ARTICLE 28 (ENTRY INTO FORCE)

This Article contains the rules for bringing the Convention into force and giving effect to its provisions.

Paragraph 1

Paragraph 1 provides for the ratification of the Convention by both Contracting States according to their constitutional and statutory procedures. Each Contracting State will use the diplomatic channel to notify the other when it has completed the required procedures. The notification will be accompanied by an instrument of ratification.

In the United States, the process leading to ratification and entry into force is as follows: Once a treaty has been signed by authorized representatives of the two Contracting States, the Department of State sends the treaty to the President who formally transmits it to the Senate for its advice and consent to ratification, which requires approval by two-thirds of the Senators present and voting. Prior to this vote, however, it generally has been the practice for the Senate Committee on Foreign Relations to hold hearings on the treaty and make a recommendation regarding its approval to the full Senate. Both Government and private sector witnesses may testify at these hearings. After the Senate gives its advice and consent to ratification of the protocol or treaty, an instrument of ratification is drafted for the President's signature. The President's signature completes the process in the United States.

Paragraph 2

Paragraph 2 provides that the Convention will enter into force upon the exchange of instruments of ratification. The date on which a treaty enters into force is not necessarily the date on which its provisions take effect. Paragraph 2, therefore, also contains rules that determine when the provisions of the treaty will have effect.

Under subparagraph 2(a), the Convention will have effect with respect to taxes withheld at source (principally dividends, interest and royalties) for amounts paid or credited on or after the first day of the second month following the date on which the Convention enters into force. For example, if instruments of ratification are exchanged

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on April 25 of a given year, the withholding rates specified in paragraph 2 of Article 10 (Dividends) would be applicable to any dividends paid or credited on or after June 1 of that year. This rule allows the benefits of the withholding reductions to be put into effect as soon as possible, without waiting until the following year. The delay of one to two months is required to allow sufficient time for withholding agents to be informed about the change in withholding rates. If for some reason a withholding agent withholds at a higher rate than that provided by the Convention (perhaps because it was not able to re­ program its computers before the payment is made), a beneficial owner of the income that is a resident of the other Contracting State may make a claim for refund pursuant to section 1464 of the Code.

For all other taxes, paragraph 2(b) specifies that the Convention will have effect for any taxable period beginning on or after January 1 of the year following entry into force.

Paragraph 3

Paragraph 3 provides that subparagraph (f) of paragraph 5 of Article 21 (Limitation on Benefits) is not effective until January 1, 2011. That subparagraph requires that a headquarters company be subject to the same income tax rules in its state of residence as a resident company engaged in the active conduct of a trade or business in such state. Belgian law is in transition and as of January 1, 2011, this subparagraph will met.

Paragraph 4

Paragraph 4 provides that the prior Convention generally ceases to have effect with respect to any tax as of the date this Convention takes effect with respect to that tax in accordance with paragraphs 2 and 6.

Paragraph 5

As in many recent U.S. treaties, however, paragraph 5 provides an exception to the general rule of paragraph 4. Under paragraph 5, if the prior Convention would have afforded greater relief from tax than this Convention, the prior Convention shall, at the election of any person that was entitled to benefits under the prior Convention, continue to have effect in its entirety for a twelve-month period from the date on which this Convention otherwise would have had effect with respect to such person.

Thus, a taxpayer may elect to extend the benefits of the prior Convention for one year from the date on which the relevant provision of the new Convention would first take effect. During the period in which the election is in effect, the provisions of the prior Convention will continue to apply only insofar as they applied before the entry into force of the Convention. If the grace period is elected, all of the provisions of the prior Convention must be applied for that additional year. The taxpayer may not apply certain, more favorable provisions of the prior Convention and, at the same time, apply other, more favorable provisions of this Convention. The taxpayer must choose one regime or the other.

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The prior Convention shall terminate on the last date on which it has effect with respect to any tax in accordance with the provisions of paragraphs 4 and 5 of Article 28.

Paragraph 6

Paragraph 6 provides that the provisions of Article 25 (Exchange of Information), have effect from the date of entry into force, without regard to the taxable period to which a particular matter relates. Accordingly, the powers afforded the competent authority under these articles apply retroactively to taxable periods preceding entry into force.

Paragraph 7

Paragraph 7 provides a specific effective date for purposes of the binding arbitration provisions of Article 24 (Mutual Agreement Procedure). Paragraph 7 provides that paragraph 7 and 8 of Article 24 are effective for cases (i) that are under consideration by the competent authorities as of the date on which the Convention enters into force and (ii) cases that come under such consideration after the Convention enters into force. In addition, paragraph 7 provides that the commencement date for cases that are under consideration by the competent authorities as of the date on which the Convention enters into force is the date the Convention enters into force. As a result, cases that are unresolved as of the entry into force of the Convention will go into binding arbitration no later than two years after the entry into force of the Convention, if the cases are not otherwise resolved through the competent authority procedure.