For many years, there are excellent relations between Belgium and Japan. The current royal mission to Japan clearly shows the strong ties of friendship between both countries.
There could not have been a better timing for the signature of a new tax treaty between both countries and this has this week been realised.
Tax treaties in general have a long life cycle and the ‘old’ tax treaty between both nations was signed on 28 March 1968. Many developments since then took place on the international tax scene and it was time for a major update. Negotiations on new tax treaties can take a long time and are usually done in a very discrete way.
Does this mean that tomorrow everything will immediately change? This is not the case as the ratification procedure of a tax treaty in both countries often is time consuming as well. The old treaty only entered into force two years after the signature date (on 16 April 1970). Also in other cases, substantial time delays could be seen before new tax treaties between countries become operational.
In the meanwhile, we will have the opportunity to thoroughly study the new treaty and to anticipate on it’s future impact.