Double Taxation Relief (Taxes on Income)

L.N. 343 of 2009

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(Montenegro) Order, 2009

IN exercise of the powers conferred by article 76 of the

Income Tax Act, the Minister of Finance, the Economy and

Investment has made the following order:-

This title of this order is the Double Taxation Relief Citation.

(Taxes on Income) (Montenegro) Order, 2009.

FTEHIM BEJN

MALTA U

MONTENEGRO

DWAR ELSIEN MINN TAXXA DOPPJA

DWAR TAXXI FUQ L-INCOME

MALTA

U

MONTENEGRO

billi jixtiequ jagmlu Ftehim dwar elsien minn taxxa doppja dwar taxxi fuq l-

income, ftiehmu kif ej

B

Artikolu 1

PERSUNI KOPERTI

Dan il-Ftehim gandu japplika gal persuni li jkunu residenti fi Stat Kontraenti

wieed jew fit-tnejn li huma.

Artikolu 2

TAXXI KOPERTI

1. Dan il-Ftehim gandu japplika gat-taxxi fuq l-income imposti f’isem Stat

Kontraenti jew awtoritajiet lokali, irrispettivament mill-mod kif dawn jinabru.

2. Gandhom jitqiesu bala taxxi fuq l-income it-taxxi kollha imposti fuq l-income

totali, jew fuq elementi ta’ income, inklui taxxi fuq dul mill-bejg ta’ proprjetà

mobbli jew immobbli, taxxi fuq l-ammonti totali ta’ pagi jew salarji mallsa mill-

imprii, kif ukoll taxxi fuq l-apprezzament ta’ kapital.

It is hereby declared:-

(a) that the arrangements specified in the Convention

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

Montenegro with a view to affording relief from double

taxation in relation to the following taxes imposed by the

laws of Montenegro

(1)

the tax on profit;

(2)

the tax on income;

(b) that it is expedient that those arrangements should

have effect;

(c) that the Convention has entered into force on the

23 September, 2009.

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Schedule

BETWEEN

MALTA

AND

MONTENEGRO

FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON

INCOME

MALTA

AND

MONTENEGRO

desiring to conclude a Convention for the avoidance of double taxation with respect to taxes

on income,

have agreed as follows

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Article 1

PERSONS COVERED

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

States.

Article 2

TAXES COVERED

1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or

local authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total income, or on

elements of income, including taxes on gains from the alienation of movable or immovable

property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes

on capital appreciation.

The existing taxes to which the Convention shall apply are

1) in Montenegro

(1) the tax on profit;

(2) the tax on income.

(hereinafter referred to as ''Montenegrin tax'');

2) in Malta

the income tax.

(hereinafter referred to as ''Malta tax'').

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

significant changes that have been made in their taxation laws.

Article 3

GENERAL DEFINITIONS

1. For the purposes of this Convention

the terms ''a Contracting State'' and ''the other Contracting

1)

State'' mean Montenegro or Malta, as the context requires;

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the term ''Montenegro'' means the State of Montenegro and, when used in a

geographical sense, it means the land territory of Montenegro, its internal sea

waters and the belt of the territorial sea, the air space thereover, as well as the

seabed and subsoil of the part of the high sea outside the outer limit of the

territorial sea over which Montenegro exercises its sovereign rights for the

purpose of exploration and exploitation of their natural resources in accordance

with its internal legislation and international law;

the term ''Malta'' means the Republic of Malta and, when used in a

geographical sense, means the Island of Malta, the Island of Gozo and the other

islands of the Maltese archipelago including the territorial waters thereof, as

well as any area of the seabed, its subsoil and the superjacent water column

adjacent to the territorial waters, wherein Malta exercises sovereign rights,

jurisdiction, or control in accordance with international law and its national law,

including its legislation relating to the exploration of the continental shelf and

exploitation of its natural resources;

the term ''national'' means

(1)

any individual possessing the nationality of a Contracting State;

(2)

any legal person, partnership or association deriving its status as

such from the laws in force in a Contracting State.

the term ''person'' includes an individual, a company and any

other body of persons;

the term ''company'' means any body corporate or any entity

that is treated as a body corporate for tax purposes;

the terms ''enterprise of a Contracting State'' and ''enterprise of

the 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 State;

the term ''international traffic'' means any transport by a ship or

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

ship or aircraft is operated solely between places in the other Contracting State;

9) the term ''competent authority'' means

(1)

in Montenegro, the Ministry of Finance or its authorized representative;

(2)

in Malta, the Minister responsible for finance or his authorized

representative.

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

not defined therein shall, unless the context otherwise requires, have the meaning that it has at

that time under the law of that State for the purposes of the taxes to which the Convention

applies, any meaning under the applicable tax laws of that State prevailing over a meaning

given to the term under other laws of that State.

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Article 4

RESIDENT

1. For the purposes of this Convention, the term ''resident of a Contracting State'' means

any person who, under the laws of that State, is liable to tax therein by reason of his domicile,

residence, place of management or any other criterion of a similar nature, and also includes

that State or local authority thereof. This term, however, does not include any person who is

liable to tax in that State in respect only of income from sources in that State.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both

Contracting States, then his status shall be determined as follows

1)

he shall be deemed to be a resident only of the State in which he

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

home available to him in both States, he shall be deemed to be a

resident only of the State with which his personal and economic

relations are closer (centre of vital interests);

2)

if the State in which he has his centre of vital interests cannot be determined, or

if he has not a permanent home available to him in either State, he shall be

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

3)

if he has an habitual abode in both States or in neither of them, he shall be

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

4)

if he is a national of both States 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 paragraph 1 a person other than an individual is a

resident of both Contracting States, then it shall be deemed to be a resident only of the State in

which its place of effective management is situated.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, the term ''permanent establishment'' means a fixed

place of business through which the business of an enterprise is wholly or partly carried on.

2. The term ''permanent establishment'' includes especially

1)

a place of management;

2)

a branch;

3)

an office;

4)

a factory;

5)

a workshop, and

6)

a mine, an oil or gas well, a quarry or any other place of

extraction of natural resources.

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3. The term "permanent establishment" likewise encompasses

a building site, a construction, assembly or installation project or supervisory

activities in connection therewith, but only where such site, project or activities

continue for a period of more than nine months;

the furnishing of services, including consultancy services, by an enterprise

through employees or other personnel engaged by the enterprise for such

purpose, but only where activities of that nature continue (for the same or a

connected project) within a Contracting State for a period or periods

aggregating more than six months within any twelve month period.

4. Notwithstanding the preceding provisions of this Article, the term ''permanent

establishment'' shall be deemed not to include

the use of facilities solely for the purpose of storage, display or

delivery of goods or merchandise belonging to the enterprise;

the maintenance of a stock of goods or merchandise belonging

to the enterprise solely for the purpose of storage, display or

delivery;

the maintenance of a stock of goods or merchandise belonging

to the enterprise solely for the purpose of processing by another

enterprise;

the maintenance of a fixed place of business solely for the

purpose of purchasing goods or merchandise or of collecting

information, for the enterprise;

the maintenance of a fixed place of business solely for the

purpose of carrying on, for the enterprise, any other

activity of a preparatory or auxiliary character;

the maintenance of a fixed place of business solely for any

combination of activities mentioned in sub-paragraphs 1) to 5),

provided that the overall activity of the fixed place of business

resulting from this combination is of a preparatory or auxiliary

character.

Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent

of an independent status to whom paragraph 6 applies - is acting on behalf of an enterprise and

has, and habitually exercises, in a Contracting State an authority to conclude contracts in the

name of the enterprise, that enterprise shall be deemed to have a permanent establishment in

that State in respect of any activities which that person undertakes for the enterprise, unless the

activities of such person are limited to those mentioned in paragraph 4 which, if exercised

through a fixed place of business, would not make this fixed place of business a permanent

establishment under the provisions of that paragraph.

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An enterprise shall not be deemed to have a permanent establishment in a Contracting State

merely because it carries on business in that State through a broker, general commission agent

or any other agent of an independent status, provided that such persons are acting in the

ordinary course of their business. However, when the activities of such an agent are devoted

wholly or almost wholly on behalf of that enterprise, and conditions are made or imposed

between that enterprise and the agent in their commercial and financial relations which differ

from those which would have been made between independent enterprises, he will not be

considered an agent of an independent status within the meaning of this paragraph.

The fact that a company which is a resident of a Contracting State controls or is controlled

by a company which is a resident of the other Contracting State, or which carries on business

in that other State (whether through a permanent establishment or otherwise) shall not of itself

constitute either company a permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Contracting State from immovable property (including

income from agriculture or forestry) situated in the other Contracting State may be taxed in

that other State.

2. The term ''immovable property'' shall have the meaning which it has under the law of the

Contracting State in which the property in question is situated. The term shall in any case

include property accessory to immovable property, livestock and equipment used in agriculture

and forestry, rights to which the provisions of general law respecting landed property apply,

usufruct of immovable property and rights to variable or fixed payments as consideration for

the working of, or the right to work, mineral deposits, sources and other natural resources;

ships, boats and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or

use in any other form of immovable property.

4. The provisions of paragraphs 1 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.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless

the enterprise carries on business in the other Contracting State through a permanent

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

that permanent establishment.

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2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries

on business in the other Contracting State through a permanent 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 it were a distinct and separate enterprise engaged in the

same or similar activities under the same or similar conditions and dealing wholly

independently with the enterprise of which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall be allowed as

deductions expenses which are incurred for the purposes of the permanent establishment,

including executive and general administrative expenses so incurred, whether in the State in

which the permanent establishment is situated or elsewhere.

4. Insofar as it has been customary in a Contracting State to determine the profits to be

attributed to a permanent establishment on the basis of an apportionment of the total profits of

the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State

from determining the profits to be taxed by such an apportionment as may be customary; the

method of apportionment adopted shall, however, be such that the result shall be in accordance

with the principles contained in this Article.

5. No profits shall be attributed to a permanent establishment by reason of the mere purchase

by that permanent establishment of goods or merchandise for the enterprise.

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

establishment shall be determined by the same method year by year unless there is good and

sufficient reason to the contrary.

7. Where profits include items of income which are dealt with separately in other Articles of

this Convention, then the provisions of those Articles shall not be affected by the provisions of

this Article.

Article 8

INTERNATIONAL TRAFFIC

1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in

international traffic shall be taxable only in that State.

2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a

joint business or an international operating agency.

Article 9

ASSOCIATED ENTERPRISES

1. Where

1)

an enterprise of a Contracting State participates directly or

indirectly in the management, control or capital of an enterprise of the other

Contracting State, or

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2)

the same persons participate directly or indirectly in the

management, control or capital of an enterprise of a Contracting State and an enterprise

of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in their

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

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

to one of the enterprises, but, by reason of those conditions, have not so accrued, may be

included in the profits of that enterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that State - and taxes

accordingly - profits on which an enterprise of the other Contracting State has been charged to

tax in that other State and the profits so included are profits which would have accrued to the

enterprise of the first-mentioned State if the conditions made between 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 determining such adjustment, due regard shall be had to the other provisions of this

Convention and the competent authorities of the Contracting States shall if necessary consult

each other.

Article 10

DIVIDENDS

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

other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of which the company

paying the dividends is a resident and according to the laws of that State, but

1)

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

to a resident of Malta who is the beneficial owner thereof, the tax so charged by

Montenegro shall not exceed

(1)

5 per cent of the gross amount of the dividends if the beneficial owner is a

company which holds directly at least 25 per cent of the capital of the company

paying the dividends;

(2)

10 per cent of the gross amount of the dividends in all other cases;

2)

where the dividends are paid by a company which is a resident of Malta to a

resident of Montenegro 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 taxation of the company in respect of the profits out of

which the dividends are paid.

3. The term ''dividends'' as used in this Article means income from shares or other rights, not

being debt-claims, participating in profits, as well as income from other corporate rights which

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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 1 and 2 shall not apply if the beneficial owner of the

dividends, being a resident of a Contracting State, carries on business in the other Contracting

State of which the company paying the dividends is a resident, through a permanent

establishment situated therein, or performs in that other State independent personal services

from a fixed base situated therein, and the holding in respect of which the dividends are paid is

effectively connected with such permanent establishment or fixed base. In such case the

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

5. 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 dividends are paid to a resident of that other State or

insofar as the holding in respect of which the dividends are paid is effectively connected with a

permanent establishment or a fixed base situated in that other State, nor subject the company's

undistributed profits to a tax on the company's undistributed profits, even if the dividends paid

or the undistributed profits consist wholly or partly of profits or income arising in such other

State.

Article 11

INTEREST

1. Interest 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 interest may also be taxed in the Contracting State in which it arises and

according to the laws of that State, but if the beneficial owner of the interest is a resident of the

other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of

the interest.

3. Notwithstanding the provisions of paragraph 2, interest shall be exempted from tax in the

Contracting State in which it arises if it is derived and beneficially owned by the Government

of the other Contracting State or local authority thereof, the Central Bank or any financial

institution wholly owned by that Government.

4. The term ''interest'' as used in this Article means income from debt-claims of every kind,

whether or not secured by mortgage and whether or not carrying a right to participate in the

debtor's profits, and in particular, income from government securities and income from bonds

or debentures, including premiums and prizes attaching to such securities, bonds or

debentures. Penalty charges for late payment shall not be regarded as interest for the purpose

of this Article.

5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the

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

State in which the interest arises, through a permanent establishment situated therein, or

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

and the debt-claim in respect of which the interest is paid is effectively connected with such

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permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14,

as the case may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that

State. Where, however, the person paying the interest, whether he is a resident of a Contracting

State or not, has in a Contracting State a permanent establishment or a fixed base in connection

with which the indebtedness on which the interest is paid was incurred, and such interest is

borne by such permanent establishment or fixed base, then such interest shall be deemed to

arise in the State in which the permanent establishment or fixed base is situated.

7. 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 interest, having regard to the

debt-claim for which it is paid, exceeds the amount which would 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.

Article 12

ROYALTIES

1. 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 Contracting State in which they arise and

according to the laws of that State, but if the beneficial owner of the royalties is a resident of

the other Contracting State, the tax so charged shall not exceed

1)

5 per cent of the gross amount of the royalties within the meaning of subparagraph

1) of paragraph 3 of this Article;

2) 10 per cent of the gross amount of the royalties within the meaning of subparagraph

2) of paragraph 3 of this Article.

3. The term ''royalties'' as used in this Article means payments of any kind received as a

consideration

1) for the use of, or the right to use, any copyright of literary, artistic or

scientific work including cinematograph films or films or tapes used for

radio or television broadcasting; and

2) for the use of, or the right to use, any patent, trade mark, design or model, plan,

secret formula or process, or for the use of, or the right to use, industrial,

commercial, or scientific equipment, or for information concerning industrial,

commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties,

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

which the royalties arise, through a permanent establishment situated therein, or performs in

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

or property in respect of which the royalties are paid is effectively connected with such

permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14,

as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that

State. Where, however, the person paying the royalties, whether he is a resident of a

Contracting State or not, has in a Contracting State a permanent establishment or a fixed base

in connection with which the liability to pay the royalties was incurred, and such royalties are

borne by such permanent 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, having 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 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.

Article 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of immovable

property referred to in Article 6 and situated in the other Contracting State may be taxed in that

other State.

2. Gains from the alienation of movable property forming part of the business property of a

permanent establishment which an enterprise of a Contracting State has in the other

Contracting State or of movable property pertaining to a fixed base available to a resident of a

Contracting State in the other Contracting State for the purpose of performing independent

personal services, including such gains from the alienation of such a permanent establishment

(alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.

3. Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft

operated in international traffic, or movable property pertaining to the operation of such ships

or aircraft, shall be taxable only in that State.

4. Gains derived by a resident of a Contracting State from the alienation of shares or

comparable interests in a company the property of which consists directly or indirectly

principally of immovable property situated in a Contracting State may be taxed in that State.

5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 , 3

and 4 shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14

INDEPENDENT PERSONAL SERVICES

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1. Income derived by a resident of a Contracting State in respect of professional services or

other activities of an independent character shall be taxable only in that State except in the

following circumstances, where such income may also be taxed in the other Contracting State

1)

if he has a fixed base regularly available to him in the other

Contracting State for the purpose of performing his activities; in

that

case, only so much of the income as is attributable to that

fixed base may be

taxed in that other Contracting State; or

2)

if his stay in the other Contracting State is for a period or periods amounting to

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

commencing or ending in the fiscal year concerned; in that case, only so much

of the income as is derived from his activities performed in that other

Contracting State may be taxed in that other State.

2. The term ''professional services'' includes especially independent scientific, literary,

artistic, educational or teaching activities as well as the independent activities of physicians,

lawyers, engineers, architects, dentists and accountants.

Article 15

DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar

remuneration derived by a resident of a Contracting State in respect of an employment shall be

taxable only in that State unless the employment is exercised in the other Contracting State. If

the employment is so exercised, such remuneration as is derived therefrom may be taxed in

that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a

Contracting State in respect of an employment exercised in the other Contracting State shall be

taxable only in the first-mentioned State if

1)

the recipient 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 fiscal year concerned, and

2)

the remuneration is paid by, or on behalf of, an employer who is

not a resident of the other State, and

3)

the remuneration is not borne by a permanent establishment or a

fixed base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of

an employment exercised aboard a ship or aircraft operated in international traffic by an

enterprise of a Contracting State, may be taxed in that State.

Article 16

DIRECTORS' FEES

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B

Directors' fees and other similar payments derived by a resident of 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.

Article 17

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a

Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste,

or a musician, or as a sportsman, from his personal activities as such 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 but to another person,

that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the

Contracting State in which the activities of the entertainer or sportsman are exercised.

3. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, income mentioned in

this Article shall be exempt from tax in the Contracting State in which the activity of the

entertainer or sportsman is exercised provided that this activity is supported in a considerable

part out of public funds of the State or a local authority thereof or of the other State or a local

authority thereof, or the activity is exercised under a cultural or sports agreement or

arrangement between the Contracting States.

Article 18

PENSIONS

1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar

remuneration paid to a resident of a Contracting State in consideration of past employment

shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration

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

consideration of past employment may be taxed in the first-mentioned State to the extent that

such pensions and other similar remuneration are not subject to tax in that other State.

3. Notwithstanding the provisions of paragraph 1, pensions paid and other payments made

under the social security legislation of a Contracting State shall be taxable only in that State.

Article 19

GOVERNMENT SERVICE

1. 1)

Salaries, wages and other similar remuneration, other than a

pension, paid by a Contracting State or a local authority thereof

to

an individual in respect of services rendered to that State or authority shall

be taxable only in that State.

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2)

However, such salaries, wages and other similar remuneration

shall be taxable only in the other Contracting State if the services

are

rendered in that State and the individual is a resident of that

State who

(1)

is a national of that State; or

(2)

did not become a resident of that State solely for the

purpose of rendering the services.

2. 1)

Any pension paid by, or out of funds created by, a Contracting

State

or a local authority thereof to an individual in respect of services rendered to that State

or authority shall be taxable only in that State.

2)

However, such pension shall be taxable only in the other

Contracting State if the individual is a resident of, and a national

of,

that State.

3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages and other similar

remuneration, and to pensions, in respect of services rendered in connection with a business

carried on by a Contracting State or a local authority thereof.

Article 20

STUDENTS

Payments which a student or business apprentice who is or was immediately before visiting a

Contracting State a resident of the other Contracting State and who is present in the

first-mentioned State solely for the purpose of his education or training receives for the

purpose of his maintenance, education or training shall not be taxed in that State, provided that

such payments arise from sources outside that State.

Article 21

OTHER INCOME

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the

foregoing Articles of this Convention shall be taxable only in that State.

2. The provisions of paragraph 1 shall not apply to income, other than income from immovable

property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident

of a Contracting State, carries on business in the other 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 Article 7 or Article 14, as the case may be, shall apply.

Article 22

ELIMINATION OF DOUBLE TAXATION

1. Where a resident of a Contracting State derives income which, in accordance with the

provisions of this Convention, may be taxed in the other Contracting State, the first-mentioned

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State shall allow as a deduction from the tax on the income of that resident, an amount equal to

the income tax paid in that other State. Such deduction, however, shall not exceed that part of

the income tax, as computed before the deduction is given, which is attributable to the income

which may be taxed in that other State.

2. Where in accordance with any provision of the Convention income derived by a resident of

a Contracting State is exempt from tax in that State, such State may nevertheless, in

calculating the amount of tax on the remaining income of such resident, take into account the

exempted income.

Article 23

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any

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

taxation and connected requirements to which nationals of that other State in the same

circumstances, in particular with respect to residence, are or may be subjected. This provision

shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents

of one or both of the Contracting States.

2. The taxation on a permanent establishment 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 of that other State carrying on the same activities. This provision

shall not be construed as obliging a Contracting State to grant to residents of the other

Contracting State any personal allowances, reliefs and reductions for taxation purposes on

account of civil status or family responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or

paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an

enterprise of a Contracting State to a resident of the other Contracting State shall, for the

purpose of determining the taxable profits of such enterprise, be deductible under the same

conditions as if they had been paid to a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by one or more residents of the other Contracting State, shall

not be subjected in the first-mentioned 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. The provisions of this Article shall apply to the taxes referred to in Article 2.

Article 24

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of the Contracting States result or

will result for him in taxation not in accordance with the provisions of this Convention, 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 1 of Article 23, to that of the Contracting State of which he is a

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national.The case must be presented within three years from the first notification of the action

resulting in taxation not in accordance with the provisions of the Convention.

2. The competent authority shall endeavour, if the objection appears to it to be justified and if

it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement

with the competent authority of the other Contracting State, with a view to the avoidance of

taxation which is not in accordance with this Convention. Any agreement reached shall be

implemented notwithstanding any time limits in the domestic law of the Contracting States.

3. The competent authorities of the Contracting 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 taxation in cases not

provided for in the Convention.

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

directly, including through a joint commission consisting of themselves or their

representatives, for the purpose of reaching an agreement in the sense of the preceding

paragraphs.

Article 25

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information as is

necessary for carrying out the provisions of this Convention or of the domestic laws of the

Contracting States concerning taxes covered by the Convention insofar as the taxation

thereunder is not contrary to the Convention, in particular for the prevention of fraud or

evasion of such taxes. The exchange of information is not restricted by Article 1. Any

information received by a Contracting State shall be treated as secret in the same manner as

information obtained under the domestic laws of that State and shall be disclosed only to

persons or authorities (including courts and administrative bodies) concerned with the

assessment or collection of, the enforcement or prosecution in respect of, or the determination

of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall

use the information only for such purposes. They may disclose the information in public court

proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting

State the obligation

1)

to carry out administrative measures at variance with the laws

and administrative practice of that or of the other Contracting

State;

2)

to supply information which is not obtainable under the laws or in

the normal course of the administration of that or of the other

Contracting State;

3)

to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, or

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information, the disclosure of which would be contrary to public

policy (ordre public).

Article 26

MEMBERS OF DIPLOMATIC MISSIONS

AND CONSULAR POSTS

Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions

or consular posts under the general rules of international law or under the provisions of special

agreements.

Article 27

ENTRY INTO FORCE

1. The Contracting States shall notify each other in writing, through diplomatic channels, that

the procedures required by their domestic laws for entry into force of this Convention have

been complied with.

2. This Convention shall enter into force on the date of the later of these notifications and its

provisions shall have effect

1) in Montenegro

in respect of the taxes on income derived in

each fiscal year beginning on or after the

first day of January in the calendar year next

following the year in which the Convention

enters into force;

2) in Malta

in respect of taxes on income derived during

any calendar year or accounting period, as

the case may be, beginning on or after the

first day of January immediately following

the date on which the Convention enters into

force.

Article 28

TERMINATION

This Convention shall remain in force until terminated by a Contracting State. Either

Contracting State may terminate the Convention, through diplomatic channels, by giving

written notice of termination at least six months before the end of any calendar year beginning

after the expiration of a period of five years from the date of its entry into force. In such event,

this Convention shall cease to have effect

1) in Montenegro

in respect of the taxes on income derived in

each fiscal year beginning on or after the first

day of January in the calendar year next

following the year in which the notice of

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termination has been given;

2) in Malta

in respect of taxes on income derived during

any calendar year or accounting period, as

the case may be, beginning on or after the

first day of January immediately following

the date on which the notice is given.

IN WITNESS whereof the undersigned, being duly authorized thereto, have signed this

Convention.

DONE at Marseille this 4th day of November 2008 in two originals, in the English and

Montenegrian languages, both originals being equally authentic.

Tonio Borg

Milan Rocen

FOR MALTA

FOR MONTENEGRO

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€1.86