The new double tax treaty between China and Belgium has entered into force. It was concluded on 7 October 2009 and it entered into force retrospectively as of 29 December 2013. It replaces the double tax treaty of 18 April 1985. The new treaty applies to withholding taxes for income received as of 1 January 2014 and to all other income taxes in relation to income of taxable periods beginning on or after 1 January 2014.
The new treaty introduces changes to certain treaty provisions that already existed under the old treaty. From a personal income tax perspective, the following changes are the most important:
Employees
The reference period for calculating the 183 days’ presence in the work state has switched to “any twelve-month period commencing or ending in the fiscal year concerned”.
Company directors
The reference to the employment article for day to day management of a company has been removed.
Subject to tax
In order for Belgium to exempt the income taxable in China, the taxpayer will now have to prove that the income is taxed in China.
Communal taxes
Belgium will be authorised to levy communal (i.e. local) taxes on the exempted income.
