Belgium and United States competent authority agreement

Belgium and the U.S. released a competent authority agreement on 15 October 2009 clarifying the interpretation of the limitation on benefits (LOB) provisions in the 2006 tax treaty for purposes of applying paragraph 3 of the dividends article. Paragraph 3 exempts dividends from U.S. withholding taxes if paid by a U.S. subsidiary to a Belgian resident parent company, provided the Belgian shareholder meets certain requirements, including satisfying one of four tests under the LOB article.

The competent authority agreement resolves a potential ambiguity by providing that, for purposes of determining "whether a person owning shares, directly or indirectly, in the company claiming the benefits of the Treaty, is an equivalent beneficiary, such person is to be deemed to hold the same voting power in the company paying the dividend as the company claiming the benefits holds in such company."