Double Taxation Relief (Taxes on Income) (The Isle of Man) (theisleofman)

L.N. 162 of 2010

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income) (The Isle of Man)

Order, 2010

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

(Taxes on Income) (The Isle of Man) Order, 2010.

Article 2

AGREEMENT BETWEEN

MALTA

AND

THE ISLE OF MAN

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of Malta and the Government of the Isle of Man, desiring to conclude an

Agreement for the avoidance of double taxation and the prevention of fiscal evasion with

respect to taxes on income, have agreed as follows

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Article 1

PERSONS COVERED

This Agreement shall apply to persons who are residents of one or both of the Parties.

Article 2

TAXES COVERED

1. This Agreement shall apply to taxes on income imposed on behalf of a Party or of its political

subdivisions 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 and taxes

on the total amounts of wages or salaries paid by enterprises.

It is hereby declared:-

(a) that the arrangements specified in the Agreement

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

the Government of the Isle of Man with a view to affording

relief from double taxation in relation to the following taxes

imposed by the laws of the Isle of Man

-

taxes on income or profit;

(b) that it is expedient that those arrangements should

have effect;

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

26 February, 2010.”.

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The existing taxes to which this Agreement shall apply are

(a)

in Malta

the income tax;

(hereinafter referred to as "Malta tax").

(b)

in the case of the Isle of Man

taxes on income or profit,

(hereinafter referred to as "Manx tax").

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

imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes.

The competent authorities of the Parties shall notify each other of any significant changes which have

been made in their taxation laws.

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Article 3

GENERAL DEFINITIONS

1. For the purposes of this Agreement, unless the context otherwise requires

(a)

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 sea-bed, its sub-

soil 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;

(b)

the term "Isle of Man" means the island of the Isle of Man, including its territorial

sea, in accordance with international law;

(c)

the terms "a Party" and "the other Party" mean Malta or the Isle of Man, as the

context requires;

(d)

the term "person" includes an individual, a company and any other body of persons;

(e)

the term "company" means any body corporate or any entity that is treated as a body

corporate for tax purposes;

(f)

the terms "enterprise of a Party" and "enterprise of the other Party" mean respectively

an enterprise carried on by a resident of a Party and an enterprise carried on by a resident of

the other Party;

(g)

the term "international traffic" means any transport by a ship or aircraft operated by

an enterprise of a Party, except when the ship or aircraft is operated solely between places in

the other Party;

(h)

the term "competent authority" means

(i)

in the case of Malta: the Minister responsible for finance or his authorised

representative;

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(ii)

in the case of the Isle of Man, the Assessor of Income Tax or his delegate.

(i)

the term "national", in relation to a Party, means, where applicable

(i)

any individual possessing the nationality of a Party;

(ii)

any legal person, partnership or association deriving its status as such from

the laws in force in a Party.

2. As regards the application of the Agreement at any time by a Party, 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 Party for the purposes of the taxes to which the Agreement applies, any meaning under

the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of

that Party.

Article 4

RESIDENT

1. For the purposes of this Agreement, the term "resident of a Party" means any person who,

under the laws of that Party, 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 Party and any political

subdivision or local authority thereof and any pension fund or pension scheme recognised by that

Party. This term, however, does not include any person who is liable to tax in that Party in respect

only of income from sources in that Party.

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

then his status shall be determined as follows

(a)

he shall be deemed to be a resident only of the Party in which he has a permanent

home available to him; if he has a permanent home available to him in both Parties, he shall

be deemed to be a resident only of the Party with which his personal and economic relations

are closer (centre of vital interests);

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(b)

if the Party 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 Party, he shall be deemed to be a resident

only of the Party in which he has an habitual abode;

(c)

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

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

(d)

if he is a national of both Parties or of neither of them, the competent authorities of

the Parties 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 Parties, then it shall be deemed to be a resident only of the Party in which its place of

effective management is situated.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Agreement, 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

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop; and

(f)

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

resources.

3. A building site or construction or installation project constitutes a permanent establishment

only if it lasts more than six months.

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

shall be deemed not to include

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(a)

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

merchandise belonging to the enterprise;

(b)

the maintenance of a stock of goods or merchandise belonging to the enterprise

solely for the purpose of storage, display or delivery;

(c)

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 of business solely for the purpose of purchasing

goods or merchandise, or of collecting information, for the enterprise;

(e)

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;

(f)

the maintenance of a fixed place of business solely for any combination of activities

mentioned in sub-paragraphs (a) to (e), 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 Party an authority to conclude contracts in the name of the enterprise, that

enterprise shall be deemed to have a permanent establishment in that Party 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.

An enterprise shall not be deemed to have a permanent establishment in a Party merely

because it carries on business in that Party 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.

The fact that a company which is a resident of a Party controls or is controlled by a company

which is a resident of the other Party, or which carries on business in that other Party (whether

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

permanent establishment of the other.

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Article 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Party from immovable property (including income from

agriculture or forestry) situated in the other Party may be taxed in that other Party.

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

Party 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 Party shall be taxable only in that Party unless the enterprise

carries on business in the other Party 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

Party but only so much of them as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a Party carries on business in

the other Party through a permanent establishment situated therein, there shall in each Party be

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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 Party in which the permanent

establishment is situated or elsewhere.

4. Insofar as it has been customary in a Party 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 Party 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 Agreement, then the provisions of those Articles shall not be affected by the provisions of this

Article.

Article 8

SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise of a Party from the operation of ships or aircraft in international

traffic shall be taxable only in that Party.

2. For the purposes of this Article, profits derived from the operation in international traffic of

ships and aircraft include profits

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(a)

derived from the rental on a bareboat basis of ships and aircraft if operated in

international traffic; and

(b)

derived from the use, maintenance or rental of containers (including trailers and

related equipment for the transport of containers) used for the transport of goods or

merchandise,

where such rental profits or profits from such use, maintenance or rental, as the case may be, are

incidental to the profits described in paragraph 1.

3. 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

(a)

an enterprise of a Party participates directly or indirectly in the management, control

or capital of an enterprise of the other Party, or

(b)

the same persons participate directly or indirectly in the management, control or

capital of an enterprise of a Party and an enterprise of the other Party,

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 Party includes in the profits of an enterprise of that Party - and taxes accordingly -

profits on which an enterprise of the other Party has been charged to tax in that other Party and the

profits so included are profits which would have accrued to the enterprise of the first-mentioned Party

if the conditions made between the two enterprises had been those which would have been made

between independent enterprises, then that other Party shall make an appropriate adjustment to the

amount of the tax charged therein on those profits. In determining such adjustment, due regard shall

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be had to the other provisions of this Agreement and the competent authorities of the Parties shall if

necessary consult each other.

Article 10

DIVIDENDS

1. Dividends paid by a company which is a resident of a Party to a resident of the other Party

who is the beneficial owner thereof, shall be taxable only in that other Party.

2. However, so long as Malta operates a full imputation system of taxation of company profits,

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

Man who is the beneficial owner thereof, Malta may also charge tax on the gross amount of the

dividends, which tax shall not exceed that chargeable on the profits out of which the dividends are

paid.

3. Paragraphs 1 and 2 shall not affect the taxation of the company in respect of the profits out of

which the dividends are paid.

4. The term "dividends" as used in this Article means income from shares, mining shares,

founders' shares or other rights, not being debt-claims, participating in profits, as well as income from

other corporate rights which is subjected to the same taxation treatment as income from shares by the

laws of the Party of which the company making the distribution is a resident.

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

being a resident of a Party, carries on business in the other Party of which the company paying the

dividends is a resident, through a permanent establishment situated therein, or performs in that other

Party 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.

6. Where a company which is a resident of a Party derives profits or income from the other

Party, that other Party 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 Party 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 Party, nor subject the company's undistributed profits to a tax on the company's

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undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of

profits or income arising in such other Party.

Article 11

INTEREST

1. Interest arising in a Party and beneficially owned by a resident of the other Party shall be

taxable only in that other Party.

2. 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.

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the interest, being a

resident of a Party, carries on business in the other Party in which the interest arises, through a

permanent establishment situated therein, or performs in that other Party 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 permanent establishment or fixed base. In such case the provisions

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

4. 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 Party, due regard being had to the other provisions of this Agreement.

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Article 12

ROYALTIES

1. Royalties arising in a Party and beneficially owned by a resident of the other Party shall be

taxable only in that other Party.

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

consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work

including cinematograph films, any patent, trade mark, design or model, plan, secret formula or

process, or for information concerning industrial, commercial or scientific experience.

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the royalties, being a

resident of a Party, carries on business in the other Party in which the royalties arise, through a

permanent establishment situated therein, or performs in that other Party 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.

4. 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 Party, due regard being had to the other provisions

of this Agreement.

Article 13

CAPITAL GAINS

1. Gains derived by a resident of a Party from the alienation of immovable property referred to

in Article 6 and situated in the other Party may be taxed in that other Party.

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

permanent establishment which an enterprise of a Party has in the other Party or of movable property

pertaining to a fixed base available to a resident of a Party in the other Party 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 Party.

3. Gains derived by an enterprise of a Party from the alienation of ships or aircraft operated in

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

aircraft, shall be taxable only in that Party.

4. Gains derived by a resident of a Party from the alienation of shares deriving more than 50

percent of their value directly or indirectly from immovable property situated in the other Party may

be taxed in that other Party.

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 Party of which the alienator is a resident.

Article 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Party in respect of professional services or other activities

of an independent character shall be taxable only in that Party unless he has a fixed base regularly

available to him in the other Party for the purpose of performing his activities. If he has such a fixed

base, the income may be taxed in the other Party but only so much of it as is attributable to that fixed

base.

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.

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Article 15

INCOME FROM EMPLOYMENT

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

remuneration derived by a resident of a Party in respect of an employment shall be taxable only in

that Party unless the employment is exercised in the other Party. If the employment is so exercised,

such remuneration as is derived therefrom may be taxed in that other Party.

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

in respect of an employment exercised in the other Party shall be taxable only in the first-mentioned

Party if

(a)

the recipient is present in the other Party 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

(b)

the remuneration is paid by, or on behalf of, an employer who is not a resident of the

other Party, and

(c)

the remuneration is not borne by a permanent establishment or a fixed base which the

employer has in the other Party.

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 Party may be taxed in that Party.

Article 16

DIRECTORS' FEES

Directors' fees and other similar payments derived by a resident of a Party in his capacity as a

member of the board of directors of a company which is a resident of the other Party may be taxed in

that other Party.

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Article 17

ARTISTES AND SPORTSMEN

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

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 Party, may be taxed in that other

Party.

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 Party in which

the activities of the entertainer or sportsman are exercised.

3. The provisions of paragraphs 1 and 2 shall not apply to income derived from activities

exercised in a Party by an entertainer or a sportsman if the visit to that Party is wholly or mainly

supported by public funds of one or both of the Parties or local authorities thereof. In such case, the

income shall be taxable only in the Party of which the entertainer or a sportsman is a resident.

Article 18

PENSIONS AND SOCIAL SECURITY PAYMENTS

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

remuneration paid to a resident of a Party in consideration of past employment shall be taxable only

in that Party.

2. Notwithstanding the provisions of paragraph 1, payments made and pensions paid under the

social security legislation of a Party shall be taxable only in that Party.

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Article 19

GOVERNMENT SERVICE

1. (a)

Salaries, wages and other similar remuneration paid by a Party or a political

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

Party or subdivision or authority shall be taxable only in that Party.

(b)

However, such salaries, wages and other similar remuneration shall be taxable only

in the other Party if the services are rendered in that Party and the individual is a resident of

that Party who

(i)

is a national of that Party; or

(ii)

did not become a resident of that Party solely for the purpose of rendering

the services.

2. (a)

Notwithstanding the provisions of paragraph 1, pensions and other similar

remuneation paid by, or out of funds created by, a Party or a political subdivision or a local

authority thereof to an individual in respect of services rendered to that Party or subdivision

or authority shall be taxable only in that Party.

(b)

However, such pensions and similar remuneration shall be taxable only in the other

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

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

other similar remuneration in respect of services rendered in connection with a business carried on by

a Party or a political subdivision or a local authority thereof.

Article 20

STUDENTS AND BUSINESS APPRENTICES

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

Party a resident of the other Party and who is present in the first-mentioned Party solely for the

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purpose of his education or training receives for the purpose of his maintenance, education or training

shall not be taxed in that Party, provided that such payments arise from sources outside that Party.

Article 21

OTHER INCOME

1. Items of income of a resident of a Party, wherever arising, not dealt with in the foregoing

Articles of this Agreement shall be taxable only in that Party.

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

Party, carries on business in the other Party through a permanent establishment situated therein, or

performs in that other Party 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. In the case of Malta, double taxation shall be eliminated as follows

Subject to the provisions of the law of Malta regarding the allowance of a credit against

Malta tax in respect of foreign tax, where, in accordance with the provisions of this

Agreement , there is included in a Malta assessment income from sources within the Isle of

Man, the Manx tax on such income shall be allowed as a credit against the relative Malta tax

payable thereon.

2. In the case of the Isle of Man, double taxation shall be eliminated as follows

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a)

When imposing tax on its residents the Isle of Man may include in the basis upon

which such taxes are imposed the items of income, which, according to the provisions of this

Agreement, may be taxed in Malta.

b)

Where a resident of the Isle of Man derives income which, in accordance with the

provisions of this Agreement, may be taxed in Malta the Isle of Man shall allow as a

deduction from the tax on the income of that resident, an amount equal to the income tax paid

in Malta. Such deduction in either case shall not, however, 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 Malta.

c)

Notwithstanding the provisions of subparagraph b), where a company which is a

resident of the Isle of Man has held at least 25 percent of the capital of a company which is a

resident of Malta paying dividends for at least 12 months prior to the decision to distribute

the dividends, the Isle of Man shall exempt from tax the dividends paid to the company which

is a resident of the Isle of Man by the company which is a resident of Malta.

Article 23

NON-DISCRIMINATION

1. Nationals of a Party shall not be subjected in the other Party 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 Party 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 Parties.

2. The taxation on a permanent establishment which an enterprise of a Party has in the other

Party shall not be less favourably levied in that other Party than the taxation levied on enterprises of

that other Party carrying on the same activities. This provision shall not be construed as obliging a

Party to grant to residents of the other Party 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 4 of Article 11, or

paragraph 4 of Article 12 apply, interest, royalties and other disbursements paid by an enterprise of a

Party to a resident of the other Party shall, for the purpose of determining the taxable profits of such

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enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-

mentioned Party.

4. Enterprises of a Party, the capital of which is wholly or partly owned or controlled, directly

or indirectly, by one or more residents of the other Party, shall not be subjected in the first-mentioned

Party 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

Party are or may be subjected.

5. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to

taxes of every kind and description.

Article 24

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of the Parties result or will result for

him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the

remedies provided by the domestic law of those Parties, present his case to the competent authority of

the Party of which he is a resident or, if his case comes under paragraph 1 of Article 23, to that of the

Party of which he is a 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

Agreement.

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 Party, with a view to the avoidance of taxation which is not in

accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any

time limits in the domestic law of the Parties.

3. The competent authorities of the Parties shall endeavour to resolve by mutual agreement any

difficulties or doubts arising as to the interpretation or application of the Agreement . They may also

consult together for the elimination of double taxation in cases not provided for in the Agreement.

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4. The competent authorities of the Parties 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 Parties shall exchange such information as is foreseeably

relevant for carrying out the provisions of this Agreement or to the administration or enforcement of

the domestic laws concerning taxes covered by this Agreement insofar as the taxation thereunder is

not contrary to the Agreement. The exchange of information is not restricted by Article 1.

2. Any information received under paragraph 1 by a Party shall be treated as secret in the same

manner as information obtained under the domestic laws of that Party 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, the determination of appeals in relation to

the taxes referred to in paragraph 1, or the oversight of the above. 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.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Party

the obligation

(a)

to carry out administrative measures at variance with the laws and administrative

practice of that or of the other Party;

(b)

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

of the administration of that or of the other Party;

(c)

to supply information which would disclose any trade, business, industrial,

commercial or professional secret or trade process, or information, the disclosure of which

would be contrary to public policy (ordre public).

B

4. If information is requested by a Party in accordance with this Article, the other Party shall

use its information gathering measures to obtain the requested information, even though that other

Party may not need such information for its own tax purposes. The obligation contained in the

preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be

construed to permit a Party to decline to supply information solely because it has no domestic interest

in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a Party to decline to

supply information solely becasue the information is held by a bank, other financial institution,

nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership

interests in a person.

Article 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement 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 Parties shall notify each other that the legal requirements for the entry into force of this

Agreement have been complied with.

2. This Agreement shall enter into force thirty days after the date of the later of the notifications

referred to in paragraph 1 and its provisions shall have effect in respect of taxes on income derived

during any taxable period or accounting period, as the case may be, beginning on or after the first day

of January immediately following the date on which the Agreement enters into force.

B

Article 28

TERMINATION

This Agreement

shall remain in force until terminated by a Party.

Either Party may

terminate the Agreement by giving 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, the Agreement shall cease to have effect in respect of taxes on income derived

during any taxable period 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 of termination is given.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective

Governments, have signed this Agreement.

DONE at London this 23 rd day of October, 2009 in duplicate in the English language.

Joseph Zammit Tabona

Allan Robert Bell

For the Government of

For the Government of

Malta

the Isle of Man

B

PROTOCOL

At the moment of signing the Agreement between Malta and the Isle of Man for the avoidance of

double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned

have agreed upon the following provisions which shall form an integral part of the Agreement.

It is understood that the provisions of the Agreement shall not prevent the application of the

Agreement in the form of an exchange of letters signed by Malta on the 5 May, 2004 and by the Isle

of Man on the 19 November, 2004 providing for measures equivalent to those laid down in Council

Directive 2003/48/EC on taxation of savings income in the form of interest payments.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective

Governments, have signed this Protocol.

DONE at London this 23 rd day of October, 2009 in duplicate in the English language.

Joseph Zammit Tabona

Allan Robert Bell

For the Government of

For the Government of

Malta

the Isle of Man

B

€2.14