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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 23

Methods for Elimination of Double Taxation

(1) The laws in force in either of the Contracting States shall continue to govern the taxation of income or capital in the respective Contracting States except where provisions to the contrary are made in this Agreement.

(2) In the case of Belgium, double taxation shall be avoided as follows:

  • (a) Where a resident of Belgium derives income or owns elements of capital which are taxed in the United Arab Emirates in accordance with the provisions of the Agreement, other than those of paragraph (2) of Article 10, of paragraphs (2) and (7) of Article 11 and of paragraphs (2) and (7) of Article 12, Belgium shall exempt such income or such elements 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 elements of capital had not been exempted.
  • (b) Subject to the provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad, where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are dividends taxable in accordance with paragraph (2) of Article 10, and not exempt from Belgian tax according to sub-paragraph (c) hereinafter, interest taxable in accordance with paragraphs (2) or (7) of Article 11, or royalties taxable in accordance with paragraphs (2) or (7) of Article 12, the U.A.E. tax levied on that income shall be allowed as a credit against Belgian tax relating to such income.
  • (c) Dividends within the meaning of paragraph (5) of Article 10, derived by a company which is a resident of Belgium from a company which is a resident of the United Arab Emirates, shall be exempt from the corporate income tax in Belgium under the conditions and within the limits provided for in Belgian law.
  • (d) Where, in accordance with Belgian law, losses incurred by an enterprise carried on by a resident of Belgium in a permanent establishment situated in the United Arab Emirates have been effectively deducted from the profits of that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph (a) shall not apply in Belgium to the profits of other taxable periods attributable to that establishment to the extent that those profits have also been exempted from tax in the United Arab Emirates by reason of compensation for the said losses.

(3) In the case of the United Arab Emirates, double taxation shall be avoided as follows:

Where a resident of the United Arab Emirates derives income or owns capital which, in accordance with the provisions of the Agreement, may be taxed in Belgium, the United Arab Emirates shall allow:

  • (a) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Belgium;
  • (b) as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in Belgium. Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in Belgium.