Tax Treaty Case Law around the Globe 2013
1. Aufl. 2013
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S. 357 Belgium: Territorial allocation of business expenses and exemption with progression
Edoardo Traversa/Gaëtan Zeyen
1. S. 359 Introduction
The decision commented on in this contribution concerns the implementation of the exemption “with progression” in Belgian domestic law (Article 155 of the Belgian Income Tax Code, hereafter BITC), mainly in the context of the UK-Belgium DTC.
More precisely, the case which will be analyzed raises two different issues.
The first issue deals with the manner in which business expenses have to be taken into account, when the same professional activity generates income from several states. Have these business expenses necessarily to be deducted in proportion to the income generated in each state, or does the allocation of expenses to the different jurisdictions involved have to follow criteria which are independent from those attributing (positive) income?
The second issue concerns the articulation between tax credit for foreign income vested in Article 155 BITC and the other tax deductions and credits provided by the same BITC, mainly personal and family allowances: should the first be deducted from the “tax” before or after the latter? This issue, which was al...