Direct Tax Alert

BACKGROUND

To grant relief from double taxation and efficient exchange of information, the Government of India has entered into Double Tax Avoidance Agreements (DTAA) with various countries. Any amendment in the DTAA is brought by way of a Protocol after discussion between both countries.

The DTAA and the Protocol between the Government of the Republic of India and the Government of the Kingdom of Belgium were signed at Brussels on 26 April 1993. The Protocol (Amending Protocol) amending the India-Belgium DTAA was signed in New Delhi on 9 March 2017 and came into force on 26 June 2025 following completion of legal procedures by both countries. Recently, in exercise of the powers conferred under section 90(1)¹ of the Income-tax Act, 1961 (IT Act), the Ministry of Finance (MOF) has notified² the Protocol to amend India-Belgium DTAA directing that all the provisions of the Amending Protocol shall be given effect to in the Union of India.

We, at BDO India, have summarised the key aspects of the Protocol and provided our comments on its impact hereunder:

Sr. No.	Existing provisions of DTAA	New provisions as per Protocol	Impact
	Article 3 (General Definitions):
1.	i. The definition of competent authority in the case of Belgium was limited to the Minister of Finance or his authorised representative.	i. The definition of competent authority in the case of Belgium has been revised to include the Minister of Finance of the Federal Government and/or of the Government of the Region and/or of a Community, or his authorised representative.	i. This amendment clarifies the Belgian authorities empowered to administer the India-Belgium DTAA, making cooperation and treaty implementation more efficient.
	ii. The original DTAA does not contain a definition of “criminal tax matters”.	ii. The definition of “criminal tax matters” has been inserted in Article 3(1) of India-Belgium DTAA. It covers tax matters involving intentional conduct that is liable for prosecution under the criminal and/or tax laws of the applicant country, irrespective of whether such conduct occurred before or after entry into force of the Protocol.	ii. The Protocol establishes mechanisms for cooperation in information exchange and tax recovery without breaching domestic laws or public policy constraints. Accordingly, the provisions shall apply to criminal tax matters from the date of entry into force of the Protocol.
2.	Article 26 (Exchange of Information): The original Article 26 of the India-Belgium DTAA is deleted and substituted with a wider information-exchange framework.	The new Article 26 of the India-Belgium DTAA requires exchange of all foreseeably relevant information for all taxes of every kind, even if the requested State does not need it for its own tax purposes. It removes restrictions related to banking, financial, nominee, agency or ownership information, and obligates the requested State to use its information-gathering powers to obtain and share such information.	This amendment aligns the DTAA with Organisation for Economic Co-operation and Development (OECD) standards for transparency and international cooperation by significantly broadening the scope and obligation. This enables robust cross-border transparency, helps India and Belgium combat tax evasion more effectively, and removes barriers like bank secrecy or domestic-interest limitations.
3.	Article 27(Aid and Assistance in Recovery): The original Article 27 of the India-Belgium DTAA is deleted and substituted with an expanded and modernised framework for assistance in the collection of taxes.	The new Article 27 (Assistance in Collection of Taxes) of India-Belgium DTAA obligates both countries to assist each other in collecting “revenue claims” which covers taxes of every kind, along with interest, penalties and collection costs. The requested State must collect the tax as if it were its own tax, and use conservancy measures when requested.	This amendment significantly broadens cooperation in tax collection between India and Belgium and aligns with OECD standards. It expands the scope to all taxes, enables use of conservancy measures and builds a robust framework for cross-border tax recovery by treating another State’s tax debt as its own for enforcement purposes.

BDO INDIA COMMENTS

The Protocol amending the India–Belgium DTAA represents an important development in strengthening bilateral economic relations and reflects the commitment of both Contracting States to enhanced cooperation in international taxation. It aligns the Treaty with evolving OECD standards, particularly those set out under the Base Erosion and Profit Shifting (BEPS) framework.

These amendments enhance transparency, prevent treaty abuse, including treaty shopping and provide greater tax certainty to cross-border taxpayers. The Protocol modernises the DTAA in line with international best practices and strengthens dispute resolution, enforcement and investor confidence.