S.L. 123.5 ст. 2Arrangements to have effect.

It is hereby declared -

(a) that the arrangements specified in the Agreement set out 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 and preventing fiscal evasion in relation to the following taxes imposed by the laws of the Kingdom of Belgium:

(i) individual income tax;

(ii) corporate income tax;

(iii) income tax on legal entities;

(iv) income tax on non-residents; including the prepayments, the surcharges on these taxes and prepayments, and the communal supplement to the individual income tax; and

(b) that it is expedient that those arrangements should have effect.

*Came into force by Legal Notice 60 of 2020. SCHEDULE

AGREEMENT BETWEEN THE STATE OF MALTA AND THE KINGDOM OF BELGIUM FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION

Government of the State of Malta and the Government of the Kingdom of desiring to conclude an Agreement for the avoidance of double taxation prevention of fiscal evasion, have agreed as follows:

I. Scope of the Agreement

ARTICLE 1

Personal scope Agreement shall apply to persons who are residents of one or both of the States.

ARTICLE 2

Taxes covered Agreement shall apply to taxes on income and on capital imposed on Contracting State or its political subdivisions or local authorities, the manner in which they are levied. existing taxes to which this Agreement shall apply are in particular: on on total capital, or on elements of income or of capital, including taxes the alienation of movable or immovable property, taxes on the total wages and salaries paid by enterprises, as well as taxes an capital existing taxes to which this Agreement shall apply are in particular: 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") Malta: the income tax, including prepayments of tax whether made by deduction at source or otherwise, (hereinafter referred to as "Malta tax").

(4) This Agreement shall also apply to any identical or substantially taxes which are imposed after the date of signature of this Agreement or in place of, the existing taxes. The competent authorities of the Contracting shall notify to each other any changes which have been made in their taxation laws.

(5) Where the Agreement provides that income arising in a Contracting shall be relieved from tax in that State, either in full or in part, and, under force in the other Contracting State, such income is subject to tax by reference amount thereof which is remitted to or received in that other State reference to the full amount thereof, then the relief to be allowed mentioned State shall apply only to so much of the income as is received in the other State.

II. Definitions

ARTICLE 3

General definitions

(1) In this Agreement, unless the context otherwise requires:

(a) the term "Belgium", when used in a geographical sense, means of Belgium, including the territorial waters thereof, and any area territorial sea of Belgium which, in accordance with international law, may hereafter be designated, under the laws of Belgium concerning shelf, as an area within which the rights of Belgium with respect to the subsoil and their natural resources may be exercised;

(b) the term "Malta", when used in a geographical sense, means Malta, the Island of Gozo and the other islands of the Maltese archipelago, the territorial waters thereof, and any area outside the territorial sea of in accordance with international law, has been or may hereafter be designated, the laws of Malta concerning the continental shelf, as an area within which of Malta with respect to the sea-bed and subsoil and their natural resources exercised;

(c) the terms "a Contracting State" and "the other Contracting Belgium or Malta as the context requires;

(d) the term "person" comprises an individual, a company and any persons;

(e) the term "company" means any body corporate or any entity which as a body corporate for tax purposes;

(f) the terms "enterprise of a Contracting State" and "enterprise Contracting State" mean, respectively, an enterprise carried on by Contracting State and an enterprise carried on by a resident of the other State;

(g) the term "national" means:

(i) in respect of Belgium any individual possessing the Belgium and any legal person, partnership and association status as such from the law in force in Belgium;

(ii) in respect of Malta, any citizen of Malta as provided for of the Constitution of Malta and in the Maltese Citizenship legal person, partnership and association deriving its status as such from the law in force in Malta; term "international traffic" means any transport by a ship or aircraft an enterprise which has its place of effective management in a State, except when the ship or aircraft is operated solely between places Contracting State;

term "competent authority" means: the case of Belgium, the Minister responsible for finance or his authorised representative; the case of Malta, the Minister responsible for finance or his authorised representative.

application of this Agreement by a Contracting State, any term not defined shall, unless the context otherwise requires, have the meaning under the law of that Contracting State relating to the taxes which are this Agreement.

ARTICLE 4

Fiscal Domicile the purposes of this Agreement, the term "resident of a Contracting any person, whose income is subject to tax in that State, by reason of residence, place of management or any other criterion of a similar does not include any person who is liable to tax in that Contracting State of income from sources therein or capital situated in that State. by reason of the provisions of paragraph (1) an individual is a both Contracting States, then his case shall be determined in accordance following rules: shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closest (centre of vital interests). the Contracting State in which he has his centre of vital interests cannot be determined, or if he has no permanent home available to him, either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode. he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national. he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question mutual agreement.

by reason of the provisions of paragraph (1) a person other than an a resident of both Contracting States, then it shall be deemed to be a Contracting State in which its place of effective management is

ARTICLE 5

Permanent establishment

(1) For the purposes of this Agreement the term "permanent means a fixed place of business in which the business of the enterprise partly carried on.

(2) The term "permanent establishment" shall include especially:

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, quarry or other place of extraction of natural resources;

(g) a building site or construction or assembly project which than twelve months.

(3) The term "permanent establishment" shall not be deemed to include:

(a) the use of facilities solely for the purpose of storage, display of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging enterprise solely for the purpose of processing by another

(d) the maintenance of a fixed place of business solely for purchasing goods or merchandise, or for collecting information, enterprise;

(e) the maintenance of a fixed place of business solely for advertising, for the supply of information, for scientific similar activities which have a preparatory or auxiliary the enterprise.

(4) A person acting in a Contracting State on behalf of an enterprise Contracting State - other than an agent of an independent status to whom

(5) applies - shall be deemed to be a permanent establishment in the State if he has, and habitually exercises in that State, an authority contracts in the name of the enterprise, unless his activities are purchase of goods or merchandise for the enterprise.

(5) An enterprise of a Contracting State shall not be deemed permanent establishment in the other Contracting State merely because business in that other State through a broker, general commission agent agent of an independent status, where such persons are acting in the ordinary of their business.

(6) The fact that a company which is a resident of a Contracting or is controlled by a company, which is a resident of the other Contracting which carries on business in that other State (whether through establishment or otherwise), shall not of itself make either company establishment of the other. III. Taxation of Income

ARTICLE 6

Income from immovable property Income from immovable property may be taxed in the Contracting State in property is situated. term "immovable property" shall be defined in accordance with the law Contracting State in which the property in question is situated. The term shall include property accessory to immovable property, rights to which the general law respecting immovable property apply, usufruct of property and rights to variable or fixed payments as consideration for the or the right to work, mineral deposits, sources and other natural ships, boats and aircraft shall not be regarded as immovable property. provisions of paragraph (1) shall apply to income derived from the letting, or use in any other form of immovable property. provisions of paragraphs (1) and (3) shall also apply to the income from property of an enterprise and to income from immovable property used performance of professional services.

ARTICLE 7

Business profits profits of an enterprise of a Contracting State shall be taxable only in unless the enterprise carries on business in the other Contracting State permanent establishment situated therein. If the enterprise carries on aforesaid, the profits of the enterprise may be taxed in the other State but of them as is attributable to that permanent establishment. Subject to the provisions of paragraph (3), where an enterprise of a State carries on business in the other Contracting State through a establishment situated therein, there shall in each Contracting State be that permanent establishment the profits which it might be expected to were a distinct and separate enterprise engaged in the same or similar the same or similar conditions and dealing wholly independently with of which it is a permanent establishment.

determination of the profits of a permanent establishment, there shall as deductions expenses which are incurred for the purpose of the establishment including executive and general administrative expenses so whether in the State in which the permanent establishment is situated or far as it has been customary in a Contracting State to determine the attributed to a permanent establishment on the basis of an of the total profits of the enterprise to its various parts, nothing in shall preclude that Contracting State from determining the profits to be apportionment as may be customary. The method of apportionment however, be such that the result shall be in accordance with the down in this Article. profits shall be attributed to a permanent establishment by reason of the by that permanent establishment of goods or merchandise for the the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment, shall be determined by the same method year unless there is good and sufficient reason to the contrary.

(7) Where profits include items of income which are dealt with other Articles of this Agreement, then the provisions of these Articles affected by the provisions of this Article.

ARTICLE 8

Shipping and air transport

(1) Profits from the operation of ships or aircraft in international taxable only in the Contracting State in which the place of effective the enterprise is situated.

(2) If the place of effective management of a shipping enterprise ship, then it shall be decided to be situated in the Contracting State home harbour of the ship is situated, or, if there is no such home Contracting State of which the operator of the ship is a resident.

(3) The provisions of paragraph (1) shall also apply to profits derived participation in a pool, a joint business or in an international operating

ARTICLE 9

Associated enterprises Where -

(a) an enterprise of a Contracting State participates directly the arrangement, control or capital of an enterprise Contracting State, or

(b) the same persons participate directly or indirectly in the control or capital of an enterprise of a Contracting enterprise of the other Contracting State, and in either case conditions are made or imposed between the two their commercial or financial relations which differ from those which between independent enterprises, then any profits which would, conditions, have accrued to one of the enterprises, but by reason of those have not so accrued, may be included in the profits of that enterprise accordingly.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of a Contracting resident of the other Contracting State may be taxed in that other State.

(2) However such dividends may be taxed in the Contracting State company paying the dividends is a resident and according to the law but -

(a) where dividends are paid by a company resident of resident of Malta who is the beneficial owner thereof, the shall not exceed 15 per cent of the gross amount of the provision shall not affect the taxation of the Belgian company of the profits out of which the dividends are paid; where dividends are paid by a company resident of Malta to a resident Belgium who is the beneficial owner thereof -

(i) Malta tax shall not exceed that chargeable on the company paying the dividends in respect of the profits so distributed;

(ii) notwithstanding the provisions of sub-paragraph (i) hereof, Malta tax shall not exceed 15 per cent of the dividends if such dividends are paid out of gains or profits earned in any year in respect of which the company is in receipt of any benefit under the provisions regulating aids to industries in Malta, and the shareholder submits returns and accounts to the taxation authorities of Malta in respect of his income liable to Malta tax for the relative year of assessment. term "dividends" as used in this Article means income from shares, shares or "jouissance" rights, mining shares, founders shares or other being debt-claims, participating in profits, as well as income from other rights which is subjected to the same taxation treatment as income from taxation treatment as income from shares by the taxation law of the the Company making the distribution is a resident. This term means even when paid in the form of interest, which is taxable under the head capital invested by the members of a company other than a company capital, which is a resident of Belgium.

provisions of paragraphs (1) and (2) shall not apply if the recipient of being a resident of a Contracting State, carries on business in the other State, of which the company paying the dividends is a resident through a establishment situated therein or performs in that other State professional a fixed base situated therein and the holding in respect of which the paid is effectively connected with such permanent establishment or In such case, the dividends may be taxed by that other State in with its law.

a company which is a resident of one of the Contracting States or income from the other Contracting State, that other State may not tax on the dividends paid by the company to residents of the first State, or subject the company’s undistributed profits to a tax on profits even if the dividends paid or the undistributed profits consist partly of profits or income arising in that other State; this provision shall that other State from taxing dividends relating to a holding which is connected with a permanent establishment maintained in that other State of the first-mentioned State.

ARTICLE 11

Interest Interest arising in a Contracting State and paid to a resident of the other State may be taxed in that other State.

However, such interest may also be taxed in the Contracting State in which according to the law of that State, but if the recipient is the beneficial interest, the tax so charged shall not exceed 10 per cent of the amount

Notwithstanding the provisions of paragraph (2) -interest arising in Belgium and paid to the State of Malta, the Central Bank of Malta or any other institution the capital of which owned by the State of Malta shall be exempt from Belgian

(b) interest arising in Malta and paid to the Kingdom of National Bank of Belgium or any other institution the capital is wholly owned by the Kingdom of Belgium shall be Malta tax;

(c) interest on commercial debt-claims - including debt-claims by negotiable instruments - resulting from deferred payments merchandise or services supplied by an enterprise of a Contracting shall be exempt from tax in the other Contracting State.

(4) The term "interest" as used in this Article means income from every kind, whether or not secured by mortgage and whether or not carrying to participate in the debtor’s profits, and, in particular, income from securities and income from bonds or debentures, including premiums attaching to bonds or debentures, as well as income assimilated to same way as income from money lent by the taxation law of the State income arises. However, the term "interest" does not include for the Article, penalty charges far late payment nor interest treated as dividends paragraph (3) of Article 10.

(5) The provisions of paragraphs (1) and (2) shall not apply if the the interest, being a resident of a Contracting State, carries on business Contracting State in which the interest arises through a permanent situated therein or performs in that other State professional services base situated therein and the debt-claim in respect of which the interest effectively connected with such permanent establishment or fixed case, the provisions of Article 7 or Article 14 of this Agreement, as the shall apply.

(6) Interest shall be deemed to arise in a Contracting State when that State, itself, a political subdivision, a local authority or a resident Where, however, the person paying the interest whether he is a Contracting State or not, has in a Contracting State a permanent establishment connection with which the indebtedness of which the interest is paid and such interest is borne by such permanent establishment, then such be deemed to arise in the Contracting State in which the permanent establishment situated.

(7) Where, owing to a special relationship between the payer and or between both of them and some other person, the amount of the having regard to the debt-claim for which it is paid, exceeds the would have been agreed upon by the payer and the recipient in the absence relationship, the provisions of this Article shall apply only to the amount. In that case, the excess part of the payments shall remain taxable to the law of each Contracting State, due regard being had to the other this Agreement.

ARTICLE 12

Royalties

(1) Royalties arising in a Contracting State and paid to a resident Contracting State shall be taxable only in that other State if such beneficial owner of the royalties and the royalties consist of payments received as a consideration for the use of, or the right to use, any artistic or scientific work, including cinematographic films or tapes for broadcasting. Royalties arising in a Contracting State and paid to a resident of the other State may be taxed in that other Contracting State if the royalties consist of any kind received as a consideration for the use of, or the right to use, trade mark, design, model, plan, secret formula or process, industrial, or scientific equipment, or information concerning industrial, scientific experience. However, such royalties may also be taxed in State in which they arise, and according to the law of that State, but is the beneficial owner of the royalties, the tax so charged shall not cent of the gross amount of such royalties. provisions of paragraphs (1) and (2) of this Article shall not apply if the royalties, being a resident of a Contracting State, carries on business Contracting State in which the royalties arise through a permanent situated therein, or performs in that other State professional services base situated therein, and the right or property in respect of which the paid is effectively connected with such permanent establishment or In such a case, the provisions of Article 7 or Article 14 of this the case may be, shall apply. Royalties shall be deemed to arise in a Contracting State when the payer is itself, a political subdivision, a local authority or a resident of that State. however, the person paying the royalties, whether he is a resident of a State or not, has in a Contracting State a permanent establishment in with which the contract under which the royalties are paid was such royalties are borne by such permanent establishment, then such be deemed to arise in the Contracting State in which the permanent is situated. owing to a special relationship between the payer and the recipient, both of them and some other person, the amount of the royalties paid to the use, right or information for which they are paid exceeds the would have been agreed upon by the payer and the recipient in the such relationship, the provisions of this Article shall apply only to the amount. In that case, the excess paid of the payments shall remain according to the law of each Contracting State, due regard being had to the provisions of this Agreement.

ARTICLE 13

Capital gains from the alienation of immovable property, as defined in paragraph 6, may be taxed in the Contracting State in which such property is from the alienation of movable property forming part of the business permanent establishment which an enterprise of a Contracting State has Contracting State or of movable property pertaining to a fixed base a resident of a Contracting State in the other Contracting State for the performing professional services, including such gains from the such a permanent establishment (alone or together with the whole of such a fixed base, may be taxed in the other State. However, gains alienation of moveable property of the kind referred to in paragraph (3) of shall be taxable only in the Contracting State in which such movable property is taxable according to the said Article.

(3) Gains from the alienation of any property other than those paragraphs (1) and (2) shall be taxable only in the Contracting State alienator is a resident.

ARTICLE 14

Independent personal services

(l) Income derived by a resident of a Contracting State professional services or other independent activities of a similar character taxable only in that State unless he has a fixed base regularly available other Contracting State for the purpose of performing his activities. If fixed base, the income may be taxed in the other Contracting State but of it as is attributable to that fixed base.

(2) The term "professional services" includes, especially, scientific, literary, artistic, educational or teaching activities independent activities of physicians, lawyers, engineers, architects, accountants.

ARTICLE 15

Dependent personal services

(1) Subject to the provisions of Articles 13, 18, 19 and 20, salaries, other similar remuneration derived by a resident of a Contracting State an employment shall be taxable only in that State unless the employment in the other Contracting State. If the employment is so exercised, such as is derived therefrom may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration resident of a Contracting State in respect of an employment exercised Contracting State shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other State for a period exceeding in the aggregate 183 days in the calendar year

(b) the remuneration is paid by, or on behalf of, an employer resident of the other State, and

(c) the remuneration is not borne by a permanent establishment base which the employer has in the other State.

(3) Notwithstanding the preceding provisions of this Article, remuneration respect of an employment exercised aboard a ship or aircraft in international may be taxed in the Contracting State in which the place of effective the enterprise is situated.

ARTICLE 16

Company Managers

(1) Directors’ fees and other similar payments derived by a contracting State in his capacity as a member of the board of directors organ of a company which is a resident of the other Contracting State in that other State. This provision shall also apply to payment derived in discharge of functions which, under the law of the Contracting State a resident, are regarded as functions of a similar nature as those a person referred to in the said provision. Remuneration derived by a person referred to in paragraph (1) from the respect of the discharge of day-to-day functions of a managerial or nature and remuneration received by a resident of a Contracting State in personal activity as a partner of a company, other than a company with which is a resident of the other Contracting State, may be taxed in with the provisions of Article 15, as if the remuneration were of an employee in respect of an employment and as if references to the references to the company.

ARTICLE 17

Artistes and athletes Notwithstanding the provisions of Articles 14 and 15, income derived by entertainers, such as theatre, motion picture, radio or television artistes, and by athletes, from their personal activities as such may be taxed in the State in which these activities are exercised. income in respect of personal activities as such of an entertainer or not to that entertainer or athlete himself but to another person, that notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the State in which the activities of the entertainer or athlete are exercised.

ARTICLE 18

Pensions Subject to the provisions of paragraph (2) of Article 19, pensions and other remuneration paid to a resident of a Contracting State in consideration of employment shall be taxable only in that State. However, pensions and other allowances, periodic or non periodic, paid social security legislation of a Contracting State or under a public scheme a Contracting State in order to supplement the benefits of that shall be taxed in that State.

ARTICLE 19

Government Service Remuneration, other than a pension, paid by a Contracting State or a subdivision or a local authority thereof to any individual in respect of rendered in that State or subdivision or local authority thereof shall be in that State. However, such remuneration shall be taxable only in the other Contracting services are rendered in that State and the recipient is a resident of that Contracting State who: a national of that State; or did not become a resident of that State solely for the purpose of performing the services. Any pension paid by, or out of funds created by a Contracting State or subdivision or a local authority thereof to any individual in respect of rendered to that State or subdivision or local authority thereof shall be taxable only in that State.

(b) However, such pension shall be taxable only in the other State if the recipient is a national of and a resident of that State.

(3) The provisions of paragraph (1) shall likewise apply remuneration paid under a development assistance programme of State, a political subdivision or a local authority thereof, out of funds supplied by that State, those political subdivisions or local authorities specialist or volunteer seconded to the other Contracting State with that other State.

(4) The provisions of Articles 15, 16 and 18 shall apply to remuneration pensions in respect of services rendered in connection with any business by a Contracting State or a political subdivision or a local authority thereof.

ARTICLE 20

Teachers, students and trainees

(1) Remuneration which a professor or teacher who is, or immediately was, a resident of a Contracting State and who visits the other Contracting period not exceeding two years for the purpose of carrying out advanced research or for teaching at a university or any other recognized institution receives for such work shall not be taxed in that other State.

(2) An individual who was a resident of a Contracting State immediately visiting the other Contracting State and is temporarily present in that solely as a student at a university or any other recognized educational that other State or as a business apprentice shall, from the date of his that other State in connection with that visit, be exempt from tax in that

(a) on all remittances from abroad for purposes of his education or training; and

(b) for a period not exceeding in the aggregate four remuneration not exceeding 120,000 Belgian Francs or the Malta currency, for each calendar year for personal services that other Contracting State with a view to supplementing available to him for such purposes.

(3) An individual who was a resident of a Contracting State immediately visiting the other Contracting State and is temporarily present in that solely for the purpose of study, research or training as a recipient allowance or award from a scientific, educational, religious organisation or under a technical assistance programme entered Government of a Contracting State shall, from the date of his first other State in connection with that visit, be exempt from tax in that other

(a) on the amount of such grant, allowance or award: and

(b) on all remittances from abroad for the purposes of his education or training.

ARTICLE 21

Other income

(1) Items of income of a resident of a Contracting State, wherever dealt with in the foregoing Articles of this Agreement shall be taxable State. provisions of paragraph (1) shall not apply if the recipient of the a resident of a Contracting State, carries on business in the other State through a permanent establishment situated therein, or performs in professional services from a fixed base situated therein, and the right respect of which the income is paid is effectively connected with such establishment or fixed base. In such a case, the provisions of Article 7 or the case may be, shall apply.

IV. Taxation of Capital

ARTICLE 22

represented by immovable property, as defined in paragraph (2) of be taxed in the Contracting State in which such property is situated. represented by movable property forming part of the business permanent establishment of an enterprise, or by moveable property a fixed base used for the performance of professional services, may be Contracting State in which the permanent establishment or fixed base is and aircraft operated in international traffic, and movable property the operation of such ships and aircraft, shall be taxable only in the State in which the place of effective management of the enterprise is other elements of capital of a resident of a Contracting State shall be in that State.

V. Elimination of Double Taxation

ARTICLE 23

case of Belgium, double taxation shall be avoided as follows: 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 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. Subject to the provisions of the Belgian law regarding the allowance 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 derived from direct investment which are taxable in Malta the Agreement and the general law of Malta where temporarily remitted or reduced under special provisions promote the economic development of Malta. Such credit shall apply for the first five years for Supplementary Agreement is effective; however the authorities of the Contracting States may consult determine whether this period of time shall be extended or The term ''dividends or interest derived from direct investment'' dividends paid in respect of shares or interest paid in respect claims which are directly and durably connected with commercial development projects in Malta..

(c) Where a company which is a resident of Belgium owns company which is a resident of Malta, dividends which are the latter company and which may be taxed in Malta in accordance subparagraph (b) of paragraph (2) of Article 10, shall be the corporate income tax in Belgium under the conditions limits provided for in Belgian law.

(d) When, in accordance with Belgian law, losses of a Belgian attributable to a permanent establishment situated in Malta effectively deducted from the profits of that enterprise for Belgium, the exemption provided in sub-paragraph (a) shall Belgium to the profits of other taxable periods attributable establishment to the extent that those profits have also from tax by Malta by reason of compensation for the said

(2) In the case of Malta, double taxation shall be avoided as follows: Subject to the provisions of the law of Malta regarding the allowance against Malta tax in respect of foreign tax, where, in accordance with of this Agreement, there is included in a Malta assessment income within Belgium or elements of capital situated in Belgium, the Belgian income or elements of capital shall be allowed as a credit against Malta thereon.

VI. Special Provisions

ARTICLE 24

Non-discrimination

(1) Notwithstanding the provisions of Article 1, the nationals of State, whether or not they are residents of one of the Contracting States, subjected in the other Contracting State to any taxation or any connected therewith which is other or more burdensome than the connected requirements to which nationals of that other State circumstances are or may be subjected.

(2) The taxation on a permanent establishment which an enterprise Contracting State has in the other Contracting State shall not be less levied in that other State than the taxation levied on enterprises of that carrying on the same activities. This provision shall not be construed as obliging a Contracting State residents of the other Contracting State any personal allowances, taxation purposes on account of civil status or family responsibilities to its own residents. where the provisions of Article 9, or paragraph (7) of Article 11, or of Article 12 apply, interest, royalties and other disbursements paid by of a Contracting State to a resident of the other Contracting State shall, of determining the taxable profits of such enterprise, be deductible same conditions as if they had been paid to a resident of the first-State. Similarly, any debts of an enterprise of a Contracting State to a other Contracting State shall, for the purpose of determining the of such enterprise, be deductible as if they had been contracted to a first-mentioned State. Enterprises of a Contracting State, the capital of which is wholly or partly controlled, directly or indirectly, by one or more residents of the other State, shall not be subjected in the first-mentioned Contracting State to or any requirement connected therewith which is other or more than the taxation and connected requirements to which other similar that first-mentioned State are or may be subjected

Nothing in this Article shall be construed as preventing Belgium: from taxing the total amount of the profits attributable to a permanent establishment in Belgium of a company being a resident of Malta or of association having its place of effective management in Malta at the rate of tax provided by the Belgian law, but this rate may not exceed the maximum rate applicable to the whole or a portion of the profits of companies which are residents of Belgium; from imposing the movable property prepayment on dividends derived from a holding which is effectively connected with a permanent establishment or a fixed base maintained in Belgium by a company which is a resident of Malta or by an association which has its place of effective management in Malta and is taxable as a body corporate in Belgium. Article the term ''taxation'' means taxes of every kind and description.

ARTICLE 25

Mutual agreement procedure a resident of a Contracting State considers that the actions of one or Contracting States result or will result for him in taxation not in with this Agreement, he may, saving the remedies provided by the of those States, present his case to the competent authority of the State of which he is a resident. This case must be presented within three first notification of the action which gives rise to taxation not in with the Agreement. competent authority shall endeavour, if the objection appears to it to be if it is not itself able to arrive at an appropriate solution, to resolve the mutual agreement with the competent authority of the other Contracting a view to the avoidance of taxation not in accordance with the competent authorities of the Contracting States shall endeavour to mutual agreement any difficulties or doubts arising as to the application Agreement.

(4) The competent authorities of the Contracting States shall administrative measures necessary to carry out the provisions of the particularly on the proofs to be furnished by residents of either Contracting order to benefit in the other Contracting State from the exemptions provided for in the Agreement.

(5) The competent authorities of the Contracting States shall directly with each other for the application of the Agreement.

ARTICLE 26

Exchange of information

(1) The competent authorities of the Contracting States shall information as is foreseeably relevant for carrying out the provisions Agreement or to the administration or enforcement of the domestic laws taxes of every kind and description imposed by or on behalf of the States, insofar as the taxation thereunder is not contrary to the Agreement. exchange of information is not restricted by Articles 1 and 2.

(2) Any information received under paragraph 1 by a Contracting treated as secret in the same manner as information obtained under the of that State and shall be disclosed only to persons or authorities (including and administrative bodies) concerned with the assessment or collection enforcement or prosecution in respect of, the determination of appeals the taxes referred to in paragraph 1, or the oversight of the above. Such authorities shall use the information only for such purposes. They may information in public court proceedings or in judicial decisions. Notwithstanding foregoing, information received by a Contracting State may be purposes when such information may be used for such other purposes of both States and the competent authority of the supplying State authorises use.

(3) In no case shall the provisions of paragraphs 1 and 2 be construed impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with administrative practice of that or of the other Contracting

(b) to supply information which is not obtainable under the normal course of the administration of that or of the other State;

(c) to supply information which would disclose any trade, industrial, commercial or professional secret or trade information, the disclosure of which would be contrary to (ordre public).

(4) If information is requested by a Contracting State in accordance provisions of this Article, the other Contracting State shall use its gathering measures to obtain the requested information, even though may not need such information for its own tax purposes. The obligation the preceding sentence is subject to the limitations of paragraph 3 of in no case shall such limitations be construed to permit a Contracting to supply information solely because it has no domestic interest in such

(5) In no case shall the provisions of paragraph 3 of this Article permit a Contracting State to decline to supply information solely information is held by a bank, other financial institution, trust, foundation, in an agency or a fiduciary capacity or because it relates to ownership person. In order to obtain such information the tax administration of the Contracting State shall have the power to ask for the disclosure of information investigations and hearings notwithstanding any contrary provisions in its laws.ARTICLE 27

Diplomatic and Consular Officials Nothing in this Agreement shall affect diplomatic or consular privileges general rules of international law or under the provisions of special the purposes of this Agreement, persons who are members of a consular mission of a Contracting State in the other Contracting State State and who are nationals of the sending State, shall be deemed to be sending State if they are subjected therein to the same obligations in taxes on income and capital as are residents of that State.

VII. Final Provisions

ARTICLE 28

Entry into force Agreement shall be ratified and the instruments of ratification shall be Brussels as soon as possible. Agreement shall enter into force 30 days after the date of exchange of ratification, and its provisions shall have effect -Belgium:

(i) in respect of taxes due at source on income credited or payable on or after the first day of January in the calendar year immediately following that in which the instruments of ratification have been exchanged;

(ii) in respect of taxes other than taxes due at source, on income of any accounting period ending on or after the 31st day of December in the calendar year in which the instruments of ratification have been exchanged; Malta: in respect of taxes which are levied for any year of assessment beginning on or after the first day of January in the calendar year immediately following that in which the instruments of ratification have been exchanged.

ARTICLE 29

Termination Agreement shall remain in force indefinitely but either of the Contracting or before the thirteenth day of June in any calendar year from the following that in which the instruments of ratification have been give to the other Contracting State, through diplomatic channels, written termination and, in such event, the Agreement shall cease to have effect -Belgium:

(i) in respect of taxes due at source on income credited or payable after the 31st day of December of the calendar year in which the notice of termination is given;

(ii) in respect of taxes other than taxes due at source, any accounting period ending after the 30th day of the calendar year in which the notice of termination

(b) in Malta: in respect of texes which are levied for the year beginning on the first day of January of the calendar year following that in which the notice of termination is subsequent years of assessment.

IN WITNESS WHEREOF the undersigned, being duly authorised respective Governments, have signed this Agreement.

DONE at Brussels this 28th day of June, 1974, in duplicate language.

For the Government of For the Government The Kingdom of Belgium The State of Malta

R. VAN ELSLANDE J. ATTARD KINGSWELL

PROTOCOL

At the signing of the Agreement between the Kingdom of Belgium and Malta for the Avoidance of Double Taxation and the Prevention of Fiscal the undersigned have agreed that the following provisions shall form of the Agreement:

Notwithstanding the provisions of Article 8 of the Agreement, profits operation of a ship in international traffic derived by a company which of Malta having more than 25 per cent of its capital owned, directly or persons not residents of Malta, may be taxed in Belgium unless the company that the profits derived from the operation of such ship are subject without regard to any relief therefrom as provided for in article 88 of Shipping Act, or in any identical or similar provision.

DONE at Brussels this 28th day of June, 1974, in duplicate language.

For the Government of For the Government The Kingdom of Belgium The State of Malta

R. VAN ELSLANDE J. ATTARD KINGSWELL