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I. NATIONAL ENTERPRISES OPERATING ABROAD

In principle, a taxpayer who has his head office or principal establishment in Belgium and other establishments abroad is taxed on the whole of the profits earned in Belgium and abroad. Tax is assessed on the basis of the general balance-sheet and of the special profit-and-loss accounts relating to the business of the separate foreign establishments, the foreign profits being taxed in Belgium at a reduced rate if already taxed abroad.

According to the Conventions concluded with the Grand-Duchy of Luxemburg, France and Italy, industrial, mining, commercial and agricultural enterprises are taxable in each country in proportion to the income earned by the permanent establishments therein.

This procedure constitutes a departure from the normal rule. The Belgian authorities will therefore no longer tax the profits of establishments in the Grand-Duchy, France and Italy, but the profits of establishments situated in other non-contracting States will continue to be subject to ordinary Belgian law.

Allocation will be based on regular accounts. If there are no regular accounts showing the income separately and accurately, the competent authorities of the contracting States will, if need be, agree upon certain rules of apportionment.

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