The Ministry of Finance has officially notified the enforcement of the Protocol amending the Double Taxation Avoidance Agreement (DTAA) between India and Belgium. The amendment, signed in New Delhi on March 9, 2017, came into effect on June 26, 2025, marking a significant update in bilateral tax cooperation between the two nations.
The notification, published as S.O. 5074(E) under Notification No. 160/2025 - Income-Tax, was issued under Section 90(1) of the Income-tax Act, 1961, empowering the Central Government to give effect to international tax treaties.
Key Highlights of the Amending Protocol
1. Updated Definitions and Competent Authority
The protocol revises Article 3 of the existing 1993 DTAA to clarify the definition of "competent authority."
- For India: the Central Government in the Ministry of Finance (Department of Revenue).
- For Belgium: the Minister of Finance of the federal, regional, or community governments, or their authorised representatives.
A new clause defines "criminal tax matters" as cases involving intentional tax-related misconduct subject to prosecution under criminal or tax laws.
2. Strengthened Exchange of Information (Article 26)
The amended Article 26 significantly broadens the scope of information exchange between the two countries. Authorities may now exchange information relevant to enforcing tax laws, including those involving banks, financial institutions, or fiduciaries.
The provision aligns the India-Belgium DTAA with OECD and G20 standards on tax transparency, ensuring cooperation in addressing tax evasion, base erosion, and profit shifting (BEPS).
3. Mutual Assistance in Tax Collection (Article 27)
The new Article 27 introduces assistance in the collection of taxes across jurisdictions. It allows one country to help the other in recovering tax dues, interest, penalties, and related costs, subject to domestic laws and administrative practices. However, the clause excludes any obligation to undertake actions contrary to public policy or measures that impose disproportionate administrative burdens.
Effective Date and Application
The amending protocol entered into force on June 26, 2025, the date both governments completed legal formalities.It applies:
- Immediately for criminal tax matters.
- For other tax matters from the start of the first taxable period beginning on or after June 26, 2025.
Significance of the Amendment
The updated DTAA protocol strengthens bilateral cooperation between India and Belgium in preventing fiscal evasion, ensuring better enforcement of tax laws, and promoting greater transparency in cross-border taxation. It also aligns India's tax treaty framework with evolving global standards under the OECD's Base Erosion and Profit Shifting (BEPS) project, improving India's standing as a transparent and compliant tax jurisdiction.
- Notification Reference: Government of India, Ministry of Finance (Department of Revenue)
- Notification No. 160/2025 [S.O. 5074(E)], dated 10th November 2025
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