Circular 2024/C/79 on the application of the so-called “Cayman” tax when the legal arrangement is located in a State with which Belgium has concluded a double taxation convention
- Articles 5/1 and 220/1, ITC 92 Explained: These articles allow Belgium to tax income from foreign legal arrangements in the hands of Belgian residents.
- Economic Double Taxation: The DTAs focus on legal double taxation, not economic double taxation, thus not conflicting with Articles 5/1 and 220/1.
- Substance Exclusion: Legal arrangements with substantial economic activities in DTA countries may be exempt from Belgian tax.
- Anti-Avoidance Measures: The MLI and DTAs include anti-abuse clauses to prevent tax avoidance, supporting the application of Articles 5/1 and 220/1.
- Safeguard Clauses: DTAs with safeguard clauses strengthen Belgium’s ability to tax its residents under Articles 5/1 and 220/1.
Source MyMinfin
