Published online by Cambridge University Press: 05 November 2014
The relevance of the OECD and UN Model Conventions and their Commentaries for the interpretation of Belgian tax treaties
Introduction
Relatively few cases relating to cross-border situations are submitted to thecourts in Belgium. Being a small country with close neighbours, one may supposethat questions and difficulties are mostly resolved through negotiations withthe tax authorities.
Belgium has a large treaty network, which increases annually; the first doubletax agreement in the field of income taxes was signed in the 1930s. To date,Belgium has a treaty network covering almost ninety countries (not including theexchange of information agreements). Moreover, it has signed double taxconventions (not yet in force) with a dozen countries and has entered intonegotiations with around thirty.
The power to conclude (tax) treaties belongs to the king, while according to theprinciple of legality, the tax law has to be decided by the Parliament. Treatiesmust be approved by the Parliament; however, it has no power of amendment of atreaty that has been negotiated and signed by the king; it could only refuse itsapproval, which is not sufficient to have a significant impact on the framing ofBelgium’s international tax policy.
Despite the minor role played by Parliament in this matter, there seems to be aconsensus on the general guidelines regarding the international tax policy ofBelgium when concluding treaties, amongst which is the need to increase theattractiveness of the country for foreign investors by eliminating tax obstaclesto cross-border entrepreneurship and to guarantee the competitiveness of Belgianenterprises investing abroad. Consequently, Belgium as a rule favours theexemption method for its capital export neutrality.
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