Desiring to conclude a convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income 　　Have agreed upon the following articles: ARTICLE 1 Personal Scope 　　This Convention is generally applicable to persons who are residents of one or both of the Contracting States. ARTICLE 2 Taxes Covered 　　(1) The taxes which are the subject of this Convention are: 　　(a) In the case of the United States, the Federal income taxes imposed by the Internal Revenue Code, hereinafter referred to as the "United States tax", and 　(b) In the case of Belgium: 　 (i) The individual income tax (l'imp?t des personnes physiques); 　 (ii) The corporate income tax (l'imp?t des sociétés); 　 (iii) The income tax on legal entities (l'imp?t des personnes morales); 　 (iv) The income tax on nonresidents (l'imp?t des non-résidents); 　(v) The prepayments and additional prepayments (les précomptes et compléments de précomptes); and 　　(vi) Surcharges (centimes additionnels) on any of the taxes referred to in (i) through (v), including the communal supplement to the individual income tax (la taxe communale additionnelle à l'imp?t des personnes physiques), hereinafter referred to as the "Belgian tax". 　　(2) This Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, existing taxes. 　　(3) The competent authorities of the Contracting States shall notify each other of any amendments of the laws imposing the taxes referred to in paragraph (1) and of the adoption of any taxes referred to in paragraph (2) by transmitting the texts of any amendments or new statutes at least once a year. 　　(4) The competent authorities of the Contracting States shall notify each other of the publication by their respective Contracting States of any material concerning the application of this Convention, whether in the form of regulations, rulings, or judicial decisions, by transmitting the texts of any such materials at least once a year. ARTICLE 3 General Definitions 　　(1) In this Convention, unless the context otherwise requires: 　　(a) (i) The term "United States" means the United States of America; and 　　(ii) When used in a geographical sense, the term "United States" means the States thereof and the District of Columbia. Such term also includes 　　(A) the territorial sea thereof, and 　　(B) the seabed and subsoil of the adjacent submarine areas beyond the territorial sea, over which the United States exercises sovereign rights in　accordance with international law for the purpose of exploration and exploitation of the natural resources of such areas, but only to the extent that the person, property, or activity to which this Convention is being applied is connected with such exploration or exploitation. 　　(b) (i)The term "Belgium" means the Kingdom of Belgium; and 　　(ii) When used in a geographical sense the term "Belgium" means the territory of　Belgium. Such term also includes 　　(A) the territorial sea thereof and 　　(B) the seabed and subsoil of the adjacent submarine areas beyond the territorial sea over which Belgium exercises sovereign rights in accordance with　international law, for the purpose of exploration and exploitation, of the natural　resources of such areas, but only to the extent that the person, property, or　activity to which this Convention is being applied is connected with such　exploration or exploitation. 　　(c) The, term "one of the Contracting States" or "the other Contracting State" means　the United States or Belgium, as the context requires. 　　(d) The term "person" includes an individual, a partnership, a corporation, an estate, a　trust, or any body of persons. 　　(e) (i) The term "United States corporation" or "corporation of the United States"　means a corporation which is created or organized under the laws of the United States　or any State thereof or the District of Columbia or any unincorporated entity treated as　a United States corporation for United States tax purposes, provided that such corporation or entity is not a Belgian corporation for Belgian tax purposes; and　 　　(ii) The term "Belgian corporation" or "corporation of Belgium" means any　entity which under Belgian tax law 　　(A) is either a body corporate or is treated as a body corporate and 　　(B) is a resident of Belgium, provided that such entity is not a United　States corporation for United States tax purposes. 　　(f) The term "competent authority" means: 　　(i) In the case of the United States, the Secretary of the Treasury or his delegate, and 　　(ii) In the ease of Belgium, the competent authority according to Belgian　legislation. 　　(g) The term "State" means any National State, whether or not one of the Contracting　States. 　　(2) Subject to paragraph (2) (d) of Article 25 (Mutual Agreement Procedure), any other term used in this Convention and not defined in this Convention shall, unless the context otherwise requires, have the meaning which it has under the laws of the Contracting State whose tax is being determined. ARTICLE 4 Fiscal Domicile 　　(1) In this Convention: 　　(a) The term "resident of Belgium" means: 　　(i) A Belgian corporation, and 　　(ii) Any person (other than a corporation) who is a resident of Belgium for　purposes of its tax. 　　(b) The term "resident of the United States" means: 　　(i) A United States corporation, and 　　(ii) Any person (except a corporation or any other entity treated as a corporation for United States tax purposes) resident in the United States for purposes of its tax, but in the case of a partnership, estate, or trust only to the extent that the income derived by such person is subject to United States tax as the income of a resident. 　　(2) Where by reason of the provisions of paragraph (1) an individual is a resident of both　Contracting States: 　　(a) He shall be deemed to be a resident of that Contracting State in which he maintains his permanent home. If he has a permanent home in both Contracting States or in neither of the Contracting States, he shall be deemed a resident of that Contracting State with which his personal and economic relations are closest (center of vital interests); 　　(b) If the Contracting State in which he has his center of vital interests cannot be determined, he shall be deemed to be a resident of that Contracting State in which he has a habitual abode; 　　(c) If he has a habitual abode in both Contracting States or in neither of the Contracting States, he shall be deemed to be a resident of the Contracting State of which he is a citizen; and (d) If he is a citizen of both Contracting States or of neither Contracting State the competent authorities of the Contracting States shall settle the question by mutual agreement. For purpose of this paragraph, a permanent home is the place where an individual dwells with his family. ARTICLE 5 Permanent Establishment 　　(1) For the purpose of this Convention, the term "permanent establishment" means a fixed place of business through which a resident of one of the Contracting States engages in industrial or commercial activity. 　　(2) The term "fixed place of business" includes but is not limited to: 　　(a) A seat of management; 　　(b) A branch; 　　(c) An office; 　　(d) A factory; 　　(e) A workshop; 　　(f) A warehouse; 　　(g) A mine, quarry, or other place of extraction of natural resources; and 　　(h) A building site or construction or installation project which exists for more than 12　months. 　　(3) Notwithstanding paragraphs (1) and (2), a permanent establishment shall not include a fixed place of business used only for one or more of the following: 　　(a) The use of facilities for the purpose of storage, display, or delivery of goods or merchandise belonging to the resident; (b) The maintenance of a stock of goods or merchandise belonging to the resident for the purpose of storage, display, or delivery; 　　(c) The maintenance of a stock of goods or merchandise belonging to the resident for　the purpose of processing by another person; 　　(d) The maintenance of a fixed place of business for the purpose of purchasing goods or　merchandise, or for collecting information, for the resident; 　　(e) The maintenance of a fixed place of business for the purpose of advertising, for the　supply of information, for scientific research, or for similar activities which have a preparatory or auxiliary character, for the resident; or 　　(f) The maintenance of a building site or construction or installation project which does　not exist for more than 12 months. 　　(4) Notwithstanding subparagraph (a), (c) and (d) of paragraph (3), if a resident of one of the Contracting States has a fixed place of business in the other Contracting State and goods or merchandise are either: 　　(a) Subjected to processing in the other Contracting State by another person (whether　or not purchased in the other Contracting State); or 　　(b) Purchased in the other Contracting State (and such goods or merchandise are not　subjected to processing outside the other Contracting State)　such resident shall be considered to have a permanent establishment in that other Contracting State, if all or part of such goods or merchandise is sold by, or on behalf of such resident for use, consumption, or disposition in that other Contracting State. 　　(5) A person acting in one of the Contracting States on behalf of a resident of the other Contracting State, other than an agent of an independent status to whom paragraph (6) applies, shall be deemed to be a permanent establishment in the first-mentioned Contracting State if such person has, and habitually exercises in the first-mentioned Contracting State, an authority to conclude contracts in the name of that resident, unless the exercise of such authority is limited to the purchase of goods or merchandise for that　resident. 　　(6) A resident of one of the Contracting States shall not be deemed to have a permanent　establishment in the other Contracting State merely because such resident engages in industrial or commercial activity in that other Contracting State through a broker, general commission agent, or any other agent of an independent status, where such broker or agent is acting in the ordinary course of his business. This paragraph shall not apply with respect to a broker or agent acting on behalf of an insurance company if such broker or agent has, and habitually exercises, an authority to conclude contracts in the name of that company. 　　(7) The fact that a resident of one of the Contracting States is a related person with respect to a resident of the other Contracting State or with respect to a person who engages in industrial or commercial activity in that other Contracting State (whether through a permanent establishment or otherwise) shall not be taken into account in determining whether that resident of the first-mentioned Contracting State has a permanent establishment in that other Contracting State. 　　(8) The principles set forth in paragraphs (1) through (7) shall be applied in determining whether there is a permanent establishment in a State other than one of the Contracting States or whether a person other than a resident of one of the Contracting States has a permanent establishment in one of the Contracting States. ARTICLE 6 Income from Real Property 　　(1) Income from real property, including royalties in respect of the operation of mines, quarries, or other natural resources and gains derived from the sale, exchange, or other disposition of such property or, of the right, giving rise to such royalties, may be taxed by the Contracting State in which such real property, mines, quarries, or other natural resources are situated. For purposes of this Convention interest or indebtedness secured by real property by a right giving rise to royalties in respect of the operation of mines, quarries, or other natural resources shall not be regarded as income from real property. 　　(2) Paragraph (1) shall apply to income derived from the usufruct, direct use, letting, or use in any other form of real property. ARTICLE 7 Business Profits 　　(1) Industrial or commercial profits of a resident of one of the Contracting States shall be exempt from tax by the other Contracting State unless such resident is engaged in industrial or commercial activity in that other Contracting State through a permanent establishment situated therein. If such resident is so engaged, tax may be imposed by that other Contracting State on the industrial or commercial profits of such resident but only on so much of such profits as are attributable to the permanent establishment. 　　(2) Where a resident of one of the Contracting States is engaged in industrial or commercial activity in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to the permanent establishment the industrial or commercial profits which would be attributable to such permanent establishment if such permanent establishment were an independent entity engaged in the same or similar activities under the same or similar conditions and dealing wholly independently. 　　(3) In the determination of the industrial or commercial profits of a permanent establishment, there shall be allowed as deductions expenses which are reasonably connected with such profits, including executive and general administrative expenses, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere. 　　(4) No profits shall be attributed to a permanent establishment of a resident of one of the Contracting States in the other Contracting State merely by reason of the purchase of goods or merchandise by the permanent establishment, or by the resident of which it is a permanent establishment, for the account of that resident. 　　(5) For the purposes of this Convention the term "industrial or commercial profits": 　　(a) Does include rents or royalties derived from motion picture films or films or tapes used for radio or television broadcasting or from copyrights thereof and rents derived from the leasing of tangible personal property; 　　(b) Does not include items of income specifically dealt with in other articles of this Convention, except as provided in such articles. Subject to the provisions of this Convention, items of income excluded from industrial or commercial profits under subparagraph (b) may be taxed separately or together with industrial or commercial profits in accordance with the laws of the Contracting State whose tax is being determined. ARTICLE 8 Shipping and Air Transport 　　(1) Notwithstanding Article 7 (Business Profits) and Article 13 (Capital Gains), income which a resident of one of the Contracting States derives from the operation in international traffic of ships registered in that Contracting State, and gains which a resident of one of the Contracting States derives from the sale, exchange, or other disposition of ships operated in international traffic by such resident and registered in that Contracting State, shall be exempt from tax by the other Contracting State. 　　(2) Notwithstanding Article 7 (Business Profits) and Article 13 (Capital Gains), income which a resident of one of the Contracting States derives from the operation in international traffic of aircraft registered in either Contracting State or in a State with which the other Contracting State has an income tax convention exempting such income, and gains which a resident of one of the Contracting States derives from the sale, exchange or other disposition of aircraft operated in international traffic by such resident and registered in either Contracting State or in a State with which the other Contracting State has an income tax convention exempting such income, shall be exempt from tax by the other Contracting State. ARTICLE 9 Associated Enterprises 　　(1) Where a resident of one of the Contracting States and a resident of the other Contracting State are related and where such related persons make arrangements or impose conditions between themselves which are different from those which would be made between independent persons, then any income which would, but for those arrangements or conditions, have accrued to the resident of the first-mentioned Contracting State but, by reason of those arrangements or conditions, has not so accrued, may be included in the income of the resident of the first-mentioned Contracting State for purposes of this Convention and taxed accordingly. 　　(2) A person is related to another person for purposes of this Convention if either person　participates directly or indirectly in the management, control, or capital of the other, or if any third person or persons participates directly or indirectly in the management, control, or capital of both. ARTICLE 10 Dividends 　　(1) Dividends paid by a corporation of one of the Contracting States to a resident of the other Contracting State may be taxed by both Contracting States. 　　(2) The rate of tax imposed by the first-mentioned Contracting State on such dividends shall not exceed 15 percent of the gross amount actually distributed. The term "dividends" shall include income from invested capital received by members of Belgian companies other than companies with share capital where, under Belgian law, such income is taxable in the same way as dividends. 　　(3) Paragraph (2) shall not apply if the recipient of the dividends, being a resident of one of the Contracting States, has a permanent establishment in the other Contracting State and the shares with respect to which the dividends are paid are effectively connected with such permanent establishment. In such a case, Article 7 (Business Profits) shall apply, provided that Belgium shall not be prevented from imposing its movable property prepayment (précompte mobilier) in accordance with Belgian law. 　　(4) Dividends paid by a corporation of one of the Contracting States to a person other than a resident of the other Contracting State shall be exempt from tax by that other Contracting State. This paragraph shall not apply: 　　(a) If the recipient of the dividends has a permanent establishment in that other Contracting State and the shares with respect to which the dividends are paid are effectively connected with such permanent establishment, or 　　(b) If the dividends are paid by a United States corporation and are received within　Belgium by a person who is not a citizen or resident of the United States. ARTICLE 11 Interest 　　(1) Interest derived from sources within one of the Contracting States by a resident of the other Contracting State may be taxed by both Contracting States. 　　(2) The rate of tax imposed by one of the Contracting States on interest derived from sources within that Contracting State by a resident of the other Contracting State shall not exceed 15 percent. 　　(3) Notwithstanding paragraphs (1) and (2), interest derived by a resident of one of the Contracting States from sources in the other Contracting State shall be exempt from tax by the other Contracting State if it is: 　　(a) Interest arising out of commercial credit-including credit which is represented by commercial paper-resulting from deferred payments for goods or merchandise or services supplied by a resident of one of the Contracting States to a resident of the other Contracting State, 　　(b) Interest paid between banks, except on loans represented by bearer instruments, or 　　(c) Interest arising from deposits, not represented by bearer instruments, made in banks or other financial institutions. 　　(4) Notwithstanding paragraphs (1) and (2), interest beneficially derived by one of the Contracting States, or by an instrumentality of that Contracting State, not subject to tax by that Contracting State on its income, shall be exempt from tax by the other Contracting State. 　　(5) The term "interest" as used in this Convention means income from bonds, Government securities, notes or other evidences of indebtedness, whether or not secured and whether or not carrying a right to participate in profits, and debt-claims of every kind, as well as all other income assimilated to income from money lent by the taxation law of the Contracting State in which the income has its source, but not interest which is considered as dividends in accordance with the second sentence of paragraph (2) of Article 10 (Dividends); it includes, in the case of Belgium, prizes on lottery bonds. 　　(6) Interest shall be treated as income from sources within a Contracting State only if paid by such Contracting State, a political subdivision or a local authority thereof, or by a resident of that Contracting State. Notwithstanding the preceding sentence: 　　(a) If the person paying the interest (whether or not such person is a resident of one of the Contracting States) has a permanent establishment in one of the Contracting States in connection with which the indebtedness on which the interest is paid was incurred and such interest is borne by such permanent establishment, or (b) If the person paying the interest is a resident of one of the Contracting States and has a permanent establishment in a State other than a Contracting State in connection with which the indebtedness on which the interest is paid was incurred and such interest is paid to a resident of the other Contracting State, and such interest is borne by such permanent establishment, such interest shall be deemed to be from sources within the State in which the permanent establishment is situated. 　　(7) Paragraphs (2), (3), and (4) shall not apply if the recipient of the interest, being a resident of one of the Contracting States, has a permanent establishment in the other Contracting State and the indebtedness giving rise to the interest is effectively connected with such permanent establishment. In such a case, the provisions of Article 7 (Business Profits) shall apply. 　　(8) Where any interest paid by a person to any related person exceeds an amount which would have been paid to an unrelated person, the provisions of this article shall apply only to so much of the interest as would have been paid to an unrelated person. In such a case the excess payment may be taxed according to its own law by the Contracting State from which the interest is derived. 　　(9) Interest paid by a resident of one of the Contracting States to a person other than a resident of the other Contracting State shall be exempt from tax by that other Contracting State. This paragraph shall not apply if: 　　(a) Such interest is treated as income from sources within that other Contracting State under paragraph (6), (b) The recipient of the interest has a permanent establishment in that other Contracting State and the indebtedness giving rise to the interest is effectively connected with such permanent establishment, or 　　(c) Such interest is from sources within the United States and is received within Belgium by a person who is not a citizen or resident of the United States. ARTICLE 12 Royalties 　　(1) Royalties derived from sources within one of the Contracting States by a resident of the other Contracting State shall be exempt from tax by the first-mentioned Contracting State. 　　(2) The term "royalties" as used in this article means: 　　(a) Payment of any kind made as consideration for the use of, or the right to use,copyrights of literary, artistic, or scientific works (but not including copyrights of motion picture films or films or tapes used for radio or television broadcasting), patents, designs, models, plans, secret processes or formulae, trademarks, or other like property or rights, or knowledge, experience, or skill (know-how), and 　　(b) Gains derived from the sale, exchange, or other disposition of any such right or property to the extent that the amounts realized on such sale, exchange, or other disposition for consideration are contingent on the productivity, use, or disposition of such right or property. 　　(3) Royalties shall be treated as income from sources within one of the Contracting States only if paid by such Contracting State, a political subdivision or a local authority thereof, or by a resident of that Contracting State. Notwithstanding the preceding sentence: 　　(a) If the person paying the royalties (whether or not such a person is a resident of one of the Contracting States) has a permanent establishment in one of the Contracting States with which the right or property giving rise to the royalties is effectively connected and such royalties are borne by such permanent establishment, or 　　(b) If the person paying the royalties is a resident of one of the Contracting States and has a permanent establishment in a State other than a Contracting State with which the right or property giving rise to the royalties is effectively connected and such royalties are borne by such permanent establishment, such royalties shall be deemed to be from sources within the State in which the permanent establishment is situated. 　　(4) Paragraph (1) shall not apply if the recipient of the royalty, being a resident of one of the Contracting States, has in the other Contracting State a permanent establishment and the right or property giving rise to the royalty is effectively connected with such permanent establishment. In such a case the provisions of Article 7 (Business Profits) shall apply. 　　(5) Where any royalty paid by a person to any related person exceeds an amount which would have been paid to an unrelated person, the provisions of this article shall apply only to so much of the royalty as would have been paid to an unrelated person. In such a case the excess payment may be taxed according to its own law by the Contracting State from which the royalty is derived.