On 20 June 2014, Norway ratified the tax treaty with Belgium. As previously reported, the treaty was signed 23 April 2014, and once in force and effect will replace the 1988 tax treaty between the two counties as amended by the 2009 protocol.
The treaty applies to the following Norwegian taxes:
The treaty applies to the following Belgian taxes:
In general, a service PE will be deemed constituted when an enterprise from one Contracting State furnishes services in the other State through one or more individuals present in that other country for an aggregate period of 183 days or more in a 12 month period when for the same or connected project, or when 50% or more of the enterprise's gross revenue from business activities in such period(s) is derived from those services
Under the treaty, Norway uses the credit method to eliminate double taxation while Belgium generally uses the exemption method. However, Belgium applies the credit method when dividends, interest, and royalties are included in a Belgian resident's aggregate income and such income is subject to tax in Norway.
A protocol to the treaty, signed the same date as the treaty, includes a limitation on benefits provision whereby the benefits of the treaty will not be applicable for income paid or derived in connection with an artificial arrangement.
The treaty will enter into force once the ratification instruments are exchanged and apply from 1 January of the year following the date of its entry into force. The 1988 treaty and 2009 protocol will terminate and cease to be effective from the date the new treaty goes into effect.
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