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3.3. Potential Exclusion from Treaty Benefits for Failure to Meet Residence Test

In general tax treaties concluded by Belgium do not deviate from the wording of Art. 4(1) OECD MC, which means that the taxpayer needs to be “liable to tax” in Belgium in order to enjoy treaty protection. The treaty with Egypt deviates as it uses “subject to tax”, although it is not clear what the different wording exactly means. The treaties with Japan, India, Singapore, and Ireland define resident by referring to the residence for domestic taxes.

The expression “liable to tax” does not require effective taxation of the taxpayer’s worldwide income. Belgian pension funds and collective securities investment companies (SICAV and SICAF) fulfill this condition, as they are liable to tax on their worldwide income in Belgium and therefore enjoy treaty protection although the majority of their income is exempt in Belgium.