Malta s Double Treaties February 216
In order to encourage the growth of international trade including that of financial services, successive Maltese governments have sought to conclude double tax treaties with important trading partners as well as with emerging countries. This policy is expected to continue in the future. To date, treaties are in force with 7 countries. The following table illustrates the treaty and non-treaty withholding tax rates when dividends, interest and royalties are paid from treaty countries to Maltese residents. In general there is no withholding tax under Maltese law on dividends, interest and royalties even where a treaty allows such tax. rates quoted in the table below do not take into account provisions of European Union Law which may be applicable. Country Dividends Interest Royalties Minority Majority Required for Majority Rates Rates Albania 1 2 1 1 1 Australia 1 1 /3 a 1 1 1 3 Austria 1 1 2 /1 A 2 Bahrain Barbados 1 /1/2 b 1 / A 1 Belgium 1 1 27 /1 B 27 /1 A 27 Bulgaria - 1 1 1 Canada 1 1 2 1 /2 c /1 C 2 China 1 2 1 1 1 1 D 1 Croatia 12 1 1 Cyprus 1 1 1 1 /1 d Czech Republic 1 1 1 Denmark 1 2 E 1/27 k 2 Egypt 1 1 /1 v 1 2 12 2 Estonia 1 2 2 1 1 1 Malta s Double Treaties//February 216 Page 2
Country Dividends Interest Royalties Minority Majority Required for Majority Rates Rates Finland 1 1 2 France 1 1 3 /1 Georgia Germany 1 1 26.38 /26.38 Greece 1 2 1 8 Guernsey Hong Kong Hungary 1 Iceland 1 India 2 A 33.33 1 1.83 1 8 2 3 4.9e 2 1 1 1 18 1 2 1 1 1 2 1 1 Ireland 1 1 2 2 /2f Isle of Man Israel 1 1 2/3 Italy 1 1 26 1 26 /1 Jersey Jordan 1 1 /1o 1 1 1 Korea 1 2 2 /1 2 2 Kuwait /1 1 Latvia 1 2 1 1 Lebanon 1 /1m 7. Libya 1 1 Liechtenstein Lithuania 1 2 1 1 1 1 1 Luxembourg 1 2 1 1 Malaysia /1 1 1 1 Mauritius 1 1 Mexico 1 //1 1/1/21/3/4t 1 /2/3/4u Moldova 6 12 Montenegro 1 2 9 1 9 /1 Morocco 1 6. 2 1 1 1 1 1 Netherlands 1 2 1 1 /1A Norway 1 1K 2 Pakistan - 1 2 1 1 1 /1G 1 Poland 1 1K 19 2 2 Portugal 1 1 2E 2 1 2 1 2 Qatar 7 Romania 16 16 16 Russia 1 2 1 9,1,2r 2 San Marino 1 2 13 Saudi Arabia /7L 1 Malta s Double Treaties//February 216 h j g / l /26. F H I S s 26. G 22.i 12 J 9 Page 3
Country Dividends Interest Royalties Minority Majority Required for Majority Rates Rates Serbia 1 2 2 1 2 /1 J 2 Singapore - - 7/1 M 1 1 1 Slovakia 19 19 Slovenia 1 2 1 1 1 South Africa 1 1 1 /1 F 1 1 1 Spain 2 2 2 24 Sweden 1 1 3 Switzerland 1 1 N 3 /1 O /3/3 o Syria - - 1 7. 18 7 Turkey 1 1 2 1 1-18 p 1 2 Tunisia 1 1 12 2 12 1 UAE UK - - 1 2 1 2 Uruguay 1 L 2 P 7 1 3//12 q /1 Q 12 USA 1 1 3 1/1 R /3 1 3 A. corresponding to 7 of the gross amount of the royalties B. Held for a 12 month period prior to the date the dividends are declared C. applies to interest paid by the Government of that Contracting State, a political subdivision, a local authority or the Central Bank thereof and interest paid to a resident of the other Contracting State on corporate bonds traded on a Stock Exchange in the first- mentioned State. Treaties signed but not yet in force Curacao and Ukraine and protocol to the treaty with Belgium. Treaties being (re)negotiated Azerbaijan, Bosnia and Herzegovina, Oman and Thailand. Treaty A. for the use of, or right to use copyrights of literary, artistic or scientific work B. for interest on commercial debt-claims C. for the production or reproduction of literary, educational, dramatic, muscial or artistic work D. on royalties derived as a consideration for the use of, or right to use, industrial, commercial, or scientific equipment shall not exceed 1 on an amount Malta s Double Treaties//February 216 D. for the use of or right to use, any copyright of literary, artistic or scientific work, cinematographic films or tapes for television or broadcasting E. for interest paid in connection with the sale on credit of any industrial, commercial or scientific equipment or paid in connection with the sale on credit of any merchandise by one enterprise to another F. The rate applies to interest paid on loans as defined in the Malaysian Income Act G. applies to the use of or, the right to use copyright of literary, artistic or scientific work including cinematograph films or films or tapes used for radio or television broadcasting H. Held for an uninterrupted period of 24 months. This period can also be met after the payment of dividends is made I. applies to royalties paid for the use of or the right to use, industrial, commercial or scientific equipment J. 7 applies if the interest is received by a bank, 1 in all other cases Page 4
K: Held for an uninterrupted period of 24 months. This period can also be met after the payment of dividends is made L: applies to royalties paid for the use of or the right to use, industrial, commercial or scientific equipment M: 7 applies if the interest is received by a bank, 1 in all other cases N: Held for at least 12 months and provided both companies: are subject to and not exempted from tax; are not resident for tax purposes in a third state under any double taxation agreement; and have adopted the form of a limited liability company. O. applies to interest paid between associated companies and to interest paid in connection with the sale on credit of any industrial, commercial or scientific equipment; in connection with the sale of any merchandise by one enterprise to another enterprise; or on any loan of whatever kind granted by a bank P. Lower rate of also applies if the beneficial owner is a Collective Investment Scheme Q. for the use of or the right to use, any industrial, commercial or scientific equipment, and copyright of literary, artistic or scientific work R. 1 applies to interest that does not quality as portfolio interest S. applies in four given scenarios, applies to interest from loans granted by certain banks, 1 applies in all other cases a. for fully franked dividends, distributions of conduit income, etc. 3 for unfranked dividends b. applies if paid out of foreign sourced income, 2 applies if paid out of profits that are exempt or have not been taxed and 1 applies in all other cases c. applies to arm s length paymentss d. applies to film royalties and 1 applies to any other royalties e. 3 of profits multiplied by the applicable corporate tax rate f. 2 applies to patent royalties g. 2 applies where the shareholding is less than 1 and where the payor is a company resident in Israel whose shares are listed and traded on a stock exchange. 3 applies where the shareholding is equal to or more than 1. h. A final dividend distribution tax is payable by the dividendpaying company at 1 i. Royalties paid to non-resident companies are subject to a withholding tax of 3 on 7 of the gross royalty i.e. resulting in a final tax of 22. j. 1 applies to dividends distributed by fund managers, investment custodians and corporate bodies. k: 1 if less than 1 holding and exchange of information; 27 in other cases. l: generally and 26.38 an interest from convertible bonds, profit-sharing bonds and participation bans amongst others m: The rate applies to interest on debts, deposits and guarantees n. 1 applies when distributed by mining, telecommunications, insurance, re-insurance and financial companies and banks o. for film copyright royalties p. 3 applies to interest paid by financial institutions out of deposits in domestic currency or indexed units with more than a 1-year term, interest on bonds with a term of more than 3 years issued through a public offer and quoted on the stock exchange and on income certificates issued by financial trusts through public subscription and stock price for periods which exceed 3 years, applies to interest from 1-year term or less deposits and 12 applies to any other interest q. 9 for certain mortgage and long-term municipal bonds, 1 for state and other municipal bonds, and 2 in other cases. r. applies to interest income paid to a non- resident company from traded government bonds, loans provided by a foreign resident to the state in foreign currency, and deposits of foreign currency bank accounts, provided that no business or profession is conducted in Israel by the foreign resident. 26. applies in all other cases s. 1 applies to interest paid to financial institutions, or to publicly traded securities, 1 applies to reinsurance companies, 21 applies to non-resident suppliers of machinery and equipment or paid by financial institutions, 4 applies to entities subject to preferential tax regime, 3 applies to other interest payments t. applies to railroad wagons, 3 applies to patents, trademarks and advertising, 4 applies to royalties paid to entities subject to preferential tax regime and 2 applies to other royalties u. applies under the participation exemption rules; 1 in other cases Malta s Double Treaties//February 216 Page
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