Skip to main content Skip to search

Archives for DTT

Malta signs a tax treaty with Armenia

Malta signed a tax treaty with Armenia and provides for the following withholding tax rates in the case of payors resident in Armenia:

Dividends – 10% reduced to 5% if the investment in the Armenian entity exceeds 10%

Interest and Royalties– 5%

The treaty provides for the usual articles related to Mutual Agreement Procedures and Exchange of Information.

Read more

Malta signs a tax treaty with Ghana

Malta signed a tax treaty with Ghana and provides for the following withholding tax rates in the case of payors resident in Ghana:

 

Dividends – 6%

Interest – 7%

Royalties – 8%

Services fees – 12%

 

Malta does not impose any withholding taxes.  Elimination of double taxation is under the credit method.

 

The treaty provides for the usual articles related to Mutual Agreement Procedures and Exchange of Information.

Read more

Malta signs a tax treaty with Kosovo

The tax treaty between Malta and the Republic of Kosovo has been published in Legal Notice 168 of 2019.

As most other tax treaties, this tax treaty is also modelled on the OECD model convention.  No withholding taxes apply on dividends paid by a company resident in Kosovo if the holding percentage of the Maltese tax resident exceeds 10% and the shares are held for more than a year.  In other cases, the withholding tax rate on dividends is 10%.   Withholding tax on interest paid in Kosovo is limited to 5% of the gross amount of interest whereas no withholding tax applies on royalty payments.

Elimination of double taxation is provided for under the credit method.   As with other tax treaties, the treaty also contains the standard articles with respect to the Mutual Agreement Procedure and Exchange of Information.

[/vc_column_text][/vc_column][/vc_row]

Read more

Malta signs a tax treaty with Monaco

Malta published the tax treaty with the Principality of Monaco by means of Legal notice 70 of 2019.

The tax treaty is modelled on the OECD model convention, but there are no withholding taxes on dividends, interest and royalties given that both countries do not levy any withholding taxes.   The residence state will have jurisdiction to tax such income according to the tax legislation.  The treaty also provides that the source state will have taxing rights with respect to capital gains on immovable property and capital gains on shares whose value is derived as to more than 50% from immovable property.

The tax treaty also contains ‘standard articles’ with respect to the elimination of double taxation (under the credit method), mutual agreement procedure (MAP) and exchange of information.

Read more

Multilateral Instrument (MLI)

On 18 December 2018 Malta ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, more commonly referred to as the Multilateral Instrument (MLI).  Malta has expressed a number of reservations and these may be viewed by accessing  http://www.oecd.org/tax/treaties/beps-mli-position-malta.pdf

 

The MLI is an OECD initiative with the objective of providing concrete solutions for governments to close the gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide.  The MLI covers topics from transparent entities, dual resident entities, methods for elimination of double taxation as well as treaty abuse.

 

As a result of Malta’s implementation of the MLI, double taxation treaties must now be interpreted in light of the MLI provisions.  Counties adhering to the MLI provisions will have greater powers in ensuring that treaty abuse is limited and double non-taxation avoided.

Read more

The end of Single Malt structures

On the 27 November 2018, it was announced that an agreement was reached between Malta and Ireland which ends the Single Malt structures.  These were being used through the transfer of the management and control of Irish incorporated entities to Malta.   Through a Competent Authority Agreement, Malta and Ireland agreed that the purpose of the Double Taxation Convention (DTC) is to eliminate double taxation and not create the opportunity for double non-taxation.  Thus, deeming a company incorporated in Ireland but managed and controlled in Malta to be tax resident only in Malta, does not serve the purposes of the Double Taxation Convention as income was not being brought to charge in neither Malta nor Ireland when the income was not remitted to Malta.  Accordingly, such an Irish-incorporated company will be tax resident in Ireland and the relevant payments to it will come within the charge to Irish corporation tax.

 

The agreement will come into force with effect from taxable periods beginning on or after the expiration of a period of six months from the later of the dates on which the Multilateral Instrument (MLI) enters into force in Ireland and Malta.  Malta endorsed its agreement with reservations to the MLI through Subsidiary Legislation 123.183 and ratified the MLI on the 18th December 2018.

 

The Agreement provides the following:

From the coming into effect of the MLI with respect to the DTC between Ireland and Malta (the “Contracting States” in relation to that DTC), where – 

  • for the purpose of avoiding double taxation, under paragraph 3 of Article 4 of the Ireland-Malta DTC a company would be deemed to be only resident in one of the Contracting States, but
  • in the circumstances concerned – 
    • there is no double taxation to be avoided, and
    • it is reasonable to conclude that an opportunity for double non-taxation would otherwise arise,

then any such deeming of the company to be resident only in one of the Contracting States shall not be for the purposes of the Ireland-Malta DTC – as it would serve no such purposes.  It would be superfluous to, and redundant for, those purposes.  

The Competent Authorities shall notify each other in a timely manner where they become aware of circumstances to which this Competent Authority Agreement refers.

Read more

Malta signs a tax treaty with Mauritius

On 15 October 2014 Malta signed a tax treaty with Mauritius.  The treaty was published by means of legal notice 409 of 2014.

The tax treaty is modelled on the OECD model convention.  However, it is interesting to note that no withholding tax is levied on dividends, interest and royalties and therefore the source state will not tax dividend income, interest or royalties and the residence state will have exclusive jurisdiction to tax such income.  The treaty provides that the source state will have taxing rights with respect to capital gains on immovable property and movable property.

The tax treaty also contains ‘standard articles’ with respect to the elimination of double taxation (under the credit method), mutual agreement procedure, exchange of information and a rather detailed article with respect to assistance in the collection of taxes.

Read more

Malta signs a tax treaty with Moldova

Malta and Moldova signed a double taxation agreement.  The agreement was signed on 10 April 2014 between Foreign Minister George Vella and his Moldovian counterpart Natalia Gherman.

Malta and Moldova also signed a joint declaration on European Integration.  Malta promises to offer Moldova its assistance in many areas including tourism, education, and ICT based on its own experience of recent European integration.

Read more

Malta signs a tax treaty with Macau

Malta and Macau agreed to work together to prevent tax evasion and tax avoidance.  Macau’s Secretary for Economy and Finance Francis Tam Pak Yuen and the Maltese ambassador to China, Joseph Cassar, signed a tax treaty in Beijing on May 30.

All the legal arrangements between both jurisdictions have been completed and the treaty is likely to come into force in January 2014.

The treaty allows the authorities in Macau and Malta access to other’s data on the financial position and income of their citizens that owe tax, and may reveal undeclared assets and earnings.  Such data will include information relevant “to the determination, assessment and collection of taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters”, the treaty says.  The authorities may share information held by banks or other financial institutions.  They may share information about the direct or indirect ownership of companies, trusts and foundations, and about partnerships.

Read more