Malta Double Taxation Agreements

All Maltese government have sought to provide a beneficial environment for foreign investors setting up companies in the country which is why they have concluded over 70 double taxation agreements with other countries. Until now Malta has enforced over 60 of its double taxation treaties, the rest of them pending ratification. Once concluded, a double tax treaty will override the imposition of a Maltese tax.

For details about all the countries Malta has concluded double taxation agreements with you can ask our Maltese lawyers.

The content of Maltese double taxation agreements

Most of Malta’s double tax treaties follow the OECD standards and provide for the following:

• - the taxes which fall under the double taxation agreement in both countries;
• - how the residency of the individuals or companies covered by the double tax treaties is established;
• - the mechanism under which the avoidance of double taxation will occur (tax credits, exemptions or refunds);
• - other special provisions such as the enforcement and termination of agreement.

Also, most of the double tax treaties signed by Malta have been amended in order to provide for the exchange of tax information.

Permanent establishments under Malta’s double tax conventions

The following entities are considered permanent establishments according to the conventions on double taxation in Malta:

• - fixed business places, such as branches, offices or management places;
• - factories, construction sites, workshops, and other facilities of this type;
• - gas and oil wells, mines and quarries can also be deemed as permanent establishments;
• - land plots used for agricultural and pastoral activities are also considered permanent establishments.

These sites must function at least 183 days in a calendar year in order to be permanent establishments in Malta. The foreign citizens who want to immigrate to Malta and benefit from these treaties may contact our immigration lawyers who will offer legal advice and information.

Tax rates under Maltese double taxation treaties

Most of Malta’s double taxation agreements employ similar tax rates and exemption. Also, all double taxation treaties cover the same taxes. Under Maltese double taxation treaties, foreign investors from countries that have concluded such agreements will benefit from:

• -          reduced tax rates when repatriating profits,
• -          tax exemptions on certain incomes when distributed by Maltese subsidiaries or branches.

Under most Maltese double taxation agreements, the following reduced tax rates apply:

• -          the taxation of dividends ranges from 0% to 15% depending on the agreement signed,
• -         the taxation of royalties ranges between 0% and 10%, however certain exemptions apply;
• -         the taxation of interests ranges from 0% to 15%, just like in the case of dividend payments;
• -         other types of incomes can also be subject to reduced tax rates.

For information related to the country’s taxation system you can refer to our law firm in Malta. Foreign business owners can rely on us for applying for EORI numbers in Malta.

Countries Malta has signed double tax treaties with

Among the countries Malta has signed double tax treaties with are:

• -          in Europe: Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Finland, France, Germany, Greece, Italy, Latvia, Luxembourg, Netherlands, Switzerland;
• -          in the Middle East: Bahrain, Hong Kong, Singapore, Qatar, Saudi Arabia, The United Arab Emirates.

Malta has also signed double taxation agreements with Russia, China, the United States of America, Canada, Australia and few African and South American countries. If you want to know if your country has a double taxation agreement with Malta and what its provisions are you can contact our lawyers. You can also request our Maltese lawyers’ services if you want to set up a company in this country.