Bulgaria – Belgium

Provisions for the Elimination of Double Taxation

Art. 23

1. As far as Belgium is concerned, double taxation shall be avoided as follows:

1. where a resident of Belgium derives income or owns elements of capital, other than those referred to in paragraph 2 of Art. 10, paragraph 2 of Art. 12 and paragraphs 2 and 4 of Art. 12, which, in accordance with the provisions of this Convention may be taxed in Bulgaria, Belgium shall exempt such income or such elements of capital from tax, but may nevertheless, in calculating the tax on the remaining income or capital of that resident, apply the rate which would have been applicable if the income or capital in question was not so exempted;
2. where a resident of Belgium derives elements of income included in the global income subjected to Belgian tax and representing dividends taxable in accordance with paragraph 2 of Art. 10, interest taxable in accordance with paragraph 2 of Art. 11 or royalties taxable in accordance with paragraphs 2 and 4 of Art. 12, the overall amount of the foreign tax, under the conditions and at a rate provided for in the Belgian legislation, is credited against the Belgian tax with respect of such income.
3. where, in accordance with the Belgian legislation, losses incurred for a Belgian resident with respect of a permanent establishment situated in Bulgaria have been effectively compensated against profit of that resident with respect of its taxation in Belgium, the exemption provided for in subparagraph (a) shall not apply in Belgium with regards to profits derived in other taxable periods, attributable to that permanent establishment, provided that such profits has been also exempted from tax in Bulgaria by reason of compensation of the said losses.

2. As far as Bulgaria is concerned, the double taxation will be avoided in the following manner:

1. where a resident of Bulgaria derives income or owns capital which, in accordance with the provisions of this Convention may be taxed in Belgium, Bulgaria shall, subject to the provisions of subparagraphs (b) and (c), exempt such income or capital from tax;
2. where a resident of Bulgaria derives elements of income which, in conformity with the provisions of Art.s 10, 11 and 12 of this Convention may be taxed in Belgium, Bulgaria shall allow as a deduction from the tax computed on the income of that resident, an amount equal to the tax paid in Belgium. Such deduction shall not, however, exceed that part of the tax, computed before the deduction is given, which is appropriate to the elements of income derived in Belgium.
3. Where, in accordance with any provision of this Convention income derived or capital owned by Bulgarian residents is exempted from tax in Bulgaria, Bulgaria may nevertheless, in calculating the tax on the remaining income or capital of that resident, take into consideration the exempted income or capital.