Double Taxation Relief (Taxes on Income)

L.N. 117 of 2013

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(The States of Guernsey) Order, 2013

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) (The States of Guernsey) Order, 2013.

Article 2

AGREEMENT BETWEEN

THE GOVERNMENT OF MALTA

AND

THE STATES OF GUERNSEY

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of Malta and the States of Guernsey, 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

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, 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

Arragements to

have effect.

(a)

that the arrangements specified in the Agreement set

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

States of Guernsey with a view to affording relief from double

taxation in relation to the following taxes imposed by the laws

of The States of Guernsey

-

income tax;

(c)

that the Convention has entered into force on the 10

March 2013.

The existing taxes to which the Agreement shall apply are in particular

(a)

in the case of Guernsey

income tax;

(hereinafter referred to as "Guernsey tax");

(b)

in the case of Malta

the income tax;

(hereinafter referred to as "Malta 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 that have been made in their taxation

laws which may affect matters covered by the Agreement.

Article 3

GENERAL DEFINITIONS

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

requires

(a)

the term "Guernsey" means the States of Guernsey and, when

used in a geographical sense, means Guernsey, Alderney and Herm,

including the territorial sea adjacent to those islands, in accordance with

international law;

(b) 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;

(c)

the term "collective investment scheme" means any pooled

investment vehicle, irrespective of legal form;

(d) the term "company" means any body corporate or any entity that

is treated as a body corporate for tax purposes;

(e)

the term "competent authority" means

(i)

in the case of Guernsey, the Director of Income Tax or his

delegate;

(ii) in the case of Malta, the Minister responsible for finance or

his authorised representative;

(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 "national", in relation to a Party, means

(i) in the case of Guernsey, any individual who is a resident of

Guernsey and possesses British citizenship, any legal person created or

organised under the laws of Guernsey and any organisation without

legal personality treated for the purposes of Guernsey tax as a legal

person created or organised under the laws of Guernsey;

(ii) in the case of Malta

(a) any individual possessing the nationality of Malta;

(b) any legal person, partnership or association deriving

its status as such from the laws in force in Malta;

(i)

the terms "a Party" and "the other Party" mean Guernsey or

Malta, as the context requires;

(j)

the term "person" includes an individual, a collective investment

scheme, a company and any other body of persons.

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 laws 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, any pension fund or pension scheme recognised by that Party

and a person other than an individual which is incorporated or constituted under

the laws of a 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);

(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 twelve months.

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

"permanent establishment" shall be deemed not to include

(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.

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.

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 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 the 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

(a)

derived from the rental of ships or aircraft if such ships or aircraft

are 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 and 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 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 shall be taxable only in that other Party.

2. Paragraph 1 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 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.

4. 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 and the holding in respect of which the

dividends are paid is effectively connected with such permanent establishment. In

such case the provisions of Article 7 shall apply.

5. 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

situated in that other Party, 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 Party.

Article 11

INTEREST

1. Interest arising in a Party and paid to 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 and

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

such permanent establishment. In such case the provisions of Article 7 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.

5. Interest shall be deemed to arise in a Party when the payer is a resident

of that Party. Where, however, the person paying the interest, whether he is a

resident of a Party or not, has in a Party a permanent establishment in connection

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

interest is borne by such permanent establishment, then such interest shall be

deemed to arise in the Party in which the permanent establishment is situated.

Article 12

ROYALTIES

1. Royalties arising in a Party and paid to 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 and

the right or property in respect of which the royalties are paid is effectively

connected with such permanent establishment. In such case the provisions of

Article 7 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.

5. Royalties shall be deemed to arise in a Party when the payer is a

resident of that Party. Where, however, the person paying the royalties, whether he

is a resident of a Party or not, has in a Party a permanent establishment in

connection with which the liabilities to pay the royalties was incurred, and such

royalties are borne by such permanent establishment, then such royalties shall be

deemed to arise in the Party in which the permanent establishment is situated.

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.

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 including such gains from the alienation of such a permanent

establishment (alone or with the whole enterprise) 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 per cent 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

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15, 17 and 18, 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

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 15

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.

Article 16

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 7 and 14, 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 and 14, be taxed in the Party in which the activities of the

entertainer or sportsman are exercised.

Article 17

PENSIONS

Pensions and other similar remuneration (including lump sum payments)

arising in a Party and paid to a resident of the other Party in consideration of past

employment or self-employment and social security pensions shall be taxable only

in the first-mentioned Party.

Article 18

GOVERNMENT SERVICE

1. (a)

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

a political subdivision or a statutory body or a local authority thereof to an

individual in respect of services rendered to that Party or subdivision, body 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. The provisions of Articles 14, 15, 16 and 17 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

statutory body or a local authority thereof.

Article 19

STUDENTS

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 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 20

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, and the right or

property in respect of which the income is paid is effectively connected with such

permanent establishment. In such case, the provisions of Article 7 shall apply.

Article 21

ELIMINATION OF DOUBLE TAXATION

1. In the case of Guernsey, double taxation shall be avoided as follows

Subject to the provisions of the laws of Guernsey regarding the allowance as

a credit against Guernsey tax of tax payable in a territory outside Guernsey (which

shall not affect the general principle hereof)

(a)

subject to the provisions of sub-paragraph (iii), where a resident

of Guernsey derives income which, in accordance with the provisions of the

Agreement, may be taxed in Malta, Guernsey shall allow as a deduction from

the tax payable in respect of that income, an amount equal to the income tax

paid in Malta;

(b) such deduction shall not, however, exceed that part of the income

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

income which may be taxed in Malta;

(c)

where a resident of Guernsey derives income which, in

accordance with the provisions of the Agreement shall be taxable only in

Malta, Guernsey may include this income in calculating the amount of tax on

the remaining income of such resident.

2. 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 Guernsey, the Guernsey tax on such income shall be allowed as a

credit against the relative Malta tax payable thereon.

Article 22

NON-DISCRIMINATION

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 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 23

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 22, 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.

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 24

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 of every kind and description imposed on behalf of the Parties,

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

of information is not restricted by Articles 1 and 2.

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).

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 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 25

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 26

ENTRY INTO FORCE

1. The Parties shall notify each other in writing that the legal requirements

for the entry into force of this Agreement have been complied with.

2. The 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.

Article 27

TERMINATION

This Agreement shall remain in force until terminated by a Party. Either Party

may terminate the Agreement 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, 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

have signed this Agreement.

DONE at London this twelfth day of March, 2012 in duplicate in the English

language.

Joseph Zammit Tabona

Lyndon Trott

For the Government of Malta

For the States of Guernsey

€1.62