Malta and Liechtenstein Sign Double Tax Treaty
News    ·   22-10-2013

AUTHOR: Donald Vella, Kirsten Cassar

Malta and Liechtenstein signed a double tax treaty for the elimination of double taxation in New York on 27 September 2013. The treaty is based on the Organisation for Economic Cooperation and Development's (OECD) Model Convention.

The treaty delves into clarifying and governing the entitlement to tax treaty benefits of Liechtenstein pension funds, charitable organisations, and investment funds. The two countries have also agreed to waive withholding taxes on dividends, interest, and royalties. Additionally, the tax treaty guarantees national taxing rights for the taxation of natural persons, and includes provisions for the exchange of information. The residency of trusts is regulated separately.

Finally, the tax treaty makes provision for an arbitration clause to ensure that within the framework of a specified process, a binding solution is achieved for both treaty partner states in the event of an interpretation or application dispute.

The treaty requires the parliamentary approval of both jurisdictions and is expected to apply from 1 January 2014.

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