Hong-Kong - Malta Double Tax Agreement

Dr. Trudy Marie Attard | 26 Nov 2012

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Malta and Hong Kong signed an agreement on 8 November 2011 for the avoidance of Double Taxation and for the prevention of fiscal evasion with respect to taxes on income. The signatories where Malta’s ambassador to China, Joseph Cassar and Prof. K.C. Chan, secretary for financial services and the treasury. The treaty came into force as from 18 July 2012.  It will have effect in Hong Kong for any year of assessment beginning on or after 1 April 2013, while in Malta it will ve effective as of 1 January 2013.

Prior to this double tax agreement, any income earned in Hong Kong by a Maltese resident was subject to tax both in Hong Kong and in Malta. The treaty removes the dual taxation of income and also addresses fiscal evasion matters. It allocates taxing rights between the two states depending on the nature and source of the income. It is intended to provide investors from both countries with more attractive conditions for investment in Malta or Hong Kong . 

The tax incentives are expected to boost investment levels between the two areas and encourage a larger number of firms to either increase their presence or open up new offices in the other state. The treaty aims to provide investors an understanding of their potential tax liabilities before they embark on cross-border investment activities. It maps out the allocation of taxing rights between Hong Kong and Malta and the tax relief options on several types of income.

The provisions of this DTT are in line with current internationally accepted standards and the negotiations took into account the Organization for Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital.

In October 2012 the Maltese-Chinese Chamber of Commerce signed a cooperation agreement with the Hong Kong Chamber of Commerce to maintain and develop good relations and promote cross-border business between Malta and Hong Kong. It was held that such cooperation should base itself on the new Double Taxation Avoidance Agreement between Hong Kong and Malta. The implications of such agreement are important and far-reaching, but its existence needs to be promoted. This development should be of great interest to the fast growing financial services sector in Malta and affiliated businesses.

[Full List of Malta Double Taxation Agreements]


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