Dauginet & Co

6 International and European tax law

Within the context of international relations, countries make arrangements to prevent two countries from taxing the same income. Agreements are made between the country where a person lives (country of residence) and the country where a person earns income (source country). Such agreements are based on an internationally established standard, the OECD Model Tax Convention on the avoidance of double taxation. A network of bilateral tax treaties must prevent that Belgian residents who work or earn income elsewhere have to pay taxes twice on the same income (of any kind: movable or immovable property, professional or miscellaneous income, corporate profits, etc.).

In addition, the law of the European Union has an important influence on Belgian tax law. On the one hand, the Belgian tax legislator must respect the European fundamental freedoms (freedom of establishment for companies, free movement of capital, free movement of persons and goods, and the freedom to provide services) in cross-border situations. On the other hand, a number of indirect taxes, such as customs and excise duties and value-added tax (VAT), are regulated at European level. Both European legislation and case law, which take precedence over national legislation and case law, provide guidance in these matters.