Malta: Double Tax Treaties

A treaty with Barbados was signed in December 2001. In September, 2004, Malta signed a DTAA with Iceland. In May, 2005, Malta and San Marino held discussions on the terms of a DTAA.

In March, 2006, Maltese Foreign Minister Michael Frendo and H.E. Dr. Mohammed Khirbash, Minister of State for Finance and Industry of United Arab Emirates signed an Agreement for the Avoidance of Double Taxation.

In March 2008, Tonio Fenech, Malta's Minister of Finance, Economy and Investment, initialled the text of a Treaty for the Avoidance of Double Taxation between Malta and the United States.

The Malta/US DTA was signed in the presence of US Ambassador Molly Bordonaro, on March 27th. Michael Mundaca headed the US Treasury delegation in Malta, and initialled the document on behalf of the United States.

The signing of the tax agreement was the culmination of a process which commenced with a meeting between Prime Minister Lawrence Gonzi and President George Bush in 2005. The agreement was ratified in November 2010 by both countries.

At the same time, the Maltese government also announced that the agreement between Malta and Singapore for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to taxes on income became operative on February 29, 2008.

This agreement had been signed on March 26th, 2006, and it is expected to contribute to a further expansion in trade between the two sides.

In September 2008, Malta's Finance Minister, Tonio Fenech, announced that his government had successfully concluded a protocol to the existing double taxation agreement with France.

"This protocol is beneficial to both countries as it will strengthen the already good relationship which exists and act as a catalyst to increase commerce and trade and encourage further cooperation between Malta and France," Fenech said in an address shortly before the official signing ceremony.

"These treaties ensure the removal of any potential trade barriers between respective countries by establishing internationally accepted provisions for the avoidance of double taxation on the same income. They also establish appropriate channels for exchange of information in a mutual effort to prevent fiscal evasion," Fenech explained.

"This protocol with France is a further enhancement to our comprehensive network of double taxation treaties and in the face of international developments will contribute to making our diversified economy even more attractive," he added.

In recent years, France has been one of Malta’s top three trading partners, and in 2006 France was Malta's largest export market. Statistics for the first six months of that year show that Malta imported around EUR134 million worth of goods from France and exported over EUR120 million, according to Fenech.

"Through this agreement we hope to improve quality trade even further, strengthen our communication and encourage investment," he said.

"This protocol should generate more economic activity through its commercial benefits and increased fiscal incentives. It is worth noting that Malta’s tax imputation system is fully compliant and accepted by the EU," Fenech observed.

In December 2008, Micheline Calmy-Rey, Swiss Minister of Foreign Affairs, visited Malta to sign a double taxation avoidance agreement with her Maltese counterpart, Tonio Borg.

Dr. Borg said that this agreement has the primary objective of making the two countries more attractive for entrepreneurs and will serve to improve Maltese-Swiss economic and commercial cooperation. He also said that the signing of the instrument represents a major and important step forward in the bilateral relations between both countries and represents a significant addition to Malta’s existing network of double taxation treaties.

Borg said that the agreement will enable both countries to exchange information for a more effective stand against tax evasion. The agreement was due to enter into force following ratification by both countries.

In December 2008, discussions between the Sultanate of Oman and Malta on a treaty for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income were held in Oman. An agreement was reached on most proposals contained in the draft text. A number of other clauses remained open for further discussions. For this purpose, a follow up meeting was due to be held in the near future.

It was also announced in December 2008 that Malta and Libya had signed a new double taxation agreement, which replaces the previous agreement, signed in 1972. The new Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to Taxes on Income between Malta and Libya was signed on December 28, 2008 at the Ministry of Foreign Affairs in Tripoli by Dr Joseph Cassar, Malta’s Ambassador to Libya and Ramadan Barq, Director for European Affairs at the Libyan Foreign Ministry.

The Convention entered into force following ratification by both countries.

In January 2009, the Maltese Minister of Finance, Economy and Investment, Tonio Fenech announced that an agreement on the terms for a double tax agreement with Qatar had been reached between the two countries.

The convention for the avoidance of double taxation and fiscal evasion with respect to income tax eliminates double taxation on mutual investments between the two countries and provides for the exchange of information in tax matters. The agreement promotes increased economic relations between the two parties and aims at increasing trading levels.

In a statement from the Maltese government, Fenech welcomed the agreement stating: “This agreement extends the double taxation treaty network which enables Malta to develop trade relations with other countries, attract inward direct investment and serves as an important platform for Maltese residents doing business in partner countries.”

In January 2009, the Irish Revenue Commission announced the ratification of a convention with Malta for the avoidance of double taxation and fiscal evasion with respect to income tax.

The agreement with Malta, which was signed on November 14, 2008, came into force following the Irish ratification of the convention January 15, 2009. The treaty came into effect on January 1, 2010.

The agreement covers taxes on the income of individuals and companies. It operates by either granting exclusive taxation rights to one or other country, or where the income or gain remains taxable in both, by providing that the country of residence of the taxpayer will relieve double taxation by allowing a credit for the tax paid in the other country.

The agreement with Ireland comprises of a nil rate of withholding tax on interest payments and reduced rates of withholding taxes on dividends, and royalty payments. The agreement also includes a non-discrimination article, which protects nationals of each country from discriminatory tax provisions in the other, and the exchange of information article, which is necessary to counter tax evasion.

In March 2009, Malta and Italy signed a protocol amending the existing double tax avoidance treaty between the two countries, which first came into force in July 1981.

The revised agreement was signed by Maltese Deputy Prime Minister and Minister of Foreign Affairs Tonio Borg in Rome, during the Maltese President’s official visit to Italy.

Speaking at the signing of the agreement, Tonio Borg stated: “When the protocol enters into force, it will reinforce the provisions of the existing Double Taxation Agreement with Italy and will further encourage and facilitate investment and business opportunities and commercial exchanges between Maltese and Italian entrepreneurs.”

Italian investment in Malta is strong with some 25 companies operating in various sectors either totally owned or in joint ventures. In 2009, Maltese imports from Italy totalled around EUR676.4m, with exports at EUR78.2m. Reciprocal tourism is also important, with 77,500 individuals visiting from the respective countries in 2010.

On 23 October 2009, Malta announced the imminent entry into force of a comprehensive double tax agreement with the Isle of Man. The agreement was ratified on January 19, 2010, with the Isle of Man’s Chief Minister, Tony Brown, notifying the government of Malta of its ratification.

Malta’s High Commissioner to the United Kingdom, Joseph Zammit Tabona, confirmed that Malta had completed its own ratification procedures, and as a consequence the agreement entered into force on February 26, 2010.

The double taxation agreement between the two governments is based on the model published by the Organisation for Economic Co-operation and Development (OECD).

According to the Manx government, the negotiation, signing and ratification of tax co-operation agreements demonstrates the two territories’ commitment to international standards and the effort to establish a global system based on co-operation between countries, transparency and effective exchange of information in tax matters. Both territories are currently placed on the OECD 'white list' of territories that have substantially-implemented the internationally-agreed OECD standard.

The table below shows the countries which have double-tax treaties with Malta.

Albania Australia Austria Bahrain Barbados Belgium Bulgaria Canada China Croatia Cyprus Czech Republic Denmark Egypt Estonia Finland France Georgia Germany Greece Hungary Iceland India Ireland Isle of Man Italy Jersey Jordan Korea Kuwait

Latvia Lebanon Libya Lithuania Luxembourg Malaysia Montenegro Morocco Netherlands Norway Pakistan Poland Portugal Qatar Romania San Marino Serbia Singapore Slovakia Slovenia South Africa Spain Sweden Syria Thailand Tunisia Turkey United Arab Emirates United Kingdom USA

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Malta Table of Treaty Rates

This table lists the percentage rates of withholding tax on payments made from Treaty countries to Malta.

Country	Dividends		% share to qualify	Interest	Royalties
	Minor Share-holding	Major Share-holding
Albania	15	5	25	5	5
Australia	15	15		15	10
Austria	15	15		5	10
Bahrain	nil	nil		nil	nil
Belgium	15	15		10	10
Bulgaria	nil	nil		15	10
Canada	15	15		15	10
China	10	5	25	10	10
Cyprus	15	15		10	10
Czech Rep.	5	5		nil	5
Denmark	15	nil	25	nil	nil
Finland	15	5	25	10	10
France	15	nil	10	5	10
Germany	15	5	25	10	10
Hungary	15	5	25	10	10
India	15	10	25	10	15
Ireland	15	5	10		5
Italy	15	15		10	10
Jordan	10	10		10	10
Korea	15	5	25	10	nil
Kuwait	15	5	25	10	nil
Latvia	10	5	25	10	10
Lebanon	nil	nil		nil	5
Libya	15	15		15	15
Luxembourg	15	5	25	nil	10
Malaysia				15	15
Netherlands	15	5	25	10	10
Norway	15	15		10	10
Pakistan	15	15	20	10	10
Poland	10	nil	10	5	5
Qatar	nil	nil		nil	5
Romania	5	5		5	5
San Marino	5	10	25	nil	nil
Slovakia	5	5		nil	5
Slovenia	5	15	25	5	5
South Africa	15	5		10	10
Sweden	15	nil	10	nil	nil
UK	nil	nil		10	10
USA	15	5		10	10

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Malta Other International Agreements

In January, 2004, the Guernsey Financial Services Commission and the Malta Financial Services Authority signed a Memorandum of Understanding which provides a framework for closer cooperation between the two regulatory bodies. The Memorandum provides a formal basis for cooperation, including the exchange of information and investigative assistance.

Peter Neville, Director General of the Commission, commented: "I am very pleased to have taken this step. I advised Malta on the setting up of its investment services regulation, and I have known the Maltese regulators for many years."

He added: "This Memorandum of Understanding between the Commission and the Malta Financial Services Authority is another step towards strengthening our relationship, providing a formal basis by which we can cooperate and exchange vital information."

In May, 2004, the respective chairmen of the Maltese and United Kingdom financial regulators signed a memorandum of understanding, facilitating the exchange of information and investigative assistance.

The agreement was signed by Professor Joe Bannister, head of the Malta Financial Services Authority and Callum McCarthy, the UK's Financial Services Authority chief in London, and lays down a formal basis for cooperation between the two bodies.

The MFSA and the FSA believe such co-operation will enable them to more effectively perform their functions," stated the text of the MOU.

Noting that the authorities of Malta and the UK have long cooperated on an informal basis, Professor Bannister explained that the growing complexity of the global financial system necessitated the inking of a formal agreement to combat the threat of financial crime.

In July, 2004, the Malta Financial Services Authority (MFSA) and the Gibraltar Financial Services Commission entered into a Memorandum of Understanding on exchange of information. The Memorandum was signed in Malta by MFSA Chairman Prof. J.V. Banister and Mr. Marcus Killick, Chairman and Commissioner of Gibraltars Financial Services Commission.

The MOU sets out to establish a formal basis for co-operation, including the exchange of information and investigative assistance in the fields of banking, insurance, investment services and the provision of professional trusteeship and company management services, and the exchange of information on supervisory practices and techniques.”

During Mr. Killick's visit, bilateral talks were held on how regulatory and supervisory collaboration between the two organizations may be further enhanced, including proposals for reciprocal visits by staff and other means of improving mutual understanding of the operations and supervisory techniques of the organizations.

In November, 2005, the Jersey Financial Services Commission and the Malta Financial Services Authority signed a Memorandum of Understanding, which provides specifically for the exchange of information between the two financial services regulators.

The Memorandum of Understanding constitutes a statement of intent by the regulators to create a formal framework for regulatory collaboration, investigative assistance and co-operation. Such collaboration should help to protect investors and depositors and to promote the integrity of financial services markets in the two jurisdictions.

The Memorandum of Understanding commits both regulators to providing help within the limits of each jurisdiction's laws, and setting up procedures and liaison points so that requests for information needed for tackling financial regulatory offences can be handled rapidly and efficiently. The agreement also provides an environment for the development of additional business between the two jurisdictions.

Commenting on the MoU, David Carse, Director General of the Jersey FSC noted: "I am delighted to sign this Memorandum of Understanding with the MFSA. It is the latest in a number established between the Commission and regulators in the European Union."

Meanwhile, Mr Carse's counterpart at the MFSA, Joe Bannister, observed: "This is part of our process to increase collaboration with recognised finance centres. There is extensive collaboration between practitioners in Malta and Jersey, and this Memorandum of Understanding will further enhance business between the two finance centres."”

In May 2008, the Malta Financial Services Authority and the Central Bank of Cyprus announced the signing of a Memorandum of Understanding.

The Memorandum of Understanding defines a general framework of mutual cooperation and exchange of information between the two authorities with a view to facilitating the consolidated supervision of cross-border establishments and ensuring the safe functioning of credit institutions in the respective countries, in accordance with their national laws and regulations.

The Cayman Islands Monetary Authority (CIMA) formally established bilateral ties with the MFSA on February 18, 2009.

Heads of the two financial services regulators sealed the terms of a Memorandum of Understanding (MOU) in a signing ceremony at CIMA. This agreement will govern cooperation and the exchange of information between the organisations; something that had already been taking place on an informal basis.

Signing on behalf of the MFSA, Chairman and President Professor Joseph Bannister said: “This is just a matter of formalising that relationship as Malta has a policy of signing MOUs with other financial-services jurisdictions. We have always had good relations with Cayman and exchanged information freely. Information has always been provided to us when required regardless of whatever sector of the financial services industry it has been.”

MFSA was established in 2002 as the single regulator for financial services activities in Malta. It regulates and supervises credit and financial institutions, investment, trust and insurance business and also houses the country's Companies Registry. In addition, MFSA, like CIMA, complies with the Basel Core Principles for Effective Banking Supervision and is a member of the International Association of Insurance Supervisors (IAIS). The MFSA has membership in the International Organization of Investment Securities Commission (IOSCO), as well as the Committee of European Securities Regulators (CESR). It has also signed at least 17 bilateral MOUs with regulators in other jurisdictions including United Kingdom, Dubai, Bermuda, Jersey, Isle of Man, Belgium, Netherlands, Portugal and Mauritius.

CIMA's Managing Director Cindy Scotland concurred with her Maltese counterpart, noting that CIMA has received a significant number of requests for assistance from MFSA in the past.

“We are pleased to formally recognise the bond of cooperation that has existed for some time and we look forward to continuing that. This MOU will create a framework that will facilitate greater mutual assistance between us - the regulators of financial services in Cayman and Malta - with regard to effectively carrying out our duties.”

On 26 January, 2010, the China Securities Regulatory Commission (CSRC) concluded a Memorandum of Understanding(MOU) Regarding Securities and Futures Regulatory Cooperation with Malta Financial Services Authority (MFSA) in Malta. The MOU was signed by CSRC Chairman Mr. Shang Fulin and MFSA Chairman Mr. Joe V. Bannister. It is hoped that the MOU signed between the two regulators will enhance exchanges of views and cooperation in the field of securities and futures supervision and promote sound development of capital markets in both countries.

On 14 June, 2010, the MFSA announced that it had successfully concluded and signed a memorandum of Understanding (“MoU”) with the Australian Prudential Regulation Authority (the "APRA"). The MoU establishes a framework for assistance, the sharing of supervisory information and cross-border co-operation in the area of banking and insurance supervision to the extent permitted by the laws and regulations in force in Malta and Australia. The agreement was signed by Prof. Joe V. Bannister, Chairman of the MFSA, and Dr John Laker, Chairman of the APRA.

On 1 December, 2011, the MFSA announced that had concluded and signed a Memorandum of Understanding with the National Bank of Slovakia. The MoU establishes a framework for assistance, the sharing of supervisory information and cross-border co-operation. This MoU expands on the previous MoU signed between the MFSA and the NBS in 2004, which was limited to information sharing in the field of banking supervision. The updated version of the MoU includes provisions on co-operation and information sharing in the fields of insurance supervision and the supervision of securities markets. The agreement was signed by Prof. Joe V. Bannister, Chairman of the MFSA, and Mr Jozef Makuch, Governor of the NBS.

On 13 March, 2012, the Qatar Financial Centre Regulatory Authority concluded and signed a memorandum of Understanding ("MoU") with the MFSA. It establishes a framework for assistance, the sharing of supervisory information and cross-border co-operation on the supervision and regulation of banking, financial and insurance-related activities as permitted by law and regulations in Malta and Qatar. MFSA chairman Joe Bannister and Qatar Financial Centre Regulatory Authority acting chief executive officer Michael Ryan signed the agreement.

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