The tax treaty between Malta and Poland will be amended and the main changes will include:

  • Widening of the definition of dividends in Article 10 to include other forms of income which is similar in nature to dividend income;
  • Reduction in the Polish withholding tax rate on interest from 5% to 4%;
  • Article 12 on “Royalty income” will be replaced to also include payments for technical services;
  • Changes to Article 13 on “Capital Gains” to widen the scope of this article to other investment vehicles which are comparable to the transfer of shares;
  • Article 16 on “Director fees” will be replaced so as to widen the scope of this article to include members of a supervisory board or other similar organs;
  • Paragraph 1 of Article 23 on “Elimination of double taxation” will be replaced.  Poland will no longer exempt Malta taxed income but instead will give credit of the Malta tax paid;
  • Paragraph 2 of Article 25 on “Mutual Agreement procedure” will include procedures in connection with arbitration;
  • Article 26 on “Exchange of information” will be widened and a new article inserted on the Prevention of Treaty Abuse.