Belgium – USA Transport Tax Agreement (1987)

Transportation Tax Agreement (1988) 

This Treaty was signed on March 21, 1988 and entered into force on March 21, 1988. 

Agreement Between the UNITED STATES OF AMERICA and BELGIUM

The Department of State to the Belgian Embassy

The Department of State proposes to the Embassy of Belgium that the Government of Belgium conclude an agreement replacing the Arrangement of January 28, 1936, and the Agreement of July 18, 1953, to exempt from income tax, on a reciprocal basis, income derived by residents of the other country from the international operation of ships and aircraft. The terms of the agreement are as follows:

The Government of the United States of America, in accordance with sections 872(b) and 883(a) of the Internal Revenue Code, agrees to exempt from tax gross income derived from the international operation of ships or aircraft by residents of Belgium (other than individuals who are U.S. citizens). This exemption is granted on the basis of equivalent exemptions granted by Belgium.

In the case of a corporation, the exemption shall apply only if the corporation meets either of the following conditions:

(1) more than 50 percent of the value of the corporation’s stock is owned, directly or indirectly, by individuals who are residents of Belgium or of another country which grants a reciprocal exemption to U.S. citizens and corporations; or

(2) the corporation’s stock is primarily and regularly traded on a recognized stock exchange in Belgium or is wholly owned by a corporation whose stock is so traded and which is also a resident of Belgium.

For the purposes of subparagraph (1), the Government of Belgium shall be treated as an individual resident of Belgium.

For purposes of the exemption from U.S. tax, subparagraph (1) will be considered to be satisfied if the corporation is a “controlled foreign corporation” under the Internal Revenue Code.

The Department of State considers that this note, together with the Embassy’s reply note confirming that the Government of Belgium agrees to these terms, constitutes an agreement replacing the Arrangement of January 28, 1936, and the Agreement of July 18, 1953. This agreement shall enter into force on the date of the Embassy’s reply note and shall have effect with respect to taxable years beginning on or after January 1, 1987.

Either Government may terminate this agreement by giving written notice of termination through diplomatic channels.

Department of State,
Washington, OCTOBER 14 1987
The Belgian Embassy to the Department of State
AMBASSADE DE BELGIQUE
B 21-95

The Embassy of Belgium presents its compliments to the Department of State and has the honour to acknowledge receipt of the Department’s note of October 14, 1987, proposing the terms of a reciprocal exemption from income tax of income derived from the international operation of ships and aircraft.

The Government of Belgium in accordance with Article 141, 5*, of the Income Tax Code, agrees to exempt from tax income derived from the international operation of ships or aircraft by U.S. residents or by U.S, citizens, who are not residents of Belgium.

In the case of a corporation, the exemption shall apply only if the corporation meets either of the following conditions:

(1) more than 50 percent of the value of the corporation’s stock is owned, directly or indirectly, by individuals who are citizens of United States or of another country which grants a reciprocal exemption to Belgium residents and corporations; or

(2) the corporation’s stock is primarily and regularly traded on an established securities market in the United States, or is wholly owned by a corporation whose stock is so traded and which is also organized in the United States.

For the purposes of subparagraph (1), the Government of the United States shall be treated as an individual resident of the United States.

The Embassy is pleased to confirm that the Department of State’s note and this reply note constitute an agreement replacing the Arrangement of January 28, 1936, and the Agreement of July 18, 1953, which shall enter into force on today’s date and shall have effect with respect to taxable years beginning on or after January 1, 1987.

Either Government may terminate this agreement by giving written notice of termination through diplomatic channels.

The Embassy of Belgium takes this opportunity to renew to the Department of State the assurances of its highest consideration.

The Department of State                       Washington, March 21, 1988
Washington, D.C.