The treaty between the US and Belgium reduces double taxation of income, eliminates barriers to trade and investment, and facilitates cross-border capital movement, according to Belgian government representatives.
Bilateral trade between the US and Belgium was valued at over $35 billion annually, making Belgium the 18th largest trading partner for the US, ahead of countries like India, Australia, Russia and Spain. Approximately 1,200 US companies have already invested a total of over $52 billion in Belgium. Belgian companies have invested more than $12 billion in the US, employing about 130,000 people.
The treaty introduces a 0% withholding tax on dividend payments from a US company in Belgium to its US parent, provided the US company owns 10% or more of the Belgian company. It also introduces a 0% withholding tax on interest. The treat is the first conducted by the US which contains a binding arbitration procedure. Anti-abuse provisions are designed to deny inappropriate use of the treat. And the treaty extends the benefits to companies owned by “equivalent beneficiaries” which may provide opportunities for multinational groups that are based in the EU, Switzerland, or under the North American Free Trade Agreement.