Double Taxation ReHef (faxes on Income) (faxesonincome)

L.N. 65 01 1'"

INCOME TAX ACT

(CAP. 123)

Double Taxation ReHef (faxes on Income)

(Grand Duchy of Luxembourg) Order. 1996

IN exercise of the powers conferred by section 76 of the Income

Tax Act, the Minister of Finance has made the following order.-

This order may be cited as the Double Taxation Relief(Taxes Ocotlao.

on Income ) (Grand Duchy of Luxembourg) Order, 1996.

CONVENTION

BETWEEN MALTA

AND TIlE GRANO DUCHY OF LUXEMBOURG

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND TIlE PREVENTION OF FISCAL EVASION

WITH RFSPECf TO TAXES ON INCOME

AND ON CAPITAL

The Govern me nt of Maila and the Government of the Grand Duchy of

Luxembourg, desiring to conclude I Convention (or the avoidance of double taution

and the prevention of fIscal evasion with respect to tues on income and on capital.

have agreed as follows

This Convention shall apply to persons who are residents of one or both of the

ContnlCting States.

ARTlQ.El

TausCovc~

I. TIle existing taJles to which the Convention shail apply are

(a>

in the Grand Duchy of Luxembourg

(i) the income lax on individuals O'impot sur Ie revenu des pcrsonnes

physique5);

(ii)

the corporation tax (I'impot sur Ie revenu des collectivitcs);

(iii) the t.alt on fees of directors of companies (I'impoc: special sur ic!

tan tiemC5);

the capital WI. (I'impol sur II fortune);

(iv)

the communal trade tax (I' impot commercial communal);

(v )

(hel't'inafier referred to as "Luxembourg tax").

in Malta

(b)

the income tax

(hereinafter referred to as "Malta tax" ).

2. The Convention shall apply also to any identical or substantially similar taxes

which are imposed after the date of signature of the Convention in addition to, or in

place of, the existing taxes. The competent authorities of the Contracting States shall

notify each other of substantial changes which have been made in their respective

taxation laws.

It is hereby declared:-

(a)

that the arrangements specified in the Convention set

out in the Schedule to this Order have been made with the

Government of the Grand Duchy of Luxembourg with a view to

affording relief from double taxation in relation to the following

taxes imposed by the laws of the Grand Duchy of Luxembourg

0) the income tax on individuals;

the corporation tax;

(ii)

(iii)

the tax on fees of directors of companies;

the capital tax;

(iv)

(v)

the communal tnlde tax;

that it is expedient that those arrangements should have

(b)

effect;

(e) that the Conven tion has entered into force on the 14th

February, 1996.

Norwithstanding the other provisions of this Article this Convention shall

not apply to tax paid or payable in Malta in accordance with the provisions of subsection

(II) of section 31 of the Income Tax Act (Cap. 123)conceming the chlUlleable income

of any person engaged in the production of petroleum produced in Malta or any

substantially similar provision which is imposed after the date of signature of this

Convention.

AR"a..E J

General Dennitlons

For the pwposc:s of this Convention, unless the context otherwise requires

I.

(a) the tenn " Luxembourg" when used in a geographical sense. means the

territory ofthe Grand Duchy of Luxembourg;

(b) the tenn "Malta" when used in a geographical sense, means the Island

of Malta, the Island o f Gozo and the other islands of the Maltese archipelago

including the territorial waters thereof, and any area outside the territorial sea of

Malta which, in accordance with international law ,has been or may hereafter be

des ignated, under the law of Malta concerning the Continental Shelf, as an area

within which the rights of Malta with respect to the seabed and subsoil and their

natural resources may be exercised;

(c) the tenns " a Contracting State" and "theotherConttaCling State" mean

Luxembourg or Malta as the context requires;

(d) the tenn " person" inc ludes an individual , a company and any other

body of persons;

(e) the tenn "company" means any body corporate or any entity which is

treated as a body corporate for tax purposes;

(f) the tenus "enterprise ofa Contracting State" and "enterprise ofthe other

Contracting State" mean respectively an enterprise carried on by a resident of a

Contracting State and an enterprise carried on by a resident of the other Contracting

Stale;

the term ~nationals" means

(g)

all individuals possessing the nationality of a Contracting State;

(i)

(ii) all legal perwns,pannc:rships and associations deriving their status

as such from the laws in force in a ContnlCting State;

(h) the term "internalionaltraffic" means any transport by a ship or aircraft

operated by an enterprise of a Contracting State, except when the shi p or aircraft

is operated solely between places in the other Contracting State;

(0

the term "competent authority" means

0) in Lu~embourg , the Minister of Finance or his au thorized

representative, and

(ii) in Malta, the Minister responsible for finance or his authorized

re presentative.

2. As regards the application of the Convention by a Contracting State any term

nOldefined therein shall, unless the context otherwise requires, have the meaning which

it has under the law ortha! State concerning the taxes to which the Convention applies.

Resklent

I . Forthe purposes of this Convention, the term "resident ofa Contracting Slate"

means any perwn who, undcrthe laws of that State, is liable to tax therein by reason of

his dom icile, residence, place of management or any other criterion of a similar natUTl:.

Bul this lerm does nOl include any perwn who is liable 10 tax in that State in respect

only o f income from sources in that State or capital situated there in.

2. Where by reason of the provisions of paragraph I an individual is a resident

of both Contracting Slates, then his stalus shall be determined as follows

(a) he shall be deemed to be a resident of the State in which he has a

permanent home available to him; if he has a permanent home available to him in

both Stales,heshall be deemed lObe a resident of the State with which his personal

and economic relations are closer (centre of vital interests);

(b) if the State in which he has his centre of vi tal interests cannot he

determined , or ifhe has not a permanent home available to him in either State, he

shall he deemed to be a resident of the State in which he has an habitual abode;

(c) if he has an habitual abode in both States or in neither ofthem, he shall

be deemed to be a resident of the State of which he is a national;

B 74'

(d) if he is a national ofboth StaleS or of neither of them, the competent

authorities of the Contracting States shall settle the question by mutual agreement.

3. Where by reason of the provisions of paB~ 1 • penon otheT than an

individual is a resident of both ContnlCting States. then it shall be deemed to be a

resident of the State in which its place of effective management is situated .

.. ""'"

Pennanmt Establlsbment

For the purposes of this Convention, the tenn "pennanent establishment"

1. means a flXed place of business through which the business of an enterprise is wholly

or partly carried on.

2. The term "pcrmanent establishment" includes especially

a place of management;

(.)

a branch

(b)

an office;

(0)

a factory;

(d)

a workshop;

(0)

(0 • mine . an oil or gas well •• quarry or any other place of extraction of

nawral resources including an offshore drilling site; and

(j) a building site or construction, assembly Of installation project or any

supervisory activities in connection therewith, when such site. project or activity

continues for more than six months.

3. NotWi thstanding the pleceding provisionsoflhis Article,the tenn "pennanent

establishment" shall be deemed not to include

(a) the use offlCilil)essolely forthe purposc ofstonge. d.isplay ordelivery

of goods or merchandise belonging 10 the enterprise

(b) lhe mainlenance of a slock of goods or merchandise belonging to the

enterprise solely for lhe purpose of 5lOn.ge. display or delivery

(e) the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place o f business solely for the purpose of

purc hasi ng goods or merchandise or of collecting information, for the enterprise;

the maintenance of a fixed place of business solely for the purpose of

(e)

carrying on, for the enterprise, any other activity of a preparatory or auxiliary

character;

(I) the maintenance ofa fixed place of business solely for any combination

of activities, mentioned in s ub-paragraph s (a) to (e), provided thai the overall

activity of the fixed place of business resulling from this combination is of a

preparatory or auxiliary character.

A person engaged in a Contracting Siale in exploration of the seabed and its

subsoil or in exploitation of natural resources situated there , as well as in activities

which are complementary o r auxiliary to such activities, is deemed to exercise such

activities through a permanent establishmen t in that State.

An en terprise of a Con tractin g State shall be deemed to have a permanent

establishment in the OIher Contracting State if

(a) there is being used by the e nterprise sufficien t equipme nt as is necessary to

carry out its activ ities in that other State

(b) it carries on supervisory activities in that other State in connection with the

use of equipment referred to in sub-paragraph (a).

Notwithstanding the provisions of paragraphs 1,2 and 4 , where a person-

other than an agent of an independent status to whom paragraph 7 applies - is acting

o n behalf of an enterprise and has, and habitually exercises, in a ConlraCting State an

authority to conclude contracts in the name of the enterprise, that enterprise shall be

deemed to have a pennanent establishment in that State in respect of any activi ties

whic h that person undertakes for the enterprise, unless the activities of such person are

limited to those mentioned in paragraph 3 which, if exercised through a fixed place of

business, would nOl make Ihi s fixed place of business a permanent establishment under

the provisions of thai paragraph.

An enterprise of a Contracting State shall not be deemed 10 have a pennanent

establishment in the ot he r Contracting State merely because it carries on busi ness in

th at other State throu gh a broker, general commission agent or any other agent of an

independent status. where suc h persons are &Cting in the ordi nary course of their

business. However, if the activities of suc h an agent are carried out wholly or almost

whully for the enterprise (or for the enterpri se and other enterprises whieh are controlled

by it or have acontrolling interest in it or are subject to the same common control) and

theconditions made or imposed between them in their commercial or financial relations

differ from those which would have been made or imposed if thi s had not been the

case, that agent shall not be considered to be an agent of an independent status for the

purposes of this paragraph.

B '"

The: (act that a company which is a resident of a Contracting State controls or

is controlled by acompany which is a resident oflhe other ConlraCting State,Of" which

carries on business in thai other State (whether thro\lgh • permanent establishment or

otherwise), shall not of itself constitute either company a permanent establishment of

Ihc otha.

,~.

Income from Immovable Property

1. Income derived by a residcntofaContracting Slate from immovable property

(iocluding income from agricu lture or forestry) situated in the other Contracting State

may be taxed in that other State .

The term "immovable property" shall have the meaning which it has under

2. the la ..... of the ConlnlCting Swe in whicl1 the plopt::ity in question is simared . The term

shall in any casc include property accessory to immovable property, livestock and

equipment used in agricuJlure and forestry, rights to which the provisions of genera!

Ilw .espec:tinglanded ptopc:rty apply. usu(l\ICt of immovable property and rights to

variable or fixed payments as consideration for the working of, or the right to work or

to explore for. mineral deposits. sources and other natural resources; ships, boats and

aircraft sha1l not be regarded as immovable property .

3. The provisions of paragraph I shall apply to income derived from the direct

use, letting, or use in any other form of immovable property.

4 . The provisions of paragraphs I and 3 shall also apply to the income from

immovable property of an enterprise and to income from immovable property used for

the performance of independent personal services.

ARlla...E 7

Bulness Pronu

l. The profitS of an enterprise of a Contracting State shall be taxable only in

Ibat Slate unless theenterprise carries on business in Ibe other Contracting State Ibrough

a pe rmanent establishment situated therein. If the enterprise carries on business as

aforesaid , the profitS of the enterprise may be taxed in the other State but only SO much

of them as is attributable to Ibat permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a Conuxting

State carries on business in the other Contracting State through a pennanent

establishment situated therein , there shall in each Contracting State be attributed to

that permanent establishment the profits which it might be expected to make if;t were

a distinct and separate enterprise engaged in the same or similar activities under the

B '46

same or si milar conditions and dealing wholly independently with the enterprise o f

which it is a permanent establishment or with othe r associated enterprises with which

it deals.

3. In the determination afthe: profits of a pennanent establishment, there shall

be allowed as deductions c:xpensesofthe enterprise. being expenses which are incurred

for the purposes of the permanent establishment (including executive: and general

administrative expenses so incurred) and which wou ld be deductible if the permanent

establishment were an independent entity which paid those expenses, whether incurred

in the Contracting State in which the pennanentc:slablishment is situated or elsewhere.

Nothing in this Article shall affect the application or any law of a Contracting

4. Stale: relating to the determination of the tax liability of a person, including the

determination of such liability by the exercise of discretion or the making of an estimate

by thecompetent authority of that State in cases in which. from the infonnation available

to the competent authority of that State, it is f1O( possible or not practicable to ascertai n

the profits 10 be attributed to a pennanent establishment, provided that that law shall

be applied, and the result shall be in accordance with the principles contained in this

Article.

5. No profits shall be attributed to a pennanent establishment by reason of the

mere purchase by that pennanen t establishment of goods or merchandise for the

enterprise.

6. For the purposes of the preceding paragraphs, the profits to be anributed to

the pennanent establishment shall be determined by the same method year by year

unless there is good and sufficient reason to the contrary.

7. The provisions of this Article shall not affect the provisions of the law of a

Contracting S tate regarding the taxation of profits from the business of insurance.

8. Where profits include items of income which are dealt with separately in

other Articles of this Convention, then the provisions of those Art icles shall not be

affected by the provisions of this Article.

ARnCLEI

International Trame

I . Profits of an enterprise of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in thai State.

2 . The provisions of paragraph 1 shall also apply to profits derived from the

participation in a pool, a joint business or an international opernting agency.

"""'-',

Associated Enterprises

I . Where

<I) an enterprise of a Contracting Slate participates directly or indirectly in

the management, control or clpital of an enterprise of the other Contracting Slate,

'"

(b) the same persons participate directly or indirectly in the management,

control or capital of an enterprise o f. Contracting Slate and an en terprise of the

Olher Counttacting Slate,

and in eilhercase conditions m made or imposed between the two enterprises in their

commercial or financial relations which differ rrom those which would be made between

independent enterprises, then any profits which would. but for those conditions, have

accrued to one or the enterprises, but. by reason or those conditions, have not so accrued,

may be included in the profits of that enterprise and taxed accord ingly,

2. Nothing in this Article shall affect the application of any law of a Contracting

State relating to the detennination of the tax liability of an enterprise including the

delennination of such liability by the exen:ise or a discretion or the making of an

estimate by the competent authority of that State in cases which, rrom the information

available to thecompetent authority of that State. it is DOl possible or DOl pnlCticable to

detennine the income to be attributed to an enterprise, provided that that law shall be

applied. and the result shall be in accordance with the principles contained in this

Article.

3. Where a Contracting State includes in the profits of an enterprise of that

State . and taxes accordi ngly, profits on which an enterprise of the other Contracting

State has been charged to tax in that other Slate and the profits so included m profits

which would have accrued to that enterprise of the tim-mentioned State if the conditions

made betwccn the two enterprises had been those which would have been made between

independent enterprises. then that other State shall make an appropriate adjustment to

the amount of the tax charged therein on those profits. In detennining such adjustment,

due regard shall be had to the other provisions of this Convention and the competent

authorities of the ContlllCting States shall if necessary consult each other.

ART1O..IIIO

DividetMb

I . Dividends paid by a company which is a resident of a Contracting State to a

resident of the other Contracting Slate may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting Stale o(which

the company payi ng the di vidends is a resident and according to the laws orthal Slate,

but

(a) where the dividends are paid by a company which is a resident of

Luxembourg to a resident of Malta who is the beneficial owner thereof, the

Luxe mbourg tax so charged shall nOi exceed

(i) 5 per cent of the gross amount of the dividends if the beneficial

owner is a company (other than a pannership) which holds dircctly Btleast

25 per cent of the capital of the company paying tile dividends

(ii)

15 percent of the gross amount of lhc: dividends in all other cases;

(b) where the dividends are paid by a company which is a resident of Malta

10 a resident of Luxembourg who is the beneficial owner thereof Malta tax on the

gross amount of the dividends shall not exceed that chargeable on the profits out

of which the dividends are paid.

This paragraph shall not affect the laXation of the company in respect of the profits

out of which the divfdends are paid.

3. The tenn "dividends" as used in this Anicle means income from shares,

"jouissance" shares or "jouissance" righlS, min ing shares. founders' shares or other

righlS. not being debt-claims, panicipating in profits, as well as income from other

corporate ri ghts which is subjected to the same taxation treatment as income from

shares by the laws of the State of which the company making the distribution is a

resident.

4 . The provisions of paragraphs I and 2 shall not apply if the beneficial owner

of the div idends, being a resident of a Contracting State, carries on business in the

other Contracting State of whieh the company paying the dividends is a resident, through

a pennanenl establ ishment situated therei n, or performs in that other State independent

personal services from a fixed base situated therein, and the holding in respect of

which lhe dividends are paid iseffectivelYCOflnectcd with such pennanentestablishment

or fixed base. In such case the provisions of Article 7 or Aniele 14 . as the case may be,

shall apply.

S. Where a company which is a resident of a Contracting State derives profits

or income from the other Contracting State. that other State may not impose any tax on

the dividends paid by the company. except insofar as such di vidends are paid to a

resid(o)lt of that other State or insofar as the holding in respect of which the dividends

are paid is e ffective ly connected with a pennanenl establishment or a fixed base situated

in that other Stale, nor subject the company's undistributed profilS to a laX on the

company's undistribUled profilS, even if the dividends paid or the und istributed profits

consist wholl y or panty of profits or income arising in such other State.

Interest

I . In terest arising in a Contracting State and paid to a resident of the other

Contracting State shall be wable only in that other State, if such resKient is the benefICial

owner of the interest.

2. 'The tenn "interest IS used in this Article means income from debt-claims of

H

every kind, whether or nOl: secured by mortgage and whether or no( clUT)'i ng a right to

participate in thedebtol"s profits,and in particular, income from government securities

and income from bonds or debentures, inclooing premiums and prizes attaching to

such securities, bonds or debentures. Penalty charges for late payment shall noc be

regarded as interest for the purpose of this Article.

3. 'The provisions o f paragraph I shall not apply if the beneftcial owner of the

interest , being a resident o f a Contracting State, carries on business in the other

Contracting State in wh ich the interest arises, through a pennanent establishment situated

therein, or perfonns in thatOlher State independent personal services from a fixed base

situated therein , and the debt~laim in respect of which the interest is paid is effectively

connected with such permanent establishment or fued base. In such case the provisions

of Article 7 or Anicle 14, IS the case may be, shall apply.

4. Where. by reason ofa special relationship between the payer and the beneficial

owner or between both of them and some other person, the amount of the interest,

having regard to the debt-claim for which it is paid, exceeds the amount which wou ld

have been agreed upon by the payer and the beneficial owner in the absence of such

relationship,the provisions of this Article shall apply only to the last-mentioned amount.

In such case, the excess part of the payments shall remain taxable according to the

laws of each Contracting State , due regard being had to the other provisions of this

Convention.

AR11a..E 11

Royalties

I . Royalties arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

2 . However, such royalties may also be taxed in the Contraeting State in which

they arise and according to the laws of that State, but if the recipient is the beneflCial

owner of the royalties the tax so charged shall not exceed 10 per cent of the gross

amount of the royalties.

3. The term "royalties IS used in this Article means payments orcred.its, whether

H

periodical or noc, and however described or computed, to the extent to which they are

made as consideration for

B 7SO

(a) the use of, Of the righllO use, any copyright. patent, design or model ,

plan, secret formula or process, trademark or other like property or right;

(b)

the supply of scientific, tech nical, industrial or commercial knowledge

or information;

the supply of any assistance that is ancillary and subsidiary 10, and is

(e)

furnished as a means of enabling the application or enjoyment of, any such property

or right as is mentioned in sub-paragraph (a), or any such know ledge or information

as is mentioned in sub-paragraph (b);

(d)

the use of, or Ihl! right to use

(i)

motion picture films; or

films or video tapes for use in connection with television; or

(ii)

tapes for use in connection with radio broadcasting;

(iii)

total orpartial forbearance in respect of the useorsupply of any property

(e)

or right refem:d to in this paragraph .

4. The provisions of paragrnphs 1 and 2 shall no( apply if the beneficial owner

of the royalties. being a resident of a Contracting State , carries on business in the othe r

Contrncting State in which the royalties arise, through a permanent establishment

situated therein, or performs in thaI other Slate independe nt personal services from a

fixed base si tuated therein , and the right or property in respect of which the royalties

are paid is effectively connected with suc h permanent establishment or fued base , In

such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

5. Royal ties shall be deemed to arise in a Contracting State whe n the payer is

that State itself, a political SUbdivision, a local authority, or a reside", of that State.

W here , however, the person paying the royalties, whether he is a resident o f a

Contracting State or nO! , has in a Contracting State a permanent establishment or fixed

base in connection with which the obligation to pay the royalties was incurred, and

such royalties are borne by such pennanent establishment or fixed base , then such

royalties shall be deemed to arise in the State in which the permanent establishment or

fixed base is situated.

6, Where, by reason of a special relationship between the payer and the benefiCial

owner or between both of them and some other person, the amount of the royalties,

havin g regard to the use, right or information for which they are paid, exceeds the

amount which would have been agreed upon by the payer and the beneficial owner in

the abse nce of such relationship, the provisions of thi s Article shall apply only to the

last-mentioned amount, In such case, the excess part of the payme nts shall remain

taxable according to the laws of each Contracting Stale , due regard being had 10 the

other provisions of this Convention.

Altna.e 13

AHmatioa 01 PI openy

I. Income or gains derived by a resident of a Contracting Stale from the alienation

of immovable property referred to in Article 6 and situated in the other Contracti ng

State as well as gains derived rrom thealienation ofshares or participations in acompany

whose asselS consiSt mainly of immovlble property sirulled in the other Contracting

State, may be taxed in that other Swe.

2. Income or gains from the alienation of movlble property forming pan of the

business plope.ty of I pennanent establishment which In enterprise of I Contracting

State has in the other Contracting Slate or of movable plOperty pertaining to a fixed

base Ivailable 10 I resident of I Contracting Stale in the other Contracting Stale for the

pwpose of performing independent personal services, including soch income Of' gains

from the alienation of such a permanent establishment (alone or together with the

whole enterprise) or of such fixed base, mlY be taxed in the other State.

3. Income or gains derived by an enterprise of a Contracting State from the

alienation of ships or aircraft openued in international traffIC or movable property

pertaining 10 the openltion of such ships or aircraft, shaJi be taxable only in that State.

4 . irlCome or gains from the alienation of any property other than that referred

to in paragraphs 1,2 and 3, shall be wable only in the Contracting State of which the

alienator is a resident.

IDdependcnt Personal Servkt:s

I. Income derived by I resident of a Contracting Stale in respect of professional

services or other activities of an independent character shall be taxable only in that

Swe. However ,such income may be wed in theotber ContractingState in the following

circumstances

<a> ifhe has a fixed bue regularly available to him in the other ConlrICti ng

State for the purpose of performing his activities (in which case only so much of

the income as is attributable to that fixed base may be wed in that other Contracting

Slale): or

(b) if his stay in the other Contracting State is for a period or periods

amou nting to or exceeding in the aggregate 90 days in any twelve mon th period

commencing or ending in the calendar yeu concerned.

2. The term "professional services" includes especially independent scientirlC,

literary, artistic,educational or teaching activities as well as the independenlactivities

of physicians, lawyers, engineers. arc hitects. dentislli and ICCountanlli.

ARl1CLE 15

Dependent Persona] Services

I. Subject to the provisions of Articles 16. 18, 19 and 20. salaries, wages and

other similar remuneration derived by a resident of a Contnlcling Stale in respect of an

employment shall be taxable only in that Stale unless the employment is exercised in

the other Contracting Stale.trthe employment is so exercised, such remuneration as is

derived therefrom may be taJted in that other State.

2. Notwithstanding the provisions of parngraph I , remuneration derived by a

resident of a Contracting State in respect of an employment exercised in the other

Contracting State shall be wahle only in the first-mentioned State if

(a) the rec ipient is present in the other State for a period or periods not

exceeding in the aggregate 183 days in any twelve month period commencing or

ending in the calendar year concerned, and

(b) the remuneration is paid by, or on behalf of, an employer who is not a

resident of the other State, and

(c) the remuneration is not borne by a permanent establishment or a fixed

base wh ich the employer has in the other State.

3. Notwithstanding the pi c::ceding provisions of this Artkle, remuneration derived

in respect of an employment exercised aboard a ship or aircraft operated in international

traffic by an enterprise of a Contracting Slate may be taxed in that State.

ARTICLE 16

Directors' Fees

Directors' fees and other similar payments derived by a resident o f a Contracting

State in his capacity as a member of the board of directors of a company which is a

resident of the other Contracting State may be taxed in that other State.

AR'11CUt 17

Arllstes and Sportsmen

I.

Notwithstanding the provisions of Anicles 14 and IS, income derived by a

resident of a Contracting State as an entertainer, such as a theatre . motion picture.

radio Of television aniste.or a musician . or as a sportsman. from his personal activities

as suc h exercised in the other Contracting State, may be taxed in that other State.

2 . Where income in respect of personal activities exercised by an entertainer or

a sportsman in his capacity as such accrues not to the entertainer or sportSman himself

.m

but to another person, that income may , noIwithstanding the provisions of Articles 7,

14 and IS, be taxed in the Contracting Stare in which the activities orthecntertaincr Of

sponsman are exercised.

I . Subject to the provisions of paragntph 2 of Article 19, pensions and other

similar remuneration paid to I residen t of. Contracting State in consideration of past

employment shall be taxab le only in that State.

I. Notwithstanding the provisions of paragraph I , pensions and otherpaymenrs

made under the social security legislation of a Contracting State shall be laJ.able only

in that State.

(a) Remuneration. other than a pension . paid by a Contracting Slale or a

J.

political subdivision or • local authority thereof 10 an individual in respect of

services rendered to that Siale or subdivision or authority shall be taxable only in

that Slate.

(b) However, such remuneration shall be taxable only in the other

Contracting State if lhe services are rendered in that State and the individual is a

residen t of thai State who

(i)

is I nalional of tha t State; or

(ii) did not become a resident of that State solely for the purpose of

rendering the services.

2. (a) Any pension paid by . or out of funds created by. a Contracting State

or a politica!subdivislon or a loca! authority thereof to an individual in respect of

services rendered to that State or subdivision or authority shall be taxable only in

that State.

(b) However, such pension shall be taxable only in the other Contracti ng

State if the individual is a resident of, and a national of. that State.

3. 1be provisions of Articles I ~. 16 and 18 shall apply to remuneration and

pensions in respect of services rendered in c:onnect.ion with a business curled on by a

Contracting Slale or a political subdivision or local authority thereof.

7.54

ARl1CL1!l0

StucienLs and Apprentices

An indi vidual who is a resident of aContracting State immediately before making

a vis it to the otherContracr.i ng Stale and is temporari ly present in the other Sate solely

(a) as a student at a recognized university. college. school or other similar

recognized educational institution in that other State: or

as a business or technical apprentice; or

(b)

(c) as a recipient of a grant, allowance or award for the primary purpose of

study ,research or training from theGovemmenl of either State or from a scientific,

educational, religious. or charitable organization or under a technical assistance

programme entered into by the Government of either State, shall be exempt from

tax in that other State on

(a) all remittances from abroad for the purposes of his maintenance,

education, study. research or train ing;

the amount of such grant, allowance or award; and

(b)

(c) any remunerati on for personal services rendered in that other State,

provided that the remuneration constitutes earnings necessary fOf his maintenance.

Other Income

I. Items of income of a resident of a Cootnlcting Slate, wherever arising. not

dealt with in the foregoing Anicles of this Convention shall be taxable only in that

State.

2. The provisions of paragraph I shall not apply to income. other than income

from immovable property as defined in paragraph 2 of Article 6, if the recipien t of

such income, being a resident of a Contracting State, carries on business in the olher

Contracting State through a permanent establishment situated therein. or performs in

that other State independent personal services from a fixed base situated therein, and

the right or property in respect of which the income is paid is effectively connected

with such permanent establishment or fixed base . In such case the provisions of An icle

7 or Aniele 14 . as the case may be, shall apply.

ARTICUl22

Ca pital

I. Capital represented by immovable property referred to in Article 6, owned

by a resident of a Contracting State and situated in the other Contracting State, may be

taxed in that other State.

2. Capital represented by movable propeny forming panof the business property

of a permanent establishment which an enterprise of a Contracti ng State has in the

other Contracting State or by movable propeny penaining to a fixed base available to

a residenl of a Contracting State in the other Contracting State for the purpose o f

performing independent personal services, may be taxed in that other State.

3. Capital represented by ships and aircraft operated in international traffic by

an enterprise ofa Contracting State and by movable propeny pen aining to the operation

of such ships and aircraft, shall be taxable only in that State.

4. All other elements of capital of a resident of a Contracting State shall be

taxable only in that State.

ART1CU12J

Elimination of Double Taxation

In Luxembourg double taxation shall be eliminated as follows

1. (a) Where a resident of Luxembourg derives income or owns capital whic h,

in accordance with the provisions of this Convention, may be taxed in Malta,

Luxembourg shall. subject to the provisions of sub-paragraphs (b) to (f), exempt

such income or capital from tax, but may, in order to calculate the amoun t of tax

on the remaining income or capital of the resident, apply the same rates of tax as

if the income or capital had not been exempted.

(b) Where a resident ofl.JJxembourgderives royalties which. in accordance

with the provisions of Anicle 12 may be taxed in Malta, Luxembourg shall allow

as a deduction from the tax on the income orthat resident an amount equal to the

tax paid in Malta. Such deduction shall not. however, exceed that part of the tax,

as computed before the deduction is given. which is attributable to such royalties

derived from Malta.

(c) Wh ere an enterprise of Luxembourg derives income which, in

accordance with the provisions of Anicle 7, may be taxed in Malta, Luxembourg

shall allow as a deduction from the tax on the income of that res ident an amount

equal 10 the tax paid in Malta, but only if the enterprise enjoys in Malta a special

fiscal treatment by vinue of the laws or the administrative practice of Malta. Such

deduction shall not however, exceed that pan of the tax, as computed before the

deduction is given, which is attributable to such income derived from Malta. The

Governments of the Contracting SUItes shall agree periodically which spe<:ial fiscal

treatment is meant under the provisions of this sub-pal1lgraph.

Notwithstandi ng the provisions of sub-paragraph (b). where a resident

(d)

of Luxembourg derives in terest or royalties arisi ng in Malta, Luxembourg shall

al low a~ a deduction from the tax on the income of thai resident an amount equal

10 the tax which would have been payable but for the exemption or reduction of

Mal ta tax in accordance wi th special incen tive measures for the promotion of

development of industry ,infrastructure and tourism in Malia, provided that in the

case of interest or royalties s uch tax shall be deemed to have been paid at

iO percent of tile gross amount of the interest referred to in Article

(i)

II;and

(ii) iO per cent of tile gross amount of the royalties referred to in

Article 12.

The provisions of this sub-paragraph shaH apply for a period of seven years

beginning on the 1 January in the calendar year in which the Convention enters

in to force. This period may be extended by mutua l agreement between the

com petent authorities.

(e) Where a company which is a residen t of Luxembourg derives dividends

from Malta sources , Luxembourg shal l exempt such dividends from tax. provided

thaI the company which is a resident of Luxembourg holds directly al leasl 25 per

cen t of the capital oflile company paying the dividends since the beginning of the

accoun ting year an d if this company is subject in Malta 10 an income tax

correspond ing to the Luxembourg corporation tax. The above-mentioned shares

in the Malta company are. under the same conditions, exempt from the Luxembourg

capi ta l tax. The exemp tion und er th is sub- paragraph shall also apply

n()(withstandi ng that the Maltacompany isexempted from tax ortaxed at a reduced

rate in Malta in accordance with Mal ta laws providing incenti,·es·for the promotion

of development of industry, infrastructure and tourism in Malta.

(f) Where a resident of Luxembourg deri\'esdiv idends from M3lta sources

not dealt with in sub-p3rogroph (e),such dividends shall be subject to Luxembourg

tax on the amoun t afte r the deduction of Malta tax charged on such dividends.

but, there shan be allowed as a credit again st Luxembourg tax an amount of IS

per cent on such dividends afler the deduction of the Malta tax (if any) charged

thereon. Such credi t shall not. oowe,·e r, exceed that part of tile tax . as computed

before the credit is given. which is attributable to such dividends dcrived from

Malta.

B

7S7

In Malta double laxation shall be eliminated as follows

2. (a) 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 ormis Convention. there is included in a Malta assessment income

from sources within Luxembourg. the Luxembourg tax on such income shall be

allowed as a cred it against the re lative Malia tax payable thereon.

(b) When: a company which is a resident of Luxembourg payS a dividend

to a company resident in Malt.a which controls directly or indirectly at least 10 per

cent of the voting power in the first-mentioned company, the credit shall take into

account (i n addition to any Luxembourg tax for which credit may be allowed

under sub-paragraph (a) of this paragraph) the Luxembourg tax payable by that

first-mentioned company in respect of the profits OUI of which such dividend is

paid.

3. Where the Convention provides that income arisi ng in a Contracting State

shall be relieved from tax in that State. either in full or in part. and. under the law in

force in the other Contracting State . such income is subject 10 w by reference 10 the

amount Ihereofwhich is remilted 100r received in that other Slate and nO( by reference

to the full amount thereof. then Ihe relief to be allowed in the first-mentioned State

shall apply only to so much of the income as is rem itted to or re<:eivcd in the other

Stale.

Non-Discrimination

I . NarionalsofaContBCting Stale shall not be subjected in the othcrContracting

State to any taxation or any requirement connected therewith. which is other or more

burdensome Ihan Ihe tMlltion and connected requirements to which nationals of that

O(her State in the same circumstances are or may be subjected. This provision shall,

notwithstanding the provisions of Anicle I ,also apply to persons who arc 001 residents

of one or both of the Contracting States.

2. The taxation on a permanent es tab lishment which an enterprise of a

ContraCting State has in the other Contracting State shall not be: less favourably levied

in that other State than the taxation levied on enterprises or that O(her Stateeanying on

the same activities.

3. Except where the provisions of paragraph I of Article 9, parugraph 4 of Article

Il,or paragraph 6 of Article 12.apply. interest, royalties and other disbursements paid

by an enterprise of a Contracting State 10 I resident of the other Contracting State

shall, for the purpose of dctennining the wahle profits of such enterprise. be deductible

under the same conditions as if they had been paid 10 a resident of the first-menlioncd

State .

B 75.

Similarl y. any debts o f an enterprise of a Contl"'.tCting State to a resident of the

other Contracti ng State shall. for the purpose of dClcnnining the taxable capilal of

such enterprise. be deductible under the SlIme conditions as if they had been conll'aCted

to a resident of the first-ment ioned State.

4. Enterprises of a Contrncting Stale, the capital of which is wholly or panly

owned or controlled, directly or indirectly. by one or more residents of the other

Contracting State, shall not be subjected in the tirst-men ti ond State to any taxation or

any requirement connected therewith which is other or more burdensome than the

taxation and connected requirements to which other similar enterprises of the first-

mentioned State are or may be subjected.

5. Nothing in this Article shall be construed as obliging 0 Contracti ng State to

grant to individuals who are resident of the other Contracting State any personal

allowances, reliefs and reductions for tax purposes on account of civil status, fam ily

responsibili ties or any other personal circumstances which it grants to its own residents.

6 . The provisions of this Article shall, notwithstanding the prov isions of Article

2, apply to taxes of every kind and description.

M ut ual Agree ment Procedure

I . Where a person considers that the actions of one or both of the Contracting

States result or will result for him in taxati on not in accordance with the provisions of

this Conven tion. he may , irrespective of the remedies provided by the domestic law of

those States, present his case to the competent authority of the Contracting State of

which he is a resident or, if his case comes under paragraph I of Article 24, to that of

the Con tracting State of whieh he is a national. The case must be presented within

three years from the first notification of the action resul ting in tallation not in accordance

with the provisions of the Convention.

2. The competem authori ty shall endeavour, if the objection appears to it to be

justified and if it is not itself able to anive at a satisfactory solution , to resolve the case

by mutual agreement with the competent authori ty of the OIherContracting State, with

a view to the avoidance of tallation which is not in accordance with the Convention.

Any agreement reached shall be implememed notwithstanding any time limits in the

domestic law of the Contracting States.

3. Thecompetent authori ties oftheConnocting States shall endeavour to resolve

by mutual agreement any difficulties or doubts arising as to the interpretation or

application of the Convention. They may also consult together for the elimination of

double tallation in cases nOi provided for in the Convention.

4 . The competent authorities of the Contracting States may communicate with

each otherdinxtly forthe purpose of reaching an agreement in the sense of the preceding

•

paragraphs. When it seems advisable in order to reach agreement to have an 0011

exchange of opinions. such exchange may lAke place through aCommission consisting

of representatives of the competent authorities of the Contracting States.

Exchange o( Information

I . The competent authorities of the Contracting States shall exchange suc h

information as is necessary for carrying out the porvisions orlhis Convention or of the

domestic laws of the Contracting Stales concerning taxes covered by the Convention

insofar as the taxation thereunder is not contrary to the Convention. The exchange of

information is not restricted by Article I . Any infonnation rtteived by a Conll1lcting

Stale shall be treated lIS secret in the same manner as information obtained under the

do mestic laws of that State and shall be disclosed only to persons or authondes

(including courts and administrative bodies) invol ved in the assessment or collection

of, the enforcement or prosecution in re spect of, or the determination of appeals in

relation to, the taxes covered by the Convention. Such persons or authorit ies shall use

the information only for such purposc..s. They may disclose the information in public

court proceedings or in judicial decisions.

2. In nocasc: shall the provisions of paragraph 1 be construed so as to impose on

a Contracting State the obligation

(a) 10 cany out administrative measures at YariallCe with the laws and

administrative practice of that or of the other Contracting State;

(b) to supply information whi ch is not obtainable under the laws or in the

normal course of the administration of that or of the other Contracting State;

(c) 10 supply information which would disclose any trade, business.

industrial, commercial or professional secret or trade process.Of information. the

disclosure of which would be contrary to public policy (ordre public).

Aa"TlCU!T1

Diplomatic Agents li nd Consular Omcers

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents

or consular officers under the general rules ofintemationallaw or under the provisions

of special agreements.

AII"TlCU! 21

[xclusion of Certain Companies

I . The provisions of this Q,'lwention shall not apply to companies enjoying a

special fiscal treatment by vinue of the laws or the administrative practice of either

one of the Contracting States. Neither shall they apply to income deri ved from such

B

''''

companies by a residenT of th e other Contracting Stale, nor to shares or other rights in

such companies owned by such person .

2. The Governments of the Contracting States shall agree peri odically which

special fiscal treatmenT is meant under the provisions of paragraph I of this Article.

AltTlaJl29

Entry Into ,,' oree

1. The Governments of the Contracting States shall notify each other that the

constitutional requirements for the entry into force of this Convention have been

com plied wi th .

2. The Convention shall enter into force thirty days after the date of the late r of

the notifications referred to in paragraph 1 and its provisions shall have effect

(a)

in Luxembourg

(0 in respect of taxes withheld at source, to income deri ved on or

after [ January in the calendar year in which the Convention enters into

force

(ii) in respect of othcr taxcs on income and taxes on capital. to taxes

chargeable for any taxable year beginning on or after 1 January in thecalendar

year in which the Convcntion enters into force

in Malta

(b)

in respect of taxes which arc levied for any year of assessment beginning

on or after I January in the calendar year immediately following the year in

which the Convention enters into force.

1<RTlClLJO

Termination

This Convention shall remain in force until tcnninated by a Contractin g State.

Eithcr Contracting State may tenninate the Convention. through diplomatic channels.

by giving noti ce of terminati on at !cast si ~ months before the end of any calendar year

following after the period of five years from the date on which the Convention enters

into force. In such event. the Convention shall cease to have effect

1. in Luxembourg

(a) in respect of taxes withheld at source. to income derived on or after I

January in the calendar year immediately following the year in which the notice

is gh'en

B 76l

(b) in respect of other taxes on income and taxes on capital . to taxes

chargeable for any taxable year beginning on or after I January in the calendar

year immediately following the year in wh ich the notice is give n;

2. in Malta

in respect of taxes which arc levied for the year of assessme nt beginning on

or after I January of the second calendar year next following the year in wh ich

the OO(ice is given .

In witness whereof the unders igned, duly au thorized thereto. have signed this

Convenlion .

Done in duplicate at Luxembourg this 29th day of April . 1994 . in the French and

English languages. both texts being equally authentic.

For the Government of Malta

For the Government of the

Grand Duchy of Luxembourg

Guido de Marco

Jacques F. Poos

Deputy Prime Minister.

Deputy Prime Mi nister.

Minister for Foreign Affairs

Mi nister for Foreign Affairs.

Foreign Trade and Cooperation

AGREED ~llNUTF.S

The represenlativC5 of the Government of Malta and the Government of the Grand

Duchy of Luxembourg hereby record the following understandin g which has been

reached between the two Governments during the course of the negotiations for the

conclusion of the Convention between Malta and the Grand Duchy of luXembourg for

the A voidance of Double Taxation and the Preven tion of Fiscal Evasion wi th respect

to Taxes on Incomc and Capiml. signed at Luxembou rg today (herei nafter refe rred to

as " the Convention")

I. With refe rence to sub-paragraph (c) of paragraph 1 of An icle 23 of the

Convention the term "if the enterprise enjoys in Malta a special fiscal treatmen t by

vinue of the laws or the administrative practice of Malta" mea ns a Luxembourg

enterprise with a branch in Malta under the provisions of subsecti on (3) of section 22

of the Malta International Busi ness Activities Act. 1988 .

2. With reference to Anicle 28 of the Convention. the teon "companies enjoying

a special fiscal treatment by virtue of the laws or the administrative practice of either

one of LIle Contracti ng States" means

(a) in the case of Luxcmbourg holding companies within the meani ng of

the Act (loi) of311uly. 1929 and the Decree (arrete grand-ducaJ) of 17 December,

1938;

(b) in the case of Malta companics which are subject to a speciallWl. regime

under the Malia Intcrnational Business Activities Act. 1988 except for companies

which opt in tcnns of section 41 of the said Act to be subject to the normal

provisions ofthe Income Tax Act (Cap. 123).

Luxembourg . 29th April . 1994

For the Government of the

For the Government of Malta

Grand Duchy of Luxembourg

Jacques F. Poos

Guido de Marco

Deputy Prime M iniste r.

Depuly Prime Minister .

Minister for Foreign Affairs

M inister for Foreign Affairs.

Foreign Trade and Coopcralion

~Ioy.~.'of~ - ';"'''/;0

. -

1tooIiija -

.o-.. -_ • .,c .= .. ,........,,,., ..

)1 ...... 1'1-'

$ ......

Id-dispoiizz.jonijiet la' dan is-subparagrafu japplikaw ghal imien seba' snin

li jibda ghaddej fJ-J ta' Jannar fis-stna kalendarja Ii fihjibdajse hh il-Ftehim. Dan

ii-wien jiSla' jiggebbcd bi fiehim Ii jsir bejn ii-iewg aWloritajiet kompetenti .

(e) Meta kumpann ija Ii Ikun reside nti ta ' Lussemburgu likseb dividendi

minn sorsi ta' Malta, Lussemburgu ghandu jeienta Iii dawk id-dividendi mil-

talUa, kemm-i! darba Ii !-kumpannijaresidenti ta' Lussemburgu jkollhadirettament

mill-i nqas 25 fil-mija tal-kapital tal-kumpannija Ii tlrun qed lhallas id-dividendi

sa mill-bidu las-sena ta' kontijiet u je\tk: din il-kumpannija Ikun suggetta rMalta

ghal tana fuq I -incom~ Ii Ikun tikkorrispondi ghat-tana korporattiva la'

Lussemburgu. L-ishma msemmija qabel fil -kumpannija la' Malta huma eienti ,

b'dawk I-istess kondiujonijiet, mit-lana fuq i1-kapital ta' Lusse mbuIgu. L-

eienzjoni tal'lt dan is-subparagrafu ghandha Ikun lapplika wkoll minkejja Ii 1-

kumpannija ta' Malia Ikun eienti mil-taxxajew Ikun intaxxata b'rala imnaqqsa

rMalta skond i1-ligijiet ta ' MalIa Ii jipprovdu ineenlivi ghall-promoujoni ta '

ivilupp ta ' I-industrija, infTaslrottura u lurii mu f'Malta.

(f) Meta residenl! la' Lussemburgujikseb dividendi minn g!'lejjun ta' Malta

Ii rna jaqghux tat'll is-subparagrafu (e), dawk id-dividendi ikunu suggetti ghat-

taxll.3 ta ' Lussemburgu fuq I-ammon! wara Ii titnaqqas il-la.u:a ta ' Malta Ii tithaJlas

fuq dawk id-diviclendi , iida ghaJ1du jinghala k:red ilu fi t-taxxa ta' Lussemburgu

ta ' ammont ta' IS fil-m ija fuqdawk id-dividend i W8n\ I-lnaqqis tat-taJUa ta' Malta

(jekk iku n hemm) Ii ulhaJlas fuqhom . Dan il-kred ilu m'ghandux . madankollu .

jca:edi dak is-sehem tal-taxAa, kif mahduma qabel rna j inghata I-kreditu, Ii tkun

attribwibbli ghal dawk id-dividendi Ii jinkisbu minn Malta.

2. F' Malta Haxxa doppja lilnehha kif gcj

(a) Bla hsara ghad-dispoiizzjonijict tal-ligi ta' Mal ta dwar Ii jigi penness

kreditu fit-taxxa ta' Malta dwar taxxa barranija. meta, skond id-dispoiizzjonijiet

ta ' dan il-Ftehim, ikun hemm ink]ui fi slima ta' Malta income minn ghejjun gewwa

Lussemburgu. il-Iaxxa ta' Lussemburgu fuq dak I-income ghandu jinghata bhala

kreditu fiHaua ta' Malta relattiva Ii tithallas fuqha.

(b) Meta kumpannija Ii Ikun residenti ta' Lussemburgu thallas dividendi

IiI kumpannija residenti ta' Malta Ii Ikun ti kkontroUa direttament jew indirettamenl

mill-inqas 10 fiI-mija tal-kontroll effettiv fil -kumpan nija l--ewwel imsem mija. ii-

kred itu ghandu jqis ukoll (b'Zieda ghal ku ll laxxa ta' Lussemburgu Ii dwama

jista ' jinghata kredilu tabt is-subpanlgrafu <a) la' dan iI-paragrafu) it-taxxa la'

Lusse mburgu Ii lithallas minn dik i1~ku mpannija I-(:wwel imsemmija dwar ii-

profitti Ii minnhom jithallas dak id-.dividend .

3. Meta J-Ftehim ikun jipprovdi I-income Ii jitnissel fi Stat Kontraenli ghandu

jinhelcs miHaxxa rdak I-Istat, sew jekk kollu kemm hu jew rparti minn u, u skond ii-

ligi Ii Ikun fiHehh fl -Istat Kontraenti I- iehor, dak I-income ikun suggett ghat-taxxa

b'referenza ghall-ammonllieghu Ii jinghata lura Iii jew Ii j igi ricevut rdak I-Istat J-

iehor u mhux b'referenza ghall-ammont shih tieghu, ghaldaqshekk iJ-helsien Ii jigi

permess fl-(:wwel Stat ikun japplika biss ghal daqstant mill-income daqskemmjinghata

lura jew jigi ricevul fl· lstat I-iehor.

ARTlKLll l-<

Ebda Dlskrimlnaujoni

1. Ci ttadi ni ta' Stat Kontraenti rn a ghandhonu jigu suggetti fl-Istat Kontraenti

I- iehor ghal xi tassazzjoni jew xi hti ega Ii ghandha x' taqsam maghha,li rna lkunJ( jew

Ii Ikun ta' piz aktar miHBSSanjoni u htigijietli ghandhom x'jaqsmu maghha Ii ghalihom

nazzjonali ta ' dak I-Ista! I-ie hor fl-isless ci rkostanzi huma jew jistghu j kunu suggetti .

Di n id-.dispozizzjoni ghandha wkoll tapplika, minkejjad-dispoiizzjonijiet ta' I· ArtikJu

I , ghal persuni Ii rna j kunux residenti ta' xi SIal Konlraenti wiehed jew tat-Inejn Ii

huma.

2 . It-tasuzzjoni fuq stabbiliment pennanc:nti Ii impriia ta' Stat Kontrac:ntijkollha

fl- Istat Konuaenli I-iehor rna ghandh ie x tingabar r dak I-Islal I-iehor b'mod inqas

rdak I-islat I-ichor Ii jmexxu I-istess

favorevoli miH3ssazzjoni migbura fuq impriii

anivitajiet .

3. Hlief meta d-dispoiiujonijiet tal-paragrafu Ita' I-Artiklu 9. laI- paragrafu 4

la' l-Artiklu 11 jew tal-paragrafu 6 [a'l-Aniklu 12 ikunujapplikaw ,kull mghax,ruyoJlies

u !'I lasijiet ohra Ii jsiru minn impriia la ' Stat Kontraenti Iii residenti ta l-Islat Kootraenti

I-ichor ghandhom bil-ghan Ii jig; stabbilit il-qliegh laXXabbli ta' dik J-impriia,jirnaqqsu

tal'll I-isless kund izzjonijiet daqslikieku kienu t!'lallsu iii resident; la' I-Istat l-ewwel

imse mmi .

BI-istess mod, !run debitu la' impriia ta ' Stat Kontraenti 1i1 resident; ta' I-Islat

Kontraenti I-ichor s handu j itnaqqas. ghall-isl:.op Ii jig; stabbilit i1-kapi tal taxxabbli ta'

dik I-impriia, tallt dawk I-isless kundiujoniji et bhallikieku dan ki en sar rna' resident;

ta' I- Isla! l-ewwel imsemmi.

4 . Imprii i la' Stat Kontraenti. Ii l-kapitaJ taghhom ikun proprjetA ta ' jew

ikkonlrollat minn , ghal koll ox jew fpart i, direttament jew indirettament, res identi

wiehed jew aklar la' I-Istat I-iehor, rna jkunux suggetti fI- lstal l-ewwe1 imsemmi ghal

xi lassazzjoni jew xi htiega Ii ghandhom x'jaqsmu maghha Ii tkun ohra jew ta' attar

piz mil-tassazzjoni u hligiet Ii ghandhom x'jaq smu maghha Ii impriZi ohra bhalhom

ta ' dak I-Istat l-ewwel imsemmi huma jew jistgh u jkunu suggetti ghalihom.

5. Xej n Ii hemm Nan l-Artiklu rna ghandu jilqies Ii jorbot Slat Kontraenti Ii

jaghli lil indi vidwi Ii jlrunu residenti ta ' I-Istat Kontraenti I-iehor xi tnaqqis personali,

he lsien jew tnaqqis ghall-finijiet ta' taxxa minhabba l-islalUs Civili , ir.responsabbiltajiet

lal-fa milja jew kull Cirkostanza personali ohra Ii huwajaghti Iir-residenti tieghu stess.

6 . Id-dispozizzjonijie t ta ' dan I-Aniklu ghandhom japplikaw, mi nkejja d-

dispozizzjonijiel ta' I-Artik!u 2, ghal taxxi ta' kull ghamla u deskrizzjoni.

ProCedura ghal Ftehlm Retlproku

I. Meta persuna jidhrilha Ii I-aujonijiet ta ' l-awtori tA kompetenti ta' wiehed

mill-Istali Kontraenli jew tat-Inejn iwasslu jew jisighu jwasslu Ii tigi intaxxata mhux

skond id-dispozizzjonijiet la' dan il-Ftehim, hija ti sta' , minkejja r-rimedji provduti

bi l-ligi domestika ta' dawk I-Istati, tipprezenta I-kaz taghha lill-awtorit! kompetenli

la' I-Istat Kontraenti Ii lieghu hija residenti jew,jekk il-kai taghha jkun jaqa' tahl iI-

paragrafu I ta' I-Artik!u 24, lill-awtorilA kompetenti ta' I-Istal Kontraenti Ii laghha

tkun cittadin o II-kai ghandu jigi pre"ientat fi zmien tlett snin mill-ewwel noti fika ta ' 1-

IZzjoni Ii tirri zulta rtassazzjoni Ii rn a tkunx skond id-dispozizzjonijiet tal -Ftehim.

2 . L-awtoritA kompetenti ghandha tarn,jekk l-oggezzjoni tidhrilha Ii tkun wahda

gustifikata u jell: hi nnifisha rna tkunx tista' lassl ghal soluzzjoni sodisfatenti, Ii

B 73S

tiddcCiedi l-bz hi fteh im reCiproku rna' '·awtoritil kompetenti ta' 1-lslIt Kon traenti 1-

ichor, hil-ghan Ii ligi evitata IBssanjoni mhux skond dan il-Ftehim . Kull ftehim milhuq

ghandu jilwenaq minkejja kull imien la' skadenz.a slipulal 1iI-ligi dome stika ta' I-Istali

Kontraenti.

3. L-awtoritajiet kompetenti ta' I-ISla! Kontrac:nti ghandhom jaraw Ii jirrisolvu

hi ftehim rei:iproka xi diffikultajiel jcw dubbji Ii jinqalghu dwar I-i nlerpretazzjoni jew

l-applikazzjoni tal-Ftehim . Dawn jistghu ukoll jikkonsultaw flimkien dwar it-tnc:hhija

lat-taxxa doppja fdawk il-kaii Ii rna jigix provdUl dwarhom fiI -Ftchim.

4 . L-awtoritajic:t kompetc: nti la' I-Istat Kon traenti jislghu j ikkomunikaw

direttamenl rna ' xulxin bil.ghan Ii jintlahaq ftehim dw ar kif hemm fiI- paJ1lgrafi ta'

qabel. M eta sabiexjintlahaq ftehim jidhc:r Ii j kun rakkomandabbli Ii jsir skambju orali

la' fc hmiel , dak I- iskambju jista' jsehh tramite Kumm issjoni Ii tkun likkonsisli

frapprei.enlanli ta' I-awloritajiel kompelenli ta' I-Istali KonU'aenli.

AII.TlKW26

Tibdil ta'lnformaz~oni

I . L-awtori tajiet kompetenti ta' I- Istati Kontraen ti ghandhom jibdlu dik 1-

informazzjoni Ii lkun mehtiega sabiex j itwenqu d-dispoiizzjonijiet ta' dan il-Ftehim

jew tal-ligijiet domestiCi ta' I-Istat; Kontraenti dwar ta.ni milqula bil-Ftehim safej n il-

tassazzjon i ma Imux kontra l-Ftehirn. It-libdil la' infonnazzjoni mhllw icx ri strett bl-

Aniklu I . KlIll infonnazzjoni Ii tasal ghand Stal Konttaenti ghandha titqies sigrieta bl-

istess mod bhaJ informazzjoni miksllba taht il-ligijiet domestiCi ta ' dak I-Istat u ghandha

tilgharraf biss Iii persuni jew aWloritajiel (maghduda qrati u Korpi amministrattivi)

irndahhla fl-istima jew gbi r ta', I-infurzar jew prosekllzzjon; dw ar, jew il-qtugh ta'

appelli dwar , it-taxxi Ii jaqghu tahl il-Ftehi rn. Dawn il-persuni jew aWloritajiet ghnndhorn

jlliaw I-inforrnazzjoni ghal dawk I-ghanij iet biss . H uma jistghu j ikxfu d ik 1-

infonnazzjoni fj proeedimenti Ii jsiru fqoni pubblika jew fscntenzi tal-qoni.

2, F'ebda kai rn a ghandhorn id-dispo:i:izzjonijiet tal-paragrafll 1 ta' dan I-Aniklll

jilqiesu Ii jimponu fuq Slat Konttaenti l-obbligu

(a) Ii j iehu rn iillri arnrninistrattivi Ii rna jaqbl ux mal -ligijiet jew l-uianza

amrninistraniva ta' dak I-Istat Kontrae nti jew ta' I-ie hor

(b) Ii jaghti infonnazzjoni Ii rna tkunx tista' linkiseb tahl il-Iigijiet jew tiI-

kof'S nonnali la' I-uianza amrninistrattiva ta ' dak I-Istat Koottaenti jew la' I-iehor;

(c) Ii jaghti infonnazzjoni Ii tikxef xi sigriet tal-kummerc, tan-negozju,

industrijali, kummerejalijew profes.sjonali jew proCess tal -kurnmere,jew li jaghli

infonnazzjoni Ii I-kx if taghha j kun kontta l-ordn i pobbliku (ordrt: public).

... Rll KW27

Agenti Diplomaticl u umcjall Konsularl

Ebda haga f'dan il-Ftehim rna ghalldha toiqol i1-privileggi fiskali la' agenti

diplomatic! jew ta' ufficjali konsulari tab! ir-regoli generali tad-dritt intemazzjonali

jew taht id-dispozizzjonijiet la' kull ftehim speCjali.

ARl1KWZS

Eskluijoni ta' XI Kumpanniji

Id-dispozizzjonijiel ta' dan il-Ftehirn m'ghandhomll japplikaw ghal

1. kumpanniji Ii j kunu jgawdu lraUamen! fi skali spei;jaJi bis-sahha tal-ligijiet jew tal-

prattika amministrattiva ta' xi wiehed mill-lstati Kontraenti. Anqas rna ghandhom ikunu

jappJikaw ghal income Ii residenti ta' I-Istat Kontraenti I-iehor jikseb minn dawk iI-

kumpanniji,jew ghal ishmajew jeddij iet ohra fdawk iJ.:trumpanniji Ii jkollhom bhala

sid iii dik il-persuna.

2. Il-Gvemijiet la' I-Istati Kontraenti ghandhom perjodikament jaqblu Iiema

trattament fiskali specjali jkun inti:i: tahl id-dispo:i:izzjonijiet tal-paragrafu 1 ta' dan 1-

Aniklu.

ARTIKLU 29

Bldu fis-Sehh

1. II-Gvem ijiel tal-Istati KOnlraenli ghandhom javiaw iii xulxin meta jkunu

tweltqu l-hligiet kostituzzjonali ghall-bidu fis·sehh ta' dan il·Flehim.

2. II-Ftehim ghandu j ibdajsehh tlelin jum warn d-data ta' l-ahhar avvi:i: moghti

skond rna hemrn fiI-paragrafu I u d-dispo:i:izzjonijiet tieghu ghandu jkollhom sehh

(a)

fLussemburgu;

(i) ghar-rigward ta' taxxi mi:i:muma f'ras iI·ghajn, dwar income

miksub 0-1 la' Jannar jew wara dik id-data fis-sena kalendarja Ii fiha jibda

jsehh il·Ftehirn;

(ii) ghar-rigward ta' taxxi fuq I-income u taxx i fuq il.kapital ohra,

dwar taxxi Ii j ithallsu ghaJ kull sena taxxabbli Ii libda 0-1 ta' Jannar jew

wara dik id-data fis·sena kaJendarja Ii fihajibda jsehh il-Ftehim;

(b)

fMalta

ghar-rigward ta' taxxi Ii jingabru ghal kull sena la' Slima Ii tibda 0 - 1 la'

Jannar jew wara dik id·data fis-sena kaJendarja Ii ligi minnufih warn s· sena

Ii fih ajibdajsehh il·Ftehim.

m

B

AR1lKLU 1O

Terml~nl

Dan i1-Ftehim ghandu j ibqa' jsel'lh sakemm jigi terminal minn Sial Kontraenti.

Kull wiehed mill-Istati Kontraenti jista' jlemm il-ftehim, pennezz ta' kanali

diplomatici , billijaghli avvii tat-Ienn inaz.zjoni mill-anqas sitt xhur qabe l il-tmic m ta'

xi scna kalendarja Ii ligi wara perijodu ta' I\ames snin minn meta I-Ftthimjibda jschtl .

Pdak il-W, il-Ftehim rna ghandux jibqa' tis-sci'll'!

I . rLussemburgu;

(a) ghar.rigward la' laxxi miimuma rras il-ghajn , dwar income

miksub fl-I ta' Jannar jew waradik id-data tis-sena kalendarja Ii lig; minnufih

wara s-scna Ii fihajinghata I-avvii:;

(b) ghar-rigward ta' taxxi fuq j·incotrn! u taxxi fuq il-kapiUll ohra,

dwar taxxi Ii jitl'lallsu ghal kul! scna taxxabbli Ii libda fl - 1 ta' Jannar jew

waradi_k id-data fis-senakalendarja Ii tigi minnufih warn s-scna Ii fihajinghata

I-avvi:i;

2. rMalta

ghar-rigward ta' talUi Ii jingabru ghas-sena ta' slima Ii libda fl -J la'

Jannar jew wara dik id·data fiHieni sena kalendarja Ii tigi minnufih wara s·

sena Ii fihajinghara l·avviz.

B 'xiehda ta' dan is-souoskriui, awtorizzari kif imiss biex jagh mlu dan, iffirmaw

dan il·Fteh im.

Maghmul in duplikar gewwa Lussemburgu ilium id-29 ta' April, 1994 f1 -i1sien

FranCiz u Ingl ii, u i-:iewg testi huma awte ntici indaqs.

Ghall-Gvem ta ' Malta

Ghall-Gvem tal-Gran Dukat

ta'Lussembu rgu

Guido de Marco

Jacques F . Poos

Vici Prim Minislro,

Vici Prim Ministru,

Ministru ta' I·Affarijiet Barranin

Ministro la ' 1.Affarijiet Barranin ,

Kummere Barrani u Ko-operazzjoni

NOTI MIFrEHMA

Ir-rappreientanti taI -Gvcm ta' Malta u tal-Gvem tal-Gran Dutal la' Lussemburgu

b'dan qcghdin j irregisltaw din il-fehma Ii gejja Ii ntlahqet bejn ii-lewg Gvc:mijiet

matul in-negoljati sabicx jigi konklu! i1-Ftehim bcjn Malia u I-Gran Dukal la '

Lussemburgu ghall-Hc:Jsicn minn Taua Doppja u biex tigi Evilats Evai:joni Fiskali

dwar Tux; fuq I-Income u fuq il-Kapital, iffirmat gewwa Lusse mburgu ilium

(hawnhekk i:i:jed 'il quddiem imsejjah "il-Ftehim")

1. B ' ri fere nza ghas-s ubparagra(u (c) tal-paragrafu I ta' I-Artiklu 23 taJ-FIc:him

i-espressjoni "jekk l-impriia tkun tgawdi gewwa Malta !ranament fiskali spei:jali bis-

sahha tal-ligijie! jew tal-prattika amministrattiva la' Malta" tfisser impriia la'

Lussemburgu b'fergha gewwa Maim skond id-dispoiizzjonijiet tas-subartikolu (3) ta'

l-artikolu 22 ta' I-Au ta ' 1- 1988 dwar Attivitajiet Kummeri:jali Intemazzjonali ta ' Malta.

2. B 'riferenza ghalJ-Artikolu 28 lai·Flehim, l-espressjoni "kumpanniji Ii jkunu

jgawdu traltament fiskati speCjali bis-sahha tal-ligijietjew tal'praltika amministrattiva

ta' xi wiehed mill· lslali Kontrnenli" tiisser

(a) fil-kai taO Lusscmburgu holding companit!s fis ·sens ta' I·A u (loi) tal-

31 ta' Lulju, 1929 u tad· Digriet (arrete gran-ducal) tas·17 tn ' Dicembru, 1938;

(b) fil·kai ta' Malta kumpanniji Ii huma suggeui ghal regim ta ' laxxa spec

jal i taht l-A u ta' 1-1988 dwar Auivitajiet Kummeri:jali Intemaujonali la' Malta

hl lef ghai kumpanniji Ii jaghiJu skond l·artikolu 41 ta' I-imscmmi Att Ii jkunu

suggeui ghad-dispoiizzjonijiet nonnal i ta' I·Au dwar it·Taxxa fuq J-lncQm£ (Kap.

123),

Lusscmbu rgu ,29 taO April, 1994

Ghall-Gvem ta ' Malta

Ghall·Gvem tal-Gran Dukat

la' Lussemburgu

Jacques F. Poos

G ui do de Marco

ViCi Prim Ministru,

ViCi Prim Ministru,

Ministru ta ' I-Affarijiet Barranin,

Minjstru ta' I-Affarijiet Barranin

Kummer(: Barran i u Ko-operazzjoni