Double Taxation Relief (Taxes on Income)

L.N. 329 of 2010

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(Republic of France) (Amendment) 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 Citation.

on Income) (Republic of France) (Amendment) Order, 2010 and it

shall be read and construed as one with the Double Taxation Relief S.L. 123.14

(Taxes on Income) (Republic of France) Order, hereinafter referred to

as "the principal order".

PROTOCOL

AMENDING THE AGREEMENT BETWEEN

THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF THE FRENCH REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME AND ON CAPITAL SIGNED

IN VALLETTA ON 25TH JULY 1977 AND AMENDED BY THE

PROTOCOL

SIGNED IN VALLETTA ON 8TH JULY 1994

AND EXCHANGE OF LETTERS OF 8TH JULY 1994

The Government of Malta

and

The Government of the French Republic,

desiring to amend the Agreement between the Government of the Republic of

Malta and the Government of the French Republic for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and

on Capital, signed on 25th July 1977 and amended on 8th July 1994 (hereinafter

referred to as "the Agreement"),

have agreed as follows

Article 1

Article 2 of the Agreement is amended as follows

1. A subparagraph 3 a) iv) worded "the tax on salaries ("la taxe sur les

salaires");" is added.

2. A subparagraph 3 a) v) worded as follows is added

"(v) widespread social security contributions (contributions sociales

généralisées) and contributions for the reimbursement of the social debt

(contributions pour le remboursement de la dette sociale) ;".

It is hereby declared:-

Amendments to

have effect.

(a)

that the amendments to the principal order, as

specified in the Schedule to this order, have been made with the

Government of the Republic of France with a view to affording

relief from double taxation and preventing fiscal evasion in

relation to the following taxes imposed by the laws of the

Republic of France

(i)

the income tax;

(ii) the corporation tax; including any

withholding tax, prepayment (precompte) or advanced

payment with respect to the aforesaid taxes;

(iii) the solidarity tax on wealth;

(iv) the tax on salaries (“la taxe sur les salaires”);

(v) widespread social security contributions

(contributions sociales généralisées) and contributions for

the reimbursement of the social debt (contributions pour le

remboursement de la dette sociale);

(b)

that it is expedient that those amendments should

have effect;

(c)

that the Protocol specified in the Schedule to this

order has entered into force on the 1 st June, 2010.

B

In subparagraph 3 b), the words “and surtax including prepayments of

tax whether made by deduction at source or otherwise” are deleted.

B

Article 2

Article 10 of the Agreement is amended as follows

1. The subparagraph 2 a) is deleted and replaced by the following

subparagraph

"2.a) Where the dividends are paid by a company resident of France to a

resident of Malta who is the beneficial owner thereof, the French tax so charged

shall not exceed 15 per cent of the gross amount of the dividends. However,

dividends paid by a company which is a resident of France and beneficially owned

by a company which is a resident of Malta which holds directly at least 10 per cent

of the capital of the company paying the dividends shall be taxable only in Malta.".

2. In paragraph 3, the words "income from other corporate rights which is

subjected to the same taxation treatment as income from shares by the taxation law

of the State of which the company making the distribution is a resident" are deleted

and replaced by the following words "income treated as a distribution by the

taxation laws of the Contracting State of which the company making the

distribution is a resident".

3. In subparagraph 5 a), the words "sub-paragraph (a)(ii)" shall be

replaced by the words "sub-paragraph (a)".

A new paragraph worded as follows is added

"8. The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or the

assignment of the shares or other rights in respect of which the dividend is paid to

take advantage of this Article by means of that creation or assignment.".

Article 3

Article 11 of the Agreement is amended as follows

1. In paragraph 2, "10 per cent" is replaced by "5 per cent".

2. A new paragraph worded as follows is added

"8. The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or the

assignment of the debt-claim in respect of which the interest is paid to take

advantage of this Article by means of that creation or assignment.".

B

Article 4

In Article 12 of the Agreement, a new paragraph worded as follows is added

"8. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation or the

assignment of the rights in respect of which the royalty is paid to take advantage of

this Article by means of that creation or assignment.".

Article 5

Article 22 of the Agreement is amended as follows

1. Paragraph 1 is deleted and replaced by the following paragraph

"1. Items of income beneficially owned by a resident of a Contracting State,

wherever arising, not dealt with in the foregoing Articles of this Agreement shall

be taxable only in that State if such resident is subject to tax in respect of those

items of income in that State. If that requirement is not met, those items of income

shall remain taxable in the other Contracting State and according to the laws of that

other State.".

2. A new paragraph worded as follows is added

"3. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation or the

assignment of the rights in respect of which the income is paid to take advantage of

this Article by means of that creation or assignment.".

Article 6

In subparagraph 1 d) ii) bb) of Article 24 of the Agreement, "10%" is

replaced by "5%".

Article 7

The provisions of Article 27 of the Agreement are deleted and replaced by

the following provisions

"1. The competent authorities of the Contracting States shall exchange such

information as is forseeably relevant for carrying out the provisions of this

Agreement or to the administration or enforcement of the domestic laws

concerning taxes of every kind and description imposed on behalf of the

Contracting States, or of their political subdivisions or territorial authorities,

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

of information is not restricted by Article 1.

B

2. Any information received under paragraph 1 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, 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 information only for such purposes.

They may disclose the information in public court proceeding or in judicial

decisions.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as

to impose on a Contracting State the obligation

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

administrative practice of that or the other Contracting State;

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 Contracting State;

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).

4. If information is requested by a Contracting State in accordance with

this Article, the other Contracting State shall use its information gathering

measures to obtain the requested information, even though that other State 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 Contracting State to decline to supply

information solely because it has no domestic interest in such information.

In no case shall the provisions of paragraph 3 be construed to permit a

Contracting State to decline to supply information solely because the information

is held by a bank, other financial institution, nominee or person acting in an agency

or fiduciary capacity or because it relates to ownership interests in a person.".

Article 8

The Protocol of the Agreement is amended as follows

1. Paragraph V is deleted and paragraphs VI and VII shall be renumbered

as paragraphs V and VI respectively.

2. A new paragraph worded as follows is added

"VII.Where, under any provision of the Agreement, income or gains is or are

wholly or partly relieved from tax in a State and, under the laws in force in the

B B 3828

other State, an individual, in respect of the said income or gains, is subject to tax

by reference to the amount thereof which is remitted to or received in that other

State, and not by reference to the full amount thereof, then the relief to be allowed

under this Agreement in the first-mentioned State shall apply only to so much of

the income or gains as is remitted to or received in that other State.".

Article 9

1. Each of the Contracting States shall notify to the other the completion of

the procedures required as far as it is concerned for the bringing into force of this

Protocol. This Protocol shall enter into force on the first day of the second month

following the day when the latter of these notifications has been received.

2. The provisions of the Protocol shall apply for the first time

a) in respect of taxes withheld at source, to amounts taxable on or after

the date of entry into force of the Protocol;

b) in respect of taxes on income which are not withheld at source, to

income relating to the calendar year or accounting period, as the case may be,

during which the Protocol enters into force;

c) in respect of the other taxes, to taxation the taxable event of which

will occur on or after the date of entry into force of the Protocol.

3. The provisions of the Protocol shall remain in force as long as the

Agreement shall remain in force.

In witness whereof, the undersigned, duly authorised thereto, have signed

this Protocol.

Done at Valletta, this 29th day of August, 2008, in duplicate, in the English

and French languages, both texts being equally authentic.

Tonio Fenech

Eric Woerth

For the Government of

For the Government of French

Malta

Republic

€0.56