Ireland - Malta Double Taxation Agreement

Dr Trudy Marie Attard | 11 Oct 2011

Ireland  Malta Double Taxation Agreement

The Double Tax Agreement between Ireland and Malta is set to have a positive impact for overseas property investors and those seeking to trade between the two countries. After tough negotiations, Malta signed its first convention on the avoidance of double taxation with Ireland on the 14th of November 2008. The convention was signed in Rome by Ambassadors Walter Balzan and Sean O’Huiginn on behalf of their respective governments. The treaty was subsequently ratified by the two states on the 15th of January 2009 and became effective as of the 1st of January 2010. Malta has transposed the treaty into domestic legislation by way of Legal Notice 502 of 2008.

Malta’s Foreign Affairs Minister Tonio Borg said that the signing was an important development in bilateral relations with Ireland and one which would further consolidate Malta’s network of tax agreements already in place with other European countries. He said that the agreement was the result of long and intensive technical negotiations.

The provisions of the treaty are generally structured on the 2008 OECD Model Tax Convention, however the text of the treaty contains minor deviations from the Model Convention. The convention with Malta 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.

Furthermore it is worth noting that, the Irish government has recently extended the domestic dividend withholding exemption to qualifying shareholders which are tax resident in an EU Member State or a country which has signed a double tax treaty with Ireland. The treaty and the amendment to the Irish domestic tax rules certainly create interesting opportunities for Malta to be used as holding location particularly on the basis of Malta’s wide participation exemption regime and its exemption from dividend withholding tax to non-resident shareholders.

The island gives international firms an excellent services and communications infrastructure and offers the benefits of an exemplary regulatory environment plus a network of approximately 60 double taxation agreements. Malta has a lot to offer; a stable Government, good tax system, excellent infrastructure, a skilled workforce of English speaking locals and an enviable lifestyle together with a clement climate.


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