Double Taxation Relief (Taxt$ on IDCome) (Kingdom of Sweden) (kingdomofsweden)

L.N. S3 0f 1988

lNCOME TAX ACI', 1948

(ACI' NO. LlV OF 1948)

Double Taxation Relief (Taxt$ on IDCome) (Kingdom of Sweden)

(Amendment) Order , 1988

IN exercise of the powers conferred by sectioll 68A of the Incomc

Tax Act, 1948, the MinisterofFi nancc has made thefollowingorder:-

I. This crde r may be ci ted as the Double Taxation Relief (Taxes Citation.

on Income) (Kingdom of Sweden) (Amendment) Orde r, 1988 and shall

be read and construed asone wi th the DoubleTa;tation Relief(Ta;teson I..N.IJI

of 1976.

Income) (Kingdom of Sweden) Order. 1976.

PROTOCOL

AMEND ING THE AG REEMENT BElWE EN

MALTA AND SWED EN

FOR T HE AV OID ANCE O F DOU BLE T AXATI ON

WITH RES PECf TO TAXES

ON INCOME

MALTA and SWE DEN, desiring to conclude a Protocol to amend theAgreement

between Malta and Sweden for the avoidance of double taxation with respect to taxes

on income, signed 3t Stockholm o n 30th May, 1975 (hereinafter referred to as "the

Agreeme nt~). have agreed as folloW5

2 16

ARTICLE I

[n Article 2 of the Agreement the following new paragraph (6) shall be inserted

immediately after pmagraph (5)

~(6)

Notwithstanding the other provisions of thi5 Article this Agreement

shall not apply to tax paid or payable in Malta at the rate provided for in subsection

(7) of section 25 of the Incom e Tall Act, 1948.".

ARTICLE 11

Article 23 of the Agreement shall be deleted and replaced hy the fo llowing

"ART ICLE 23

Elimination of DQuble Taxafion

(I) Where a resident of Sweden derives income which ullder the laws of

Malta and in accordancc with the provisions of this Agreement may be taxed in

Malta, Sweden shall allow - subject to the provisions of the laws of Sweden

collceming credit for foreign tax (as it may be amended.from time to time without

changing the general principle hereof) - as a deduction from the tax o n such

income, an amount equal to the Malta tax paid in respect of such income.

(2) (a) The provisions of paragraph (I) shall also apply when the Malta tax

has been wholly relieved or reduced for a limited period of time as if no such

relief had been given or no such reduction had hoeen allowed. In th e case of

dividends referred to in paragraph (2) (b) (ii) of Article 10 the deduction from

the Swedish tax shall include the Malta income tax actually paid in respect of

such dividends as well as that part o f the Malta tax which would have been

payable ullder the law of Malta and in accorda nce with this Agreement but

which , by virtue of the provisions of paragraph (2) (b) (ii) of Article 10. has

not been so payable.

(b) The provisions of th is paragraph shall apply in respect of taxes on

income derived on or before 31st December 1991 or any later date agreed

upon between the compe tent authori ties.

(3) Fo r the purposes of paragraph (1). Malta tax in respect of interest and

royalties paid at a rate of not less than 10 per cent of the gross amo un t of such

income shall be deemed to be either Ihe actual amount so paid, or 25 per cent of the

amount of th e net income charged with tax in Sweden , whichever is the higher.

(4) Notwithstanding the provisions of paragraph (I). where a resident of

Sweden derives income which, in accordance with the provisions o f Article 7 or

Article 14. may be t a~ed ill Malta, Swedell shall exempt such income from tax

provided that the princi pal part of the income of the permanent establishmenl or

fixed base arises from business activi ties or independent personal services, other

than the management of securities and other similar property, and such activities

are carried on within Malta through the permanent establishme nt or Ihe fixed

base.

(5) Notwithstandi ng the provisions o f paragraph (I). dividends paid by a

company hoeing a resident of Malta 10 a company which is a reside nt of Sweden Sha ll

be exempt from Swedish tax to the extent tha! the dividends would have been

exe mpt under Swedi sh law if both companies had been Swedish companies. This

e~e m ption shall nOI apply, however, where Malta tax on the dividends has been

levied at a lower rate than that provided for in paragraph (2) (b) (ii) of Article 10.

(6) Where a resident of Sweden owns capital which , in accordance with the

provisions of this Agreement, may be taxed in Malta . Sweden shall allow as a

deduction from the tax on the capital of that perwn an amount equal to th e capital

tax paid in Malta. The deduction shall not , however. exceed that part of the ca pital

tax, as computed before the deduction is give n. which is appropriate to the capi tal

which may be taxed in Malta.

(7) Where a resident of Sweden derives income or owns capilal which in

acco rdance with the provisions of this Agreeme nt shall be taxable only in Malta, o r

derives income which in accordance with pa ragraph (4) of th is Article shall be

exe mpt from Swedish tax, Swede n may take such income or capital into account

when determining the graduated rate of Swedish tax.

(8) Notwithstanding any other provision of this Agreement. an individual,

being resident of Malta and who also in acco rdance with the Swedish legislati on

with respect 10 the Swedish taxes refe rred toin Articl e 2 is considered as resident in

Swede rl , 'llaybe taxed in Sweden. However, Sweden shall allow any Mal ta tax paid

on the income or capital as a deduction from the Swedish tax in accorda nce with

paragraphs (1) and (6) o f thi s Article. The provisions of this paragraph shall apply

only to individuals who are Swedish nationals.

(9) Subject to the provisions of the law of Malta regarding the allowance of a

credit against Malta tax in respect of foreign tax, where, in accordance with the

provisions of thi s Agreement, the re is included in a Malt a assessment income from

sou rces within Sweden or ele ments of capital situated in Sweden, the Swedish tax

on such income, or e lements o f capital, as the case may be, shall be allowed as a

credit against the Malta tax payable the reo n. ~.

ARTI CLE III

( I) This Protocol shall be ratified and the instruments of ratificat ion shall be

exchanged at Valletta as soon lIS possi ble.

(2) Th e Pro tocol shall ente r inlo force upon the exchange of instruments of

ratificatio n and its provisions shall have effect

(a) As regards pa ragraph (2) of Article 23 of the Agreement. in respect

of taxes on income derived on or after 1st January , 1rn. However. for the

purposes of the appl ication of that paragraph with respect to taxes on income

derived before the expiration of th e calendar year in which this Protocol

e nters in to force, the reference in that paragraph to paragraph (1) shall be

co nstrued as a reference to paragraphs (I) and (2) of Articl e 23 as in force

prior to the entry into force of this Protocol.

(b) As regard s the other provisions of the Protocol, in respect of taxes

on income derived on or after I January next following the excha nge of

instrumems of ratificat io n. and in respect oftaxeso n capital levied during any

ye~r commencing with the second calendar year following such exchange.

ART ICLE IV

This Protocol shall remain in force as long as the Agreeme nt remains ill force .

IN WITNESS WHER EOF the undersigned, being duly authorized thereto, have

signed this Protocol.

DON E at Va l!ella, this 25th day of June, 1986, in duplicate in the Eng~sh

language,

J, GOLLCHER

R, STIVALA

For the Gove",mellt ofSwedell

Forthe Govunmentof Ma/to

It is hereby declared that -

.-\"",ndm<n"

.~"

(a) the articles specified in the Protocol set out in the .ffect.

Schedule to this o rder have been made with the Government of the

Kingdom of Sweden with a view to affording relief from doub le

ta;talion in relation 10 the following ta;tes imposed by the laws of

the Kingdom of Sweden, namely -

(i) the State income tax, including sailors' la;t and

coupon taJO (den stalJiga inkomstskatten. sjomansskatten och

kupongskatten);

(ii) the tax on the undistributed profils of companies

and the tax on distribution in connection with reduction of

share capital or the winding up of a company

(ersattningsskatte n och utskiftn ingsskalten);

(iii)

the tax on public entertainers (bevi ll ningsav·

gifte n);

(iv) the communal income tax (den kommunala

inkomstskanen); and

(v) the State capital tax (den statliga formogenhets·

skatten);

(b)

it is expedient that this amendmen t should have effect.