islazzjoni tas-sigurtà so/jali ta’ Stat Kontraenti jew ta[t xi skema

pubblika organizzata minn Stat Kontraenti sabiex jissupplementa l-benefi//ji ta’ dik

il-le;islazzjoni, g[andhom ji;u intaxxati f’dak l-Istat.”

Artiklu V

Is-subparagrafi (a), (b) u (/) tal-paragrafu (1) ta’ l-Artiklu 23 tal-Ftehim

g[andu jit[assar u ji;i sostitwit b’dan li ;ej>

“(a) Meta residenti tal-Bel;ju jikseb income jew ikun jippossjedi o;;etti kapitali

li jistg[u ji;u intaxxati f’Malta skond id-disposizzjonijiet ta’ dan il-Ftehim, li ma jkunux

dawk tas-subparagrafu (b) tal-paragrafu (2) ta’ l-Artiklu 10, tal-paragrafi (2) u (7) ta’ l-

Artiklu 11 u tal-paragrafi (2) u (5) ta’ l-Artiklu 12, il-Bel;ju g[andu je]enta dak l-

income jew dawk l-o;;etti kapitali mit-taxxa imma jista’, fil-kalkolu ta’ l-ammont tat-

taxxa fuq l-income jew kapital li jifdal ta’ dak ir-residenti, japplika r-rata ta’ taxxa li

kien kieku japplika li kieku dak l-income jew o;;etti kapitali ma kienux e]entati.

(b) (i) Bla [sara g[ad-disposizzjonijiet tal-li;i tal-Bel;ju g[ar-rigward tal-fatt

li t-taxxi m[allsa barra l-pajji] jitqiesu b[ala kreditu kontra t-taxxa tal-Bel;ju, meta

residenti tal-Bel;ju jikseb o;;etti ta’ l-income aggregat tieg[u g[all-finijiet tat-taxxa

tal-Bel;ju li huma dividendi taxxabbli skond il-paragrafu (2) (b) ta’ l-Artiklu 10, mhux

e]enti mit-taxxa tal-Bel;ju skond is-subparagrafu (/) ta’ dan l-Artiklu, jew img[ax

taxxabbli skond il-paragrafi (2) jew (7) ta’ l-Artiklu 11, jew royalties taxxabbli skond

il-paragrafi (2) jew (5) ta’ l-Artiklu 12, it-taxxa ta’ Malta li tin;abar fuq dak l-income

g[andha titqies b[ala kreditu kontra t-taxxa tal-Bel;ju fir-rigward ta’ dak l-income.

(ii) Il-Bel;ju g[andu wkoll iqis il-kreditu li hemm provdut dwaru f’(i) ta’ dan

is-subparagrafu g[ar-rigward ta’ taxxa li tit[allas fuq dividendi jew img[ax minn

investiment dirett li huma taxxabbli f’Malta bis-sa[[a tal-Ftehim u tal-li;i ;enerali ta’

Malta meta dik it-taxxa tkun temporanjament mog[tija lura jew imnaqqsa ta[t

disposizzjonijiet spe/jali mfassla biex jippromwovu l-i]vilupp ekonomiku ta’ Malta.

Dak il-kreditu g[andu japplika g[all-ewwel [ames snin li dwarhom il-Ftehim

Supplimentari jkun effettiv< madankollu l-awtoritajiet kompetenti ta’ l-Istati Kontraenti

jistg[u jikkonsultaw lil xulxin biex jistabbilixxu jekk dan il-perjodu ta’ ]mien ikunx se

ji;i mtawwal jew le.

Il-fra]i “dividendi jew img[ax minn investment dirett” tfisser dividendi im[allsa

g[ar-rigward ta’ ishma jew img[ax im[allas g[ar-rigward ta’ pretensjonijiet debitri/i

li huma direttament u g[al ]mien li jdum konnessi ma’ pro;etti ta’ ]vilupp industrijali

jew kummer/jali f’Malta.

(/) Meta kumpannija li tkun residenti tal-Bel;ju jkollha ishma f’kumpannija li

tkun residenti f’Malta, id-dividendi li ji;u lilha m[allsa mill-kumpannija l-a[[ar

imsemmija u li jistg[u ji;u intaxxati f’Malta skond is-subparagrafu (b) tal-paragrafu

(2) ta’ l-Artiklu 10, g[andhom ikunu e]enti mit-taxxa korporata fuq l-income fil-Bel;ju

ta[t il-kondizzjonijiet u fil-limiti li hemm provdut dwarhom fil-li;i tal-Bel;ju.”

Artiklu VI

Paragrafu (2) tal-Protokoll huwa im[assar. B’konsegwenza ta’ dan, l-enumerar

tal-paragrafu (1) g[andu jkun eliminat.

Artiklu VII

(1) Dan il-Ftehim Supplimentari g[andu jkun ratifikat u l-istrumenti ta’ ratifika

g[andhom ji;u skambjati fi Brussel kemm jista’ jkun malajr.

(2) Il-Ftehim Supplimentari g[andu jibda jse[[ 30 ;urnata wara d-data ta’ l-

iskambju ta’ l-istrumenti ta’ ratifika, u d-disposizzjonijiet tieg[u g[andu jkollhom se[[>

(a) Fil-Bel;ju >

(i) dwar it-taxxi dovuti minn ras il-g[ajn fuq income akkreditat

jew li jit[allas fi jew wara l-1 ta’ Jannar 1993<

(ii) dwar it-taxxi li ma jkunux it-taxxi dovuti minn ras il-g[ajn, fuq

income ta’ xi perjodu taxxabbli li jintemm fi jew wara l-31 Di/embru 1992.

(b) F’Malta, dwar it-taxxi li jin;abru g[al xi sena ta’ stima li tibda fi jew

wara l-1 ta’ Jannar 1993.

Artiklu VIII

Dan il-Ftehim Supplimentari, li g[andu jifforma parti integrali tal-Ftehim u l-

Protokoll, g[andu jibqa’ fis-se[[ g[al daqstant kemm il-Ftehim u l-Protokoll jibqg[u

fis-se[[.

B’XIEHDA TA’ DAN, is-sottoskritti, awtorizzati kif imiss mill-Gvernijiet

rispettivi tag[hom, iffirmaw dan il-Ftehim Supplimentari.

MAG{MUL fi Brussel, illum tlieta u g[oxrin ta’ :unju 1993, in duplikat fl-

ilsien Ingli].

G{ALL-GVERN

G{ALL-GVERN

TA’ L-ISTAT TA’ MALTA >

TAR-RENJU TAL-BEL:JU >

Guido de MARCO

Willy CLAES

Ministru ta’ l-Affarijiet Barranin

Ministru ta’ l-Affarijiet Barranin

Agreement and

Protocol.

(a) that the amendments to the principal order specified in

the Schedule to this order have been made with the Government

of the Kingdom of Belgium with a view to affording relief from

double taxation in relation to the following taxes imposed by the

laws of the Kingdom of Belgium>

(i) the individual income tax<

(ii) the corporate income tax<

(iii) the income tax on legal entities<

(iv) the income tax on non-residents<

(v) the special levy assimilated to the individual income

tax<

including the prepayments, the surcharges on such taxes and

prepayments, and the supplements to the individual income tax<

(b) that it is expedient that those amendments should have

effect<

(c) that the Supplementary Agreement specified in the

Schedule to this order has entered into force on the 17 th October,

2002. SCHEDULE

SUPPLEMENTARY AGREEMENT

AMENDING THE AGREEMENT BETWEEN THE STATE OF MALTA

AND THE KINGDOM OF BELGIUM

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION,

AND THE PROTOCOL,

SIGNED AT BRUSSELS ON JUNE 28, 1974

The Government of the State of Malta and the Government of the Kingdom of

Belgium, desiring to conclude a Supplementary Agreement to amend the Agreement

between the Kingdom of Belgium and the State of Malta for the avoidance of double

taxation and the prevention of fiscal evasion, and the Protocol, signed at Brussels on

June 28, 1974 (hereinafter respectively referred to as “the Agreement” and “the

Protocol”), have agreed as follows>

Article I

Paragraph (3) of Article 2 of the Agreement shall be deleted and replaced by the

following >

“(3) The existing taxes to which this agreement shall apply are, in particular >

(a)

In Belgium >

( i) the individual income tax <

(ii) the corporate income tax <

(iii) the income tax on legal entities <

(iv) the income tax on non-residents <

(v) the special levy assimilated to the individual income tax <

including the prepayments, the surcharges on these taxes and prepayments, and

the supplements to the individual income tax, (hereinafter referred to as “Belgian

tax”).

(b) In Malta >

the income tax, including prepayments of tax whether made by deduction at source

or otherwise, (hereinafter referred to as “Malta tax”).”

Article II

The following subparagraph (c) shall be added in paragraph (3) of Article 11 of

the Agreement >

“(c) interest on commercial debt-claims - including debt-claims represented by

negotiable instruments - resulting from deferred payments for goods, merchandise or

services supplied by an enterprise of a Contracting State shall be exempt from tax in

the other Contracting State.”

Article III

The title and the text of Article 16 of the Agreement shall be deleted and replaced

by the following >

“COMPANY MANAGERS

(1) Directors’ 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 a similar

organ of a company which is a resident of the other Contracting State may be taxed in

that other State.

This provision shall also apply to payment derived in respect of the discharge of

functions which, under the law of the Contracting State of which the company is a

resident, are regarded as functions of a similar nature as those performed by a person

referred to in the said provision.

(2) Remuneration derived by a person referred to in paragraph (1) from the

company in respect of the discharge of day-to-day functions of a managerial or technical

nature and remuneration received by a resident of a Contracting State in respect of his

personal activity as a partner of a company, other than a company with share capital,

which is a resident of the other Contracting State, may be taxed in accordance with the

provisions of Article 15, as if the remuneration were remuneration of an employee in

respect of an employment and as if references to the employer were references to the

company.”

Article IV

The text of Article 18 of the Agreement shall be deleted and replaced by the

following >

“(1) Subject to the provisions of paragraph (2) of Article 19, 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.

(2) However, pensions and other allowances, periodic or non periodic, paid

under the social security legislation of a Contracting State or under a public scheme

organised by a Contracting State in order to supplement the benefits of that legislation

shall be taxed in that State.”

Article V

Subparagraphs (a), (b) and (c) of paragraph (1) of Article 23 of the Agreement

shall be deleted and replaced by the following>

“(a) Where a resident of Belgium derives income or owns items of capital which

may be taxed in Malta in accordance with the provisions of this Agreement, other than

those of subparagraph (b) of paragraph (2) of Article 10, of paragraphs (2) and (7) of

Article 11 and of paragraphs (2) and (5) of Article 12, Belgium shall exempt such

income or such items of capital from tax but may, in calculating the amount of tax on

the remaining income or capital of that resident, apply the rate of tax which would

have been applicable if such income or items of capital had not been exempted.

(b) (i) Subject to the provisions of the Belgian law regarding the allowance as

a credit against Belgian tax of taxes paid abroad, when a resident of Belgium derives

items of his aggregate income for Belgian tax purposes which are dividends taxable in

accordance with paragraph (2) (b) of Article 10, not exempt from Belgian tax in

accordance with subparagraph (c) hereof, or interest taxable in accordance with

paragraphs (2) or (7) of Article 11, or royalties taxable in accordance with paragraphs

(2) or (5) of Article 12, the Malta tax levied on that income shall be allowed as a credit

against Belgian tax relating to such income.

(ii) Belgium shall also allow the credit provided for in (i) of this subparagraph

in respect of tax chargeable on dividends or interest derived from direct investment

which are taxable in Malta by virtue of the Agreement and the general law of Malta

where such tax is temporarily remitted or reduced under special provisions designed to

promote the economic development of Malta.

Such credit shall apply for the first five years for which the Supplementary

Agreement is effective< however the competent authorities of the Contracting States

may consult each other to determine whether this period of time shall be extended or

not.

The term “dividends or interest derived from direct investment” means dividends

paid in respect of shares or interest paid in respect of debt-claims which are directly

and durably connected with industrial or commercial development projects in Malta.

(c) Where a company which is a resident of Belgium owns shares in a company

which is a resident of Malta, dividends which are paid to it by the latter company and

which may be taxed in Malta in accordance with subparagraph (b) of paragraph (2) of

Article 10, shall be exempt from the corporate income tax in Belgium under the

conditions and within the limits provided for in Belgian law.”

Article VI

Paragraph (2) of the Protocol is deleted. Consequently the numbering of

paragraph (1) has to be eliminated.

Article VII

(1) This Supplementary Agreement shall be ratified and the instruments of

ratification shall be exchanged at Brussels as soon as possible.

(2) The Supplementary Agreement shall enter into force 30 days after the date

of exchange of instruments of ratification, and its provisions shall have effect>

(a)

In Belgium>

(i) with respect to taxes due at source on income credited or payable

on or after the 1st of January 1993 <

(ii) with respect to taxes other than taxes due at source, on income of

any taxable period ending on or after the 31st day of December 1992.

(b) In Malta, with respect to taxes which are levied for any year of

assessment beginning on or after the 1st day of January 1993.

Article VIII

This Supplementary Agreement, which shall form an integral part of the Agreement

and the Protocol, shall remain in force as long as the Agreement and the Protocol

remain in force.

IN WITNESS WHEREOF, the undersigned, being duly authorised thereto by

their respective Governments, have signed this Supplementary Agreement.

DONE at Brussels, this twenty third day of June 1993, in duplicate in the English

language.

FOR THE GOVERNMENT

FOR THE GOVERNMENT

OF THE STATE OF MALTA

OF THE KINGDOM OF BELGIUM

Guido de MARCO

Willy CLAES

Minister of Foreign Affairs

Minister of Foreign Affairs

Mitbug[ fl-Istamperija tal-Gvern – Printed at the Government Printing Press