Malta Double Tax Treaties
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Malta Double Tax Treaties

DeltaQuest can assist you whether you are an individual or corporate entity in setting up a Malta trust or Malta foundation to achieve complete and comprehensive asset protection. For more information about Malta double tax treaties, please read the information below. Alternatively, to establish a Malta Trust or foundation please complete our Application Form, or if you require further information please Contact Us.

Relief from double taxation is available in Malta under the domestic provisions of the Income Tax Act if the foreign tax had been suffered in a country with which Malta has a double tax treaty or in respect of British Commonwealth income tax. The Income Tax Act provides for two further systems of relief from double taxation in Malta:

• Unilateral Relief
• Flat-Rate Foreign Tax Credit.

Unilateral Relief

Malta allows relief from double taxation on a unilateral basis where overseas tax is suffered on income received from a country with which Malta does not have a tax treaty. The overseas tax suffered is allowed as a credit against the tax chargeable in Malta on the gross amount. The credit shall not exceed the total tax liability in Malta on the receipt.
When claiming unilateral relief, the recipient of the income must prove the following to the satisfaction of the Commissioner:

• that the income arose from overseas;
• that the income suffered overseas tax; and
• the amount of that tax.

Flat-Rate Foreign Tax Credit

The flat-rate foreign tax credit is available to a Maltese company which receives income or capital gains from overseas allocated to its Foreign Income Account. A certificate from the auditor stating that the income falls to be allocated to the Foreign Income Account is sufficient for this purpose. The flat-rate foreign tax credit is calculated at 25% of the amount of the overseas income or gain received by the company, before deductions. The income plus the credit (less deductible expenses) is subject to full Maltese income tax with relief for the deemed credit.

The mechanics of the relief are demonstrated in the following examples:

The provisions regarding unilateral relief are available where double taxation relief under a double tax treaty and relief in respect of British Commonwealth income tax are not available to the person making the claim. The provisions regarding the flat-rate foreign tax credit are applied where none of the other reliefs of double taxation is available.

Malta benefits from extensive double tax treaties network, namely :

Albania (02.05.00), Australia (09.05.84), Austria (29.05.78), Barbados (05.12.01), Belgium (28.06.74), Bulgaria (23.07.86), Canada (25.07.86), China (02.02.93), Croatia (21.10.98), Cyprus (22.10.93), Czech Republic (21.06.96), Denmark (20.12.98), Egypt (20.02.99), Estonia (03.05.01), Finland (30.10.00), France (05.07.77), Germany (08.03.01), Hungary (06.08.91), India (08.09.94), Italy (16.07.81), Korea (25.03.97), Kuwait (24.07.02), Latvia (22.05.00), Lebanon (23.02.99), Libya ( 05.10.72), Libya Protocol Signed (28.04.95), Lithuania (17.05.01), Luxemburg (29.04.94), Malaysia (03.10.95), Netherlands (18.05.77), Norway (02.06.75), Pakistan (08.10.75), Poland (07.01.94), Portugal (26.01.01), Romania (30.11.95), Slovakia (07.09.99), Slovenia (08.10.02), South Africa ( 16.05.97), Sweden (09.10.95), Switzerland (30.03.87), Syria (22.02.99), Tunisia (31.05.00), UK (12.05.94), USA (11.03.97).

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