Teaching in Congo Without Paying Tax
In a decision of 24 October 2024 (Nr F.20.0108.F), the Belgian Supreme Court clarified the tax treatment of foreign income under the Belgium-Congo Double Taxation Agreement (DTA). The case involved a Belgian resident employed by a Belgian non-profit organization providing educational services in Congo. Although the Belgium-Congo DTA allocates taxing rights over such employment income to Congo, the local authorities never actually taxed the salary.
Relying on the treaty wording, the taxpayer then requested a tax exemption in Belgium (under the progression rule). The Court of Appeal of Liège initially accepted this reasoning, arguing that the income had indeed been ‘subject-to-tax’ in Congo — even though that regime resulted in no actual taxation. The exemption for foreign teachers was apparently based on an unlawful administrative practice between the two countries.
No Taxation Means No Exemption
The Belgian tax authorities disagreed and challenged the decision before the Supreme Court. The Court ultimately ruled that for Belgium to grant an exemption, the income must have been effectively taxed in the source country. A mere theoretical tax liability, or an administrative exemption, is not sufficient.
The Court emphasized that under Article 22, §2, a) of the Belgium-Congo treaty, and following the OECD Model Convention, only income that is actually taxed abroad can be exempt in Belgium. In this case, since no effective taxation occurred in Congo, Belgium retains the right to tax the income.
OECD Commentary Takes Center Stage
This ruling diverges sharply from previous cases concerning the (old) Belgium–Netherlands treaty, where the Court accepted that income exempted in the Netherlands still qualified for Belgian exemption (Decisions of 25 January 2018 and 6 September 2024).
The key difference lies in the specific provisions of both tax treaties. The Belgium-Congo treaty contains a clear reference requiring that terms undefined by the treaty be interpreted consistently with the OECD Commentary (cf. Point 1 of the Protocol to the DTA with Congo). In contrast, the (old) Belgium–Netherlands treaty has no such requirement, allowing Belgian domestic law to play a more dominant role.
According to the OECD Commentary, when a treaty requires that income is ‘taxed’ in the source country, it refers to actual taxation, not just a potential tax claim. The Court aligned its reasoning with the objective of tax treaties to prevent double non-taxation, not to encourage it. To our knowledge, this is the first time that the Court has explicitly referred to the Commentary on the OECD Model Tax Convention for the interpretation of a treaty provision. The use of the OECD Commentary is only mandatory for the interpretation of terms that are not explicitly defined in the DTA.
The provision is also included in the double tax treaties with Bahrain, Botswana, Macao, Macedonia, the Isle of Man, Malaysia, Moldova, Norway, Uganda, Rwanda, Russia, San Marino, and Tajikistan. Some of these treaties have not yet entered into force. It is also included in the Protocol to the new treaty with the Netherlands of 21 June 2023.
Proving Effective Foreign Taxation Essential
This decision has important practical implications for Belgian residents working abroad, especially in countries outside the OECD framework, like Congo. Merely showing that income was ‘subject to taxation’ abroad will not be enough. Taxpayers must provide clear evidence that the foreign income was actually taxed to secure exemption rights in Belgium.
Failure to do so means Belgium may tax the foreign income regardless of what the treaty otherwise stipulates. This sets a higher compliance burden on individuals working in jurisdictions with less stringent tax enforcement or informal exemption practices.
Stronger Shift Toward International Consistency
The judgment also signals a broader trend: Belgian courts are increasingly adopting international standards like the OECD Model Tax Convention and its Commentaries to interpret treaties, even when they are not formally binding under (Belgian) domestic law.
This pragmatic approach ensures that tax treaties serve their intended purpose: avoiding double taxation without opening the door to double non-taxation. The Court’s reliance on international interpretation tools strengthens legal certainty and harmonizes Belgium’s position with prevailing global tax norms.
A Warning for Treaty-Based Planning
Ultimately, this case serves as a clear warning to taxpayers: careful planning and detailed documentation are more important than ever when claiming treaty exemptions. Those relying on informal or administrative exemptions abroad, without real taxation, may find themselves ultimately exposed to Belgian taxation.