Malta-Belgium Double Taxation Treaty

Malta has signed numerous double tax treaties during the years, most of them with European countries with which the Government had very good trading relations. One of these countries is the Kingdom of Belgium with which Malta has signed a double taxation treaty with in 1974 and enforced it in 1976. The agreement provides for the avoidance of double taxation with respect to the following taxes:

• -          the income tax applied to individuals, the corporate and income tax on companies, the income tax applied to non-residents in Belgium and special levy applied to individuals;
• -          the income tax in Malta.

The Malta – Belgium double taxation treaty was last amended in 2003 because of the changes brought to the taxation systems in both countries. Our lawyers in Malta can offer information about the taxation of Belgian companies in this country.

Provisions of the Malta – Belgium double tax agreement

The first articles of the treaty for avoidance of double taxation between Malta and Belgium establishes what the term “fiscal domicile” means. According to Article 4, any individual paying taxes in Malta or Belgium is considered a tax resident of the said country. When it comes to companies, Belgian and Maltese companies registered or with management places in one of the two countries is considered a tax resident of the respective states.

Most Maltese double taxation agreements also provide for permanent establishments of foreign companies here, which include branch offices, factories and other workshops. In the double taxation treaty with Belgium, these entities will be taxed in Malta only on the incomes arisen here.

Avoidance of double taxation in Malta and Belgium

The Malta – Belgium double tax treaty establishes that the avoidance of double taxation will occur through tax credits or exemptions based on the source of income. The agreement also provides for the following special rates related to dividend, interest and royalties payments:

• -          a 15% tax rate on dividend payments;
• -          a 10% rate on interest payments;
• -          a 10% rate on royalties payments.

For information about the changes brought to the Malta – Belgium double taxation treaty, please feel free to contact us. You can also rely on our services if you want to register a company in Malta.