20th July 2007

Malta publishes tax treaty with Morocco

On 20th July 2007, Malta published its tax treaty with the Kingdom of Morocco.  The tax treaty is based on the OECD model and provides for a reduced treaty rate of 6.25% on dividends paid by a company which is resident of Morocco to a Maltese company which owns at least 25% of the capital of the company paying the dividend.  The reduced treaty rate on dividends is 10% in all other cases.  Any dividends paid by a Maltese company are not subject to any withholding tax since Malta does not impose withholding tax on any payments irrespective of the recipient’s tax status.

Non-government interest and royalties paid by a resident of Morocco is subject to a reduced treaty rate of not more than10%.  Once again Malta does not impose any withholding tax on interest and royalties.

With this treaty the total number of treaties in force is now 45.  Malta now has treaties with Albania, Australia, Austria, Barbados, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Hungary, Iceland, India, Italy, Korea, Kuwait, Latvia, Lebanon, Libya, Lithuania, Luxembourg, Malaysia, Morocco, Netherlands, Norway, Pakistan, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, South Africa, Spain, Sweden, Syrian Arab Rep., Tunisia and the United Kingdom.

Ten other treaties are in the pipeline and are awaiting signature, ratification or both.  These are treaties with Greece, Ireland, Jordan, Russia, Serbia & Montenegro, Singapore, Thailand, Turkey, Ukraine and the United Arab Emirates.