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Belgium – Austria Double Tax Treaty

Belgium – Austria Double Tax Treaty

Belgium and Austria first signed a double taxation treaty in 1971. Recently, an amending protocol implementing the full OECD-standard regarding transparency and exchange of information has been signed but is not yet in force. Our attorneys in Belgium will be able to advise you on the latest position under the Belgium – Austria Double Tax Treaty.

Avoidance of Doubt Taxation on Income and Capital in Belgium and Austria

According to the Belgium – Austria Double Tax Treatydouble taxation can be avoided:

  • – concerning Belgium: individual and corporate income taxes, the corporate tax, income tax on non-residents;
  • – concerning  Austria : individual and corporate income taxes, wealth tax, the contribution from income for the promotion of residential building and for the purpose of equalization of family burden, tax payments to members of boards of directors, farm tax, land tax, tax on agricultural and forestry enterprises, tax on the value of undeveloped land and properties, inheritance tax,  contributions from agricultural and forestry enterprises to the equalization fund for family allowances, special income tax; special wealth tax, the contribution from income disaster fund, the contribution from fortune to disaster fund.

Our law firm in Belgium can help you on any tax issues in Belgium. 

Reduction of Withholding Tax in Belgium

The current withholding tax of 27% is applicable on dividends, interests and royalties distributed by a Belgian resident company to a nonresident, unless the rate is reduced under one of Belgium’s tax treaties.  According to the Belgium – Austria Double Tax Treaty, for dividends and interest paid to an Austrian company by a Belgian company, the withholding tax rate is reduced to 15% of the gross amount.  Regarding  royalties, the rate of withholding tax on Belgian sourced royalties is in general levied at 15%  on net amount.  In the case of copyright royalties, the withholding tax on earned income is levied in some cases and the rate of this withholding tax may vary depending on each case.  Our Belgian lawyers will be able to assist on any issues regarding withholding tax. 

Procedural Matters

To obtain benefits on tax levied by Belgian tax authorities under the treaty, a nonresident must demonstrate that it is resident in Austria, generally by providing an attestation of the Austrian tax authorities. 

To apply for a reduced treaty rate at source (more frequent in the case of royalties)  and for the refund of withholding taxes that have been unduly levied (mostly applies in the case of dividends and interest), the applicant must use specific forms issued by the Belgian tax authorities.  These forms consist of two copies, one copy for the Belgian tax authority and the other for the Austrian tax authority where the beneficial owner of the income is an Austrian resident. 

In the case for application for refund of withholding tax, the payer of income would first apply the domestic withholding tax, after which the nonresident can request the repayment of the excess withholding tax from the Belgian tax authorities. 

Due to the complexity of the Belgium – Austria Double Tax Treaty,  should you wish to take advantage of the treaty, we recommend that you contact our attorneys in Belgium.  For more information on the Belgium – Austria Double Tax Treaty and other taxation matters in Belgium, please feel free to contact our law firm in Belgium.