On 24 November 2017, Belgium published in the Official Gazette the Act of 30 June 2015 that authorizes the entry into force (effect) of the income tax treaty with Seychelles, as well as the amending protocol. The notes to the Act specify that the treaty entered into force on 10 September 2015 and the amending protocol entered into force on 22 June 2016. The treaty, signed 27 April 2006, is the first of its kind between the two countries.
The treaty covers Belgian individual income tax, corporate income tax, income tax on legal entities, income tax on nonresidents, and the supplementary crisis contribution. It covers Seychelles business tax.
The treaty includes the provision that a permanent establishment will be deemed constituted when an enterprise furnishes services within a Contracting State through employees or other engaged personnel for the same or connected project for a period or periods aggregating more than 6 months within any 12 month period.
Note - The final protocol to the treaty clarifies that consideration for technical assistance or technical services are not be considered to be payments for information concerning industrial, commercial, or scientific experience for the purpose of Article 12 (Royalties), but may be taxed in accordance with the provisions of Article 7 (Business Profits).
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State
Seychelles applies the credit method for the elimination of double taxation.
Belgium generally applies the exemption method. However, with respect to income covered by Article 7 (Business Profits), if the amount of Seychelles tax is less than 15% of the net amount of the income, Belgium will instead reduce to half the Belgian tax which is proportionally relating to that income, calculated as if that income was from Belgian sources.
For dividends, Belgium will apply the exemption method under the conditions and within the limits provided for in Belgian law. However, Belgium will apply the credit method if the dividends are included in a company's aggregate income for Belgian tax purposes and are not exempted under Belgian law.
For interest and royalties, Belgium generally applies the credit method, subject to the provisions of Belgian law.
Article 27 Limitation on Benefits provides that the benefits of the treaty will not apply for a resident of a Contracting State if the main purpose or one of the main purposes of such resident or connected person was to obtain the benefits of the treaty.
The amending protocol to the treaty, signed 14 July 2009, amends Article 24 (Exchange of Information).
The treaty, as amended by the protocol, applies from 1 January 2016.
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