Double Taxation Relief (Taxes on Income) (Republic of Italy) (republicofitaly)

L.N. 14 of 2011

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income) (Republic of Italy)

(Amendment) Order, 2011

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:-

The title of this Order is the Double Taxation Relief (Taxes

on Income) (Republic of Italy) (Amendment) Order, 2011 and this

Order shall be read and construed as one with the Double Taxation

Relief (Taxes on Income) (Republic of Italy) Order, hereinafter

referred to as "the principal Order".

PROTOCOL

TO THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC

OF MALTA AND THE GOVERNMENT OF THE REPUBLIC OF ITALY FOR

THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON

INCOME AND THE PREVENTION OF FISCAL EVASION

The Government of Malta and the Government of the Italian Republic,

desiring to conclude a Protocol to amend the Agreement for the avoidance of

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

evasion, with Additional Protocol and Exchange of Notes, signed at Valletta on

16th July, 1981 (hereinafter referred to as "the Agreement"),

have agreed as follows

ARTICLE I

Paragraph (3) of Article 2 "Taxes Covered", shall be deleted and replaced by

the following

"(3)

The existing taxes to which this Agreement shall apply are

(a)

in the case of Italy

(i) the personal income tax;

(ii) the coporate income tax;

(iii) the regional tax on productive activities;

even if they are collected by withholding taxes at the source

(hereinafter referred to as "Italian tax");

(b)

in the case of Malta

the income tax,

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

ARTICLE II

With reference to Article 3 "General definitions", letter (i), subparagraph (i)

of paragraph (1) shall be replaced by the following

"(i)

in the case of Italy, the Ministry of Economy and Finance;".

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ARTICLE III

1. With reference to Article 22 "Elimination of double taxation",

paragraph (2) shall be deleted and replaced by the following

"(2) If a resident of Italy owns items of income which are taxable in

Malta, Italy, in determining its income taxes specified in Article 2 of this

Agreement, may include in the basis upon which such taxes are imposed the

said items of income, unless specific provisions of this Agreement otherwise

provide.

In such a case, Italy shall deduct from the taxes so calculated the income

tax paid in Malta but in an amount not exceeding that proportion of the

aforesaid Italian tax which such items of income bear to the entire income.

The tax paid in Malta for which deduction is granted is only the pro rata

amount corresponding to the foreign income which is included in the

aggregate income.

However, no deduction shall be granted if the item of income is

subjected in Italy to a substitute tax or to a final withholding tax, or to

substitute taxation at the same rate as the final withholding tax, also by

request of the recipient, in accordance with Italian law.".

2. Paragraph 4 of Article 22 shall be deleted.

ARTICLE IV

Article 25 "Exchange of information" shall be deleted and replaced by the

following

"(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 or administrative

subdivisions or local authorities, insofar as the taxation thereunder is not

contrary to the Agreement as well as to prevent fiscal evasion and tax

avoidance. The exchange of information is not restricted by Articles 1 and 2.

(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 the

information only for such purposes. They may disclose the information in

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public court proceedings or in judicial decisions.

(3) In no case shall the provisions of paragraph (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 of 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.

(5) 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 a fiduciary capacity or because it relates to

ownership interests in a person.".

ARTICLE V

Each Contracting State shall notify to the other the completion of the

procedures required by its domestic law for the entry into force of this Protocol.

This Protocol shall enter into force on the date of the receipt of the later of these

notifications and its provisions shall thereupon have effect in both States.

This Protocol shall remain into force as long as the Agreement remains into

force.

In Witness thereof the undersigned, being duly authorized thereto by their

respective Governments, have signed this Protocol.

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Done in duplicate in Rome this 13th day of March 2009 in the English and

Italian languages, all texts being equally authentic.

Tonio Borg

Vincenzo Scotti

For the Government

For the Government

of Malta

of the Italian Republic

€0.47

It is hereby declared

(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 Italy 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 Italy

(i)

the personal income tax;

(ii)

the corporate income tax;

(iii)

the regional tax on productive activities;

(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 24 November, 2010.