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PROTOCOL 

At the signing of the Convention between the Government of the United States of 

America and the Government of the Kingdom of Belgium for the Avoidance of Double 

Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter 

referred to as “the Convention”), the Government of the United States of America and the 

Government of the Kingdom of Belgium have agreed on the following provisions. This 

Protocol shall form an integral part of the Convention. 

1. In reference to Article 7 (Business Profits) 

It is understood that the business profits to be attributed to a permanent establishment 

shall include only the profits derived from the assets used, risks assumed and activities 

performed by the permanent establishment. The principles of the OECD Transfer Pricing 

Guidelines will apply for purposes of determining the profits attributable to a permanent 

establishment, taking into account the different economic and legal circumstances of a single 

entity. Accordingly, any of the methods described therein as acceptable methods for 

determining an arm’s length result may be used to determine the income of a permanent 

establishment so long as those methods are applied in accordance with the Guidelines. In 

particular, in determining the amount of attributable profits, the permanent establishment shall 

be treated as having the same amount of capital that it would need to support its activities if it 

were a distinct and separate enterprise engaged in the same or similar activities. With respect 

to financial institutions other than insurance companies, a Contracting State may determine the 

amount of capital to be attributed to a permanent establishment by allocating the institution’s 

total equity between its various offices on the basis of the proportion of the financial 

institution’s risk-weighted assets attributable to each of them. In the case of an insurance 

company, there shall be attributed to a permanent establishment not only premiums earned 

through the permanent establishment, but that portion of the insurance company's overall 

investment income from reserves and surplus that supports the risks assumed by the permanent 

establishment. 

2. In reference to Article 14 (Income from Employment) 

With respect to paragraphs 1 and 2 of Article 14 (Income from Employment), where 

remuneration is derived by a resident of one of the States in respect of an employment, 

employment is exercised in the place where the employee is physically present when 

performing the activities for which the remuneration is paid, irrespective of the residence of the 

payer, the place in which the contract of employment was made, the residence of the employer, 

the place or time of payment, or the place where the results of the work were exploited. 
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3. In reference to Article 15 (Directors' Fees) 

a) Article 15 (Directors' Fees) also shall apply to fees received by a 

"gerant"/"zaakvoerder" of a company, other than a company with share capital, in his 

capacity as such. 

b) i) Remuneration derived by a person referred to in Article 15 from a 

company which is a resident of a Contracting State in respect of the discharge of 

day-to-day functions of a managerial or technical, commercial or financial 

nature shall be taxable in accordance with the provisions of Article 14 (Income 

from Employment), and not Article 15; to the extent that the company is a 

Belgian company, Article 14 shall be applied as if such remuneration were 

remuneration derived by an employee in respect of an employment and as if 

references to the "employer" were references to the company. 

 ii) Remuneration received by a resident of a Contracting State in respect of 

his day-to-day activity as a partner of a company that is a resident of Belgium, 

other than a company with share capital, shall be taxable in accordance with the 

provisions of Article 14, as if such remuneration were remuneration derived by 

an employee in respect of an employment and as if references to the "employer" 

were references to the company. 

 iii) Article 7 (Business Profits), and not Article 14 or 15, shall apply to a 

partner's distributive share of the income of an entity that is treated as fiscally 

transparent, such as a U.S. partnership. 

4. In reference to Article 17 (Pensions, Social Security, Annuities, Alimony, and 

Child Support) 

 The term "similar legislation” is intended to refer to United States tier 1 

Railroad Retirement benefits. 

5. In reference to paragraph 1 of Article 24 (Mutual Agreement Procedure) 

The term "first notification of the action resulting in taxation not in accordance with the 

provisions of the Convention" shall mean: 

a) in the case of Belgium, the date on which the notice of assessment containing an 

assessment or supplementary assessment is sent to the person who considers that the 

taxation provided for in such assessment or supplementary assessment is contrary to the 

provisions of the Convention; and 
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b) in the case of the United States, the date on which the taxpayer receives a notice 

of proposed adjustment or of assessment, whichever is earlier. 

6. In reference to paragraphs 7 and 8 of Article 24 (Mutual Agreement Procedure) 

 In respect of any case where the competent authorities have endeavored but are 

unable to reach an agreement under Article 24 regarding the application of the Convention, 

binding arbitration shall be used to determine such application, unless the competent authorities 

agree that the particular case is not suitable for determination by arbitration. If an arbitration 

proceeding (the Proceeding) under paragraph 7 of Article 24 commences, the following rules 

and procedures will apply. 

 a) The Proceeding will be conducted in the manner prescribed by, and 

 subject to the requirements of, paragraphs 7 and 8 of Article 24 and these rules 

 and procedures, as modified or supplemented by any other rules and procedures 

 agreed upon by the competent authorities pursuant to subparagraph q) below. 

 b) The determination reached by an arbitration board in the Proceeding shall 

 be limited to a determination regarding the amount of income, expense or tax 

 reportable to the Contracting States. 

 c) Notwithstanding the initiation of the Proceeding, the competent authorities 

 may reach a mutual agreement to resolve a case and terminate the Proceeding. 

 Correspondingly, a concerned person may withdraw a request for the competent 

 authorities to engage in the Mutual Agreement Procedure (and thereby terminate 

 the Proceeding) at any time. 

 d) The requirements of subparagraph d) of paragraph 8 of Article 24 will be 

 met when the competent authorities have each received from each concerned 

 person a statement agreeing that the concerned person and each person acting on 

 the concerned person’s behalf will not disclose to any other person any 

 information received during the course of the Proceeding from either Contracting 

 State or the arbitration board, other than the determination of the Proceeding. A 

 concerned person that has the legal authority to bind any other concerned 

 person(s) on this matter may do so in a comprehensive statement. 

 e) Each Contracting State will have 60 days from the date on which the 

 Proceeding begins to send a written communication to the other Contracting State 

 appointing one member of the arbitration board. Within 60 days of the date on 

 which the second such communication is sent, the two members appointed by the 

 Contracting States will appoint a third member, who will serve as Chair of the 

 board. If either Contracting State fails to appoint a member, or if the members 

 appointed by the Contracting States fail to agree upon the third member in the 

 manner prescribed by this paragraph, the remaining member(s) will be appointed 
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 by the highest-ranking member of the Secretariat at the Centre for Tax Policy and 

 Administration of the Organisation for Economic Co-operation and Development 

 (OECD) who is not a citizen of either Contracting State, by written notice to both 

 Contracting States within 60 days of the date of such failure. The competent 

 authorities will develop a non-exclusive list of individuals with familiarity in 

 international tax matters who may potentially serve as the Chair of the board. In 

 any case, the Chair shall not be a citizen of either Contracting State. 

 f) The arbitration board may adopt any procedures necessary for the conduct 

 of its business, provided that the procedures are not inconsistent with any 

 provision of Article 24 or the Protocol to the Convention. 

 g) Each of the Contracting States will be permitted to submit, within 60 days 

 of the appointment of the Chair of the arbitration board, a Proposed Resolution 

 describing the proposed disposition of the specific monetary amounts of income, 

 expense or taxation at issue in the case, and a supporting Position Paper, for 

 consideration by the arbitration board. Copies of the Proposed Resolution and 

 supporting Position Paper shall be provided by the board to the other Contracting 

 State on the date on which the later of the submissions is submitted to the board. 

 In the event that only one Contracting State submits a Proposed Resolution within 

 the allotted time, then that Proposed Resolution shall be deemed to be the 

 determination of the board in that case and the Proceeding shall be terminated. 

 Each of the Contracting States may, if it so desires, submit a Reply Submission to 

 the board within 120 days of the appointment of its Chair, to address any points 

 raised by the Proposed Resolution or Position Paper submitted by the other 

 Contracting State. Additional information may be submitted to the arbitration 

 board only at its request, and copies of the board’s request and the Contracting 

 State’s response shall be provided to the other Contracting State on the date on 

 which the request or the response is submitted. Except for logistical matters such 

 as those identified in subparagraphs l), n) and o) below, all communications from 

 the Contracting States to the arbitration board, and vice versa, shall take place 

 only through written communications between the designated competent 

 authorities and the Chair of the board. 

 h) The arbitration board will deliver a determination in writing to the 

 Contracting States within six months of the appointment of its Chair. The board 

 will adopt as its determination one of the Proposed Resolutions submitted by the 

 Contracting States. 

 i) In making its determination, the arbitration board will apply, as necessary 

 and in descending order of priority: 

 i) the provisions of the Convention; 
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 ii) any agreed commentaries or explanations of the Contracting States 

concerning the Convention; 

 iii) the laws of the Contracting States to the extent they are not inconsistent 

with each other; and 

 iv) any OECD Commentary, Guidelines or Reports regarding relevant 

analogous portions of the OECD Model Tax Convention. 

 j) The determination of the arbitration board in a particular case shall be 

 binding on the Contracting States. The determination of the board will not state a 

 rationale. It will have no precedential value. 

 k) As provided in subparagraph e) of paragraph 8 of Article 24, the 

 determination of an arbitration board shall constitute a resolution by mutual 

 agreement under Article 24. Each concerned person must, within 30 days of 

 receiving the determination of the board from the competent authority to which 

 the case was first presented, advise that competent authority whether that 

 concerned person accepts the determination of the board. In the event the case is 

 in litigation, each concerned person who is a party to the litigation must also 

 advise, within the same time frame, the relevant court of its acceptance of the 

determination of the board as the resolution by mutual agreement and withdraw from 

the consideration of the court the issues resolved through the Proceeding. If any 

concerned person fails to so advise the relevant competent authority and relevant court 

within this time frame, the determination of the board will be considered not to have 

been accepted in that case. Where the determination of the board is not accepted, the 

case may not subsequently be the subject of a Proceeding. 

 l) Any meeting(s) of the arbitration board shall be in facilities provided by 

 the Contracting State whose competent authority initiated the mutual agreement 

 proceedings in the case. 

 m) The treatment of any associated interest or penalties will be determined by 

 applicable domestic law of the Contracting State(s) concerned. 

 n) No information relating to the Proceeding (including the board's 

 determination) may be disclosed by the members of the arbitration board or their 

 staffs or by either competent authority, except as permitted by the Convention and 

 the domestic laws of the Contracting States. In addition, all material prepared in 

 the course of, or relating to, the Proceeding shall be considered to be information 

 exchanged between the Contracting States. All members of the arbitration board 

 and their staffs must agree in statements sent to each of the Contracting States in 

 confirmation of their appointment to the arbitration board to abide by and be 

 subject to the confidentiality and nondisclosure provisions of Article 25 

 (Exchange of Information and Administrative Assistance) of the Convention and 

 the applicable domestic laws of the Contracting States. In the event those 
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 provisions conflict, the most restrictive condition shall apply. 

 o) The fees and expenses will be borne equally by the Contracting States. In 

 general, the fees of members of the arbitration board will be set at the fixed 

 amount of $2,000 (two thousand United States dollars) per day or the equivalent 

 amount in euro, subject to modification by the competent authorities. In general, 

 the expenses of members of the arbitration board will be set in accordance with 

 the International Centre for Settlement of Investment Disputes (ICSID) Schedule 

 of Fees for arbitrators (as in effect on the date on which the arbitration 

proceedings begin), subject to modification by the competent authorities. Any fees for 

language translation will also be borne equally by the Contracting States. Meeting 

facilities, related resources, financial management, other logistical support, and general 

administrative coordination of the Proceeding will be provided, at its own cost, by the 

Contracting State whose competent authority initiated the mutual agreement 

proceedings in the case. Any other costs shall be borne by the Contracting State that 

incurs them. 

 p) For purposes of paragraphs 7 and 8 of Article 24 and this paragraph, each 

 competent authority will confirm in writing to the other competent authority and 

 to the concerned person(s) the date of its receipt of the information necessary to 

 undertake substantive consideration for a mutual agreement. Such information 

 will be: 

 i) in the United States, the information required to be submitted to the 

United States competent authority under Revenue Procedure 2002-52, section 

4.05 (or any applicable successor provisions) and, for cases initially submitted 

as a request for an Advance Pricing Agreement, the information required to be 

submitted to the Internal Revenue Service under Revenue Procedure 2006-9, 

section 4 (or any applicable successor provisions), and 

 ii) in Belgium, any information that would be required under instructions or 

commentaries published by the Federal Public Service Finance. 

 However, this information shall not be considered received until both competent 

 authorities have received copies of all materials submitted to either Contracting 

 State by the concerned person(s) in connection with the mutual agreement 

 procedure. 

 q) The competent authorities of the Contracting States may modify or 

 supplement the above rules and procedures as necessary to more effectively 

 implement the intent of paragraph 7 of Article 24 to eliminate double taxation. 
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7. In reference to Article 25 (Exchange of Information and Administrative Assistance) 

Banking records will be exchanged only upon request. If the request does not identify 

both a specific taxpayer and a specific bank or financial institution, the competent authority of 

the requested State may decline to obtain any information that it does not already possess. 

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto by their 

respective Governments, have signed this Protocol. 

DONE at Brussels in duplicate, in the English language, this twenty-seventh day of 

November, 2006. 

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA: THE KINGDOM OF BELGIUM: