Double Taxation Agreement between Greece and Belgium – What you need to know
The Double Taxation Agreement (DTA) between Greece and Belgium aims to prevent individuals and companies from paying tax twice on the same income. With globalization and cross-border transactions becoming increasingly common, DTAs have become vital in the world of finance. In this article, we`ll discuss the key points of the DTA between Greece and Belgium and how it impacts individuals and companies.
Before we dive into the specifics, let`s first understand what double taxation is. Double taxation occurs when an individual or company is taxed twice on the same income in two different countries. This can happen when the individual or company has income in both countries, and both countries have the authority to tax that income. This can create a financial burden for the individual or company, leading to reduced profits and economic growth.
To avoid double taxation, countries enter into DTAs, which provide clear guidelines on how the income will be taxed. In the case of Greece and Belgium, the DTA establishes rules for the taxation of income from dividends, interest, royalties, and other sources.
Under the DTA, taxes on dividends are limited to a maximum of 15%, except when the recipient owns at least 25% of the dividend-paying company. In that case, the tax rate is limited to 5%. The tax rate on interest is limited to 10%, and royalty payments are subject to a maximum tax of 8%.
The DTA also addresses residency rules, which determine which country has the authority to tax the income. Under the DTA, a person is considered a resident of a country where they have a permanent home. If a person has a permanent home in both countries, the residency status is determined by other factors such as the center of vital interests, habitual abode, and nationality.
Companies are also impacted by the DTA, especially those with operations in both countries. The DTA outlines rules for the taxation of business profits, ensuring that companies are not taxed twice on their profits. The DTA also addresses the taxation of income from employment, ensuring that employees are not taxed twice on their income.
In conclusion, the DTA between Greece and Belgium is an essential agreement that aims to prevent double taxation. By establishing clear rules on the taxation of income from various sources, individuals and companies can avoid the financial burden of paying tax twice on the same income. It`s crucial for individuals and companies to understand the DTA`s impact on their finances and seek professional advice when needed.