Interpretation of subject-to-tax clauses in Belgium's tax treaties : critical analysis of the "exemption vaut impôt" doctrine

Abstract

This article examines the interpretation of the subject-to-tax clauses in Belgium's tax treaties. The interpretation of these clauses gives rise to substantial difficulties in practice because of the "exemption vaut impôt" doctrine. The article argues that the application of this doctrine, when interpreting the treaty relief provisions containing the expression "income that is taxed in the other State", leads to the same result as applying the Commentary when interpreting Art. 23 of the OECD Model, which contains the expression "income which ... may be taxed in the other Contracting State". Consequently, it is submitted that the application of the "exemption vaut impôt" doctrine should be rejected when interpreting a tax treaty containing the "is taxed" language.