ARTICLE 14

Independent Personal Services

The existing Convention provides that an individual resident of one State shall be exempt from tax by the other State if he meets either of two conditions:

(a) he is present in that other State for not more than 183 days and his compensation is for services performed as a worker or employee of, or under contract with, a resident of the first State who bears the actual burden of the remuneration or

(b) he is temporarily present within that other State for a period or periods not exceeding 90 days during the calendar year and the compensation received for such services does not exceed $3,000 in the aggregate.

The 90-day, $3,000 rule under the existing Convention does not apply to remuneration of "administrateurs," "commissaires," or "liquidateurs" of,. or of other individuals exercising similar functions in, corporations created or organized in Belgium, nor to remuneration of officers and directors of United States corporations.

The proposed Convention generally deals with personal services in two articles and creates a distinction based upon whether the services are independent or dependent personal services. The proposed Convention also provides a special rule for independent individuals who are artists or athletes, and a separate Article dealing with directors' fees. Thus, for example, a doctor or lawyer typically renders independent personal services. Also an entertainer who under common law concepts is an independent contractor is considered as rendering independent

personal services.

Generally, under Article 14 of the proposed Convention, income earned by an individual resident of one State from independent personal services performed in the other State may not be taxed in that other State. However, such income will be subject to tax in the State of source ( i.e ., where the services are performed) if the recipient is present in that State for a period or periods aggregating 183 days or more in the taxable year or if the individual maintains a fixed base in that other State for a period or periods aggregating 183 days or more in the taxable year and the income is attributable to such fixed base.

Independent personal services means services performed by an individual for his own account where he receives the proceeds or bears the losses arising from such services. Commercial, industrial, or agricultural activities are not considered independent personal services and the income therefrom is taxed as industrial or commercial profits under Article 7 (Business Profits).

Thus, for example, if a physician, resident in one State, has an office available in the other State for a period aggregating 183 days or more during the taxable year, the income he earns from the performance of services within the other State will be subject to tax in that other State regardless of whether he is physically present in that other State for 183 days or more during the taxable year and regardless of whether others make use of his office in his absence.

An individual who derives income from independent personal services as a public entertainer is nevertheless subject to tax in the other State if his stay in such State exceeds 90 days during the taxable year or his income is in excess of $3,000 or its equivalent in Belgian francs during the taxable year.