Andorra) Order, 2018

L.N.118 of 2018

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income) (The Principality of

Andorra) Order, 2018

IN EXERCISE of the powers conferred by article 76 of the

Income Tax Act, the Minister for Finance has made the following

order:-

The title of this order is the Double Taxation Relief (Taxes Citation.

on Income) (The Principality of Andorra) Order, 2018.

ARTICLE 2

CONVENTION BETWEEN THE GOVERNMENT OF THE

REPUBLIC OF MALTA AND THE GOVERNMENT OF THE

PRINCIPALITY OF ANDORRA

The Government of the Republic of Malta and the Government

of the Principality of Andorra, desiring to further develop their

economic relations and to enhance their cooperation in tax matters by

way of concluding a Convention for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income

without creating opportunities for non-taxation or reduced taxation

through tax evasion or avoidance have agreed as follows

ARTICLE 1

Persons Covered

This Convention shall apply to persons who are residents of one

or both of the Contracting States.

ARTICLE 2

Taxes Covered

1. This Convention shall apply to taxes on income imposed on

behalf of a Contracting State or 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:-

Arrangements to

have effect.

(a) that the arrangements specified in the Convention set

out in the Schedule to this Order (hereinafter referred to as "the

Convention") have been made with the Government of the

Principality of Andorra with a view to affording relief from

double taxation in relation to the following taxes imposed by the

laws of the Principality of Andorra

(i) corporate

income

tax

(Impost

sobre

les

societats);

(ii) personal income tax (Impost sobre la renda de

les persones físiques);

(iii) tax on income for fiscal non-residents (Impost

sobre la renda dels no residents fiscals); and

(iv) tax payable on the increase in value in

immovable property transfers (Impost sobre les plusvàlues

en les transmissions patrimonials immobiliàries);

(b) that it is expedient that those arrangements should

have effect following the entry into force of the Convention and

in accordance with the relevant provisions of the Convention;

(c) that the Convention has entered into force on 27th

September 2017.

The existing taxes to which this Convention shall apply are

in particular

(a)

in Malta

the income tax;

(hereinafter referred to as "Malta tax");

(b)

in Andorra

(i) corporate

income

tax

(Impost

sobre

les

societats);

(ii) personal income tax (Impost sobre la renda de les

persones físiques);

(iii) tax on income for fiscal non-residents (Impost

sobre la renda dels no residents fiscals); and

(iv) tax payable on the increase in value in

immovable property transfers (Impost sobre les plusvàlues

en les transmissions patrimonials immobiliàries);

(hereinafter referred to as "Andorran tax").

The Convention shall apply also to any identical or

substantially similar taxes that are imposed after the date of signature

of the Convention in addition to, or in place of, the existing taxes. The

competent authorities of the Contracting States shall notify each other

of any significant changes that have been made in their taxation laws.

ARTICLE 3

General Definitions

1. For the purposes of this Convention, 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 "Andorra" means the Principality of Andorra

and, when used in a geographical sense means the territory of the

Principality of Andorra;

(c) the terms "a Contracting State" and "the other

Contracting State" mean Malta or Andorra, 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 Contracting State" and

"enterprise of the other Contracting State" mean respectively an

enterprise carried on by a resident of a Contracting State and an

enterprise carried on by a resident of the other Contracting State;

(g) the term "international traffic" means any transport

by a ship or aircraft operated by an enterprise that has its place of

effective management in a Contracting State, except when the

ship or aircraft is operated solely between places in the other

Contracting State;

(h) the term "business" includes the performance of

professional services and of other activities of an independent

character;

(i)

the term "competent authority" means

(i) in Malta: the Minister responsible for finance or

his authorised representative;

(ii) in Andorra: the Minister of Finance or his

authorised representative;

(j)

the term "national", in relation to a Contracting State,

means

(i) any individual possessing the nationality of that

Contracting State;

(ii) any legal person, partnership or association

deriving its status as such from the laws in force in that

Contracting State.

2. As regards the application of the Convention at any time by

a Contracting State, any term not defined therein shall, unless the

context otherwise requires, have the meaning that it has at that time

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

Convention applies, any meaning under the applicable tax laws of that

State prevailing over a meaning given to the term under other laws of

that State.

ARTICLE 4

Resident

1. For the purposes of this Convention, the term "resident of a

Contracting State" means any person who, under the laws of that State,

is liable to tax therein by reason of his domicile, residence, place of

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

includes that State and any political subdivision or local authority

thereof. This term, however, does not include any person who is liable

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

2. Where by reason of the provisions of paragraph 1 an

individual is a resident of both Contracting States, then his status shall

be determined as follows

(a) he shall be deemed to be a resident only of the State

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

permanent home available to him in both States, he shall be

deemed to be a resident only of the State with which his personal

and economic relations are closer (centre of vital interests);

(b) if the State in which he has his centre of vital interests

cannot be determined, or if he has not a permanent home

available to him in either State, he shall be deemed to be a

resident only of the State in which he has an habitual abode;

(c) if he has an habitual abode in both States or in neither

of them, he shall be deemed to be a resident only of the State of

which he is a national;

(d) if he is a national of both States or of neither of them,

the competent authorities of the Contracting States shall settle

the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person

other than an individual is a resident of both Contracting States, then it

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

effective management is situated.

ARTICLE 5

Permanent Establishment

1. For the purposes of this Convention, the term "permanent

establishment" means a fixed place of business through which the

business of an enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop;

(f) a mine, an oil or gas well, a quarry or any other place

of extraction of natural resources; and

(g)

an agricultural, pastoral or forestry exploitation.

3. A building site or construction or installation project

constitutes a permanent establishment only if it lasts more than twelve

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 Contracting State an authority to conclude

contracts in the name of the enterprise, that enterprise shall be deemed

to have a permanent establishment in that State in respect of any

activities which that person undertakes for the enterprise, unless the

activities of such person are limited to those mentioned in paragraph 4

which, if exercised through a fixed place of business, would not make

this fixed place of business a permanent establishment under the

provisions of that paragraph.

An enterprise shall not be deemed to have a permanent

establishment in a Contracting State merely because it carries on

business in that State through a broker, general commission agent or

any other agent of an independent status, provided that such persons

are acting in the ordinary course of their business.

The fact that a company which is a resident of a

Contracting State controls or is controlled by a company which is a

resident of the other Contracting State, or which carries on business in

that other State (whether through a permanent establishment or

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

establishment of the other.

ARTICLE 6

Income From Immovable Property

1. Income derived by a resident of a Contracting State from

immovable property (including income from agriculture or forestry)

situated in the other Contracting State may be taxed in that other State.

2. The term "immovable property" shall have the meaning

which it has under the law of the Contracting State in which the

property in question is situated. The term shall in any case include

property accessory to immovable property, livestock and equipment

used in agriculture and forestry, rights to which the provisions of

general law respecting landed property apply, usufruct of immovable

property and rights to variable or fixed payments as consideration for

the working of, or the right to work, mineral deposits, sources and

other natural resources; ships 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 Contracting State shall be

taxable only in that State unless the enterprise carries on business in

the other Contracting State through a permanent establishment situated

therein. If the enterprise carries on business as aforesaid, the profits of

the enterprise may be taxed in the other State but only so much of them

as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an

enterprise of a Contracting State carries on business in the other

Contracting State through a permanent establishment situated therein,

there shall in each Contracting State be attributed to that permanent

establishment the profits which it might be expected to make if it were

a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly

independently with the enterprise of which it is a permanent

establishment.

3. In determining the profits of a permanent establishment,

there shall be allowed as deductions expenses which are incurred for

the purposes of the permanent establishment, including executive and

general administrative expenses so incurred, whether in the State in

which the permanent establishment is situated or elsewhere.

4. 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.

5. 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.

6. Where profits include items of income which are dealt with

separately in other Articles of this Convention, then the provisions of

those Articles shall not be affected by the provisions of this Article.

ARTICLE 8

Shipping And Air Transport

1. Profits from the operation of ships or aircraft in

international traffic shall be taxable only in the Contracting State in

which the place of effective management of the enterprise is situated.

2. If the place of effective management of a shipping

enterprise is aboard a ship, then it shall be deemed to be situated in the

Contracting State in which the home harbour of the ship is situated, or,

if there is no such home harbour, in the Contracting State of which the

operator of the ship is a resident.

3. For the purposes of this Article, profits derived from the

operation of ships or aircraft in international traffic include profits

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

operated in international traffic or if such rental profits are incidental

to other profits described in paragraph 1 of this Article.

4. 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 Contracting State participates

directly or indirectly in the management, control or capital of an

enterprise of the other Contracting State, or

(b) the same persons participate directly or indirectly in

the management, control or capital of an enterprise of a

Contracting State and an enterprise of the other Contracting

State,

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

enterprises in their commercial or financial relations which differ

from those which would be made between independent enterprises,

then any profits which would, but for those conditions, have

accrued to one of the enterprises, but, by reason of those conditions,

have not so accrued, may be included in the profits of that

enterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of an

enterprise of that State - and taxes accordingly - profits on which an

enterprise of the other Contracting State has been charged to tax in that

other State and the profits so included are profits which would have

accrued to the enterprise of the first-mentioned State if the conditions

made between the two enterprises had been those which would have

been made between independent enterprises, then that other State shall

make an appropriate adjustment to the amount of the tax charged

therein on those profits. In determining such adjustment, due regard

shall be had to the other provisions of this Convention and the

competent authorities of the Contracting States shall if necessary

consult each other.

ARTICLE 10

Dividends

1. Dividends paid by a company which is a resident of a

Contracting State to a resident of the other Contracting State shall be

taxable only in that other State, provided that the beneficial owner of

the dividends is a resident of the other State.

This paragraph shall not affect the taxation of the company in

respect of the profits out of which the dividends are paid.

2. The term "dividends" as used in this Article means income

from shares, "jouissance" shares or "jouissance" rights, 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 State of which the company making the distribution is a

resident.

3. The provisions of paragraphs 1 and 2 shall not apply if the

beneficial owner of the dividends, being a resident of a Contracting

State, carries on business in the other Contracting State of which the

company paying the dividends is a resident, through a permanent

establishment situated therein 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.

4. Where a company which is a resident of a Contracting State

derives profits or income from the other Contracting State, that other

State may not impose any tax on the dividends paid by the company,

except insofar as such dividends are paid to a resident of that other

State or insofar as the holding in respect of which the dividends are

paid is effectively connected with a permanent establishment situated

in that other State, nor subject the company's undistributed profits to a

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

or the undistributed profits consist wholly or partly of profits or

income arising in such other State.

ARTICLE 11

Interest

1. Interest arising in a Contracting State and paid to a resident

of the other Contracting State shall be taxable only in that other State,

provided that the beneficial owner of the interest is a resident of that

other State.

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 Contracting

State, carries on business in the other Contracting State 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. Interest shall be deemed to arise in a Contracting State

when the payer is a resident of that State. Where, however, the person

paying the interest, whether he is a resident of a Contracting State or

not, has in a Contracting State a permanent establishment 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 State

in which the permanent establishment is situated.

5. Where, by reason of a special relationship between the

payer and the beneficial owner or between both of them and some

other person, the amount of the interest, having regard to the debt-

claim for which it is paid, exceeds the amount which would have been

agreed upon by the payer and the beneficial owner in the absence of

such relationship, the provisions of this Article shall apply only to the

last-mentioned amount. In such case, the excess part of the payments

shall remain taxable according to the laws of each Contracting State,

due regard being had to the other provisions of this Convention.

ARTICLE 12

Royalties

1. Royalties arising in a Contracting State and beneficially

owned by a resident of the other Contracting State shall be taxable

only in that other State.

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 Contracting

State, carries on business in the other Contracting State 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. Royalties shall be deemed to arise in a Contracting State

when the payer is a resident of that State. Where, however, the person

paying the royalties, whether he is a resident of a Contracting State or

not, has in a Contracting State a permanent establishment in

connection with which the liability 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 State in which the

permanent establishment is situated.

5. Where, by reason of a special relationship between the

payer and the beneficial owner or between both of them and some

other person, the amount of the royalties, having regard to the use,

right or information for which they are paid, exceeds the amount

which would have been agreed upon by the payer and the beneficial

owner in the absence of such relationship, the provisions of this Article

shall apply only to the last-mentioned amount. In such case, the excess

part of the payments shall remain taxable according to the laws of each

Contracting State, due regard being had to the other provisions of this

Convention.

ARTICLE 13

Capital Gains

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

alienation of immovable property referred to in Article 6 and situated

in the other Contracting State may be taxed in that other State.

2. Gains from the alienation of movable property forming part

of the business property of a permanent establishment which an

enterprise of a Contracting State has in the other Contracting State

including such gains from the alienation of such a permanent

establishment (alone or with the whole enterprise) may be taxed in that

other State.

3. Gains derived by an enterprise of a Contracting State from

the alienation of ships or aircraft operated in international traffic, or

from movable property pertaining to the operation of such ships or

aircraft, shall be taxable only in the Contracting State in which the

place of effective management of the enterprise is situated.

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

alienation of shares deriving more than 50 per cent of their value

directly or indirectly from immovable property situated in the other

Contracting State may be taxed in that other State.

5. Gains from the alienation of any property, other than that

referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the

Contracting State of which the alienator is a resident.

ARTICLE 14

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

Contracting State in respect of an employment shall be taxable only in

that State unless the employment is exercised in the other Contracting

State. If the employment is so exercised, such remuneration as is

derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1,

remuneration derived by a resident of a Contracting State in respect of

an employment exercised in the other Contracting State shall be

taxable only in the first-mentioned State if

(a) the recipient is present in the other State for a period

or periods not exceeding in the aggregate 183 days in any

twelve-month period commencing or ending in the fiscal year

concerned, and

(b) the remuneration is paid by, or on behalf of, an

employer who is not a resident of the other State, and

(c) the remuneration is not borne by a permanent

establishment which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article,

remuneration derived in respect of an employment exercised aboard a

ship or aircraft operated in international traffic by an enterprise of a

Contracting State may be taxed in the Contracting State in which the

place of effective management of the enterprise is situated.

ARTICLE 15

Directors' Fees

Directors' fees and other similar payments derived by a resident

of a Contracting State in his capacity as a member of the board of

directors of a company which is a resident of the other Contracting

State may be taxed in that other State.

ARTICLE 16

Artistes And Sportspersons

1. Notwithstanding the provisions of Articles 7 and 14,

income derived by a resident of a Contracting State as an entertainer,

such as a theatre, motion picture, radio or television artiste, or a

musician, or as a sportsperson, from his personal activities as such

exercised in the other Contracting State, may be taxed in that other

State.

2. Where income in respect of personal activities exercised by

an entertainer or a sportsperson in his capacity as such accrues not to

the entertainer or sportsperson himself but to another person, that

income may, notwithstanding the provisions of Articles 7 and 14, be

taxed in the Contracting State in which the activities of the entertainer

or sportsperson are exercised.

3. The provisions of paragraphs 1 and 2 shall not apply to

income derived from activities exercised in a Contracting State by

artistes and sportspersons if the visit to that State is wholly or mainly

supported by public funds of the other Contracting State or political

subdivisions or local authorities thereof. In such a case, the income is

taxable in the Contracting State in which the artistes or sportspersons

are resident.

ARTICLE 17

Pensions

1. Subject to the provisions of paragraph 2 of Article 18,

pensions and other similar remuneration paid to a resident of a

Contracting State in consideration of past employment shall be taxable

only in that State.

2. Notwithstanding the provisions of paragraph 1, pensions

and other payments made under the social security legislation of a

Contracting State shall be taxable only in that State.

ARTICLE 18

Government Service

1. (a) Salaries, wages and other similar remuneration paid

by a Contracting State or a political subdivision or a local authority

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

subdivision or authority shall be taxable only in that State.

(b) However, such salaries, wages and other similar

remuneration shall be taxable only in the other Contracting State

if the services are rendered in that State and the individual is a

resident of that State who

(i)

is a national of that State; or

(ii) did not become a resident of that State solely

for the purpose of rendering the services.

2. (a) Notwithstanding the provisions of paragraph 1,

pensions and other similar remuneration paid by, or out of funds

created by, a Contracting State or a political subdivision or a local

authority thereof to an individual in respect of services rendered to that

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

(b) However, such pensions and similar remuneration

shall be taxable only in the other Contracting State if the

individual is a resident of, and a national of, that State.

3. The provisions of Articles 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

Contracting State or a political subdivision or a local authority thereof.

ARTICLE 19

Students

Payments which a student or business apprentice who is or was

immediately before visiting a Contracting State a resident of the

other Contracting State and who is present in the first-mentioned

State solely for the purpose of his education or training receives for

the purpose of his maintenance, education or training shall not be

taxed in that State, provided that such payments arise from sources

outside that State.

ARTICLE 20

Other Income

1. Items of income of a resident of a Contracting State,

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

Convention shall be taxable only in that State.

2. The provisions of paragraph 1 shall not apply to income,

other than income from immovable property as defined in paragraph 2

of Article 6, if the recipient of such income, being a resident of a

Contracting State, carries on business in the other Contracting State

through a permanent establishment situated therein 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 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 Convention, there

is included in a Malta assessment income from sources within

Andorra, the Andorran tax on such income shall be allowed as a

credit against the relative Malta tax payable thereon.

2. In the case of Andorra, double taxation shall be eliminated

as follows

(a) Where a resident of Andorra derives income which, in

accordance with the provisions of this Convention, may be taxed

in Malta, Andorra shall allow as a deduction from the tax on the

income of that resident an amount equal to the tax paid in Malta.

Such deduction shall not, however, exceed that part of the

Andorran tax, as computed before the deduction is given, which

is attributable to such items of income derived from Malta;

(b) Where a resident of Andorra derives income which, in

accordance with the provisions of this Convention, is exempt

from tax in Andorra, Andorra may in order to calculate the

amount of tax on the remaining income of such resident, take

into account the income that has been exempted.

ARTICLE 22

Non-discrimination

1. Nationals of a Contracting State shall not be subjected in

the other Contracting State to any taxation or any requirement

connected therewith, which is other or more burdensome than the

taxation and connected requirements to which nationals of that other

State in the same circumstances, in particular with respect to residence,

are or may be subjected. This provision shall, notwithstanding the

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

one or both of the Contracting States.

2. The taxation on a permanent establishment which an

enterprise of a Contracting State has in the other Contracting State

shall not be less favourably levied in that other State than the taxation

levied on enterprises of that other State carrying on the same activities.

This provision shall not be construed as obliging a Contracting State to

grant to residents of the other Contracting State any personal

allowances, reliefs and reductions for taxation purposes on account of

civil status or family responsibilities which it grants to its own

residents.

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

paragraph 5 of Article 11, or paragraph 5 of Article 12 apply, interest,

royalties and other disbursements paid by an enterprise of a

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

the purpose of determining the taxable profits of such enterprise, be

deductible under the same conditions as if they had been paid to a

resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is

wholly or partly owned or controlled, directly or indirectly, by one or

more residents of the other Contracting State, shall not be subjected in

the first-mentioned State to any taxation or any requirement connected

therewith which is other or more burdensome than the taxation and

connected requirements to which other similar enterprises of the first-

mentioned State are or may be subjected.

5. The provisions of this Article shall, 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 Contracting States result or will result for him in taxation not in

accordance with the provisions of this Convention, he may,

irrespective of the remedies provided by the domestic law of those

States, present his case to the competent authority of the Contracting

State of which he is a resident or, if his case comes under paragraph 1

of Article 22, to that of the Contracting State 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 Convention.

2. The competent authority shall endeavour, if the objection

appears to it to be justified and if it is not itself able to arrive at a

satisfactory solution, to resolve the case by mutual agreement with the

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

avoidance of taxation which is not in accordance with the Convention.

Any agreement reached shall be implemented notwithstanding any

time limits in the domestic law of the Contracting States.

3. The competent authorities of the Contracting States shall

endeavour to resolve by mutual agreement any difficulties or doubts

arising as to the interpretation or application of the Convention. They

may also consult together for the elimination of double taxation in

cases not provided for in the Convention.

4. The competent authorities of the Contracting States may

communicate with each other directly, including through a joint

commission consisting of themselves or their representatives, for the

purpose of reaching an agreement in the sense of the preceding

paragraphs.

ARTICLE 24

Exchange Of Information

1. The competent authorities of the Contracting States shall

exchange such information as is foreseeably relevant for carrying out

the provisions of this Convention 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 local authorities, insofar as the taxation

thereunder is not contrary to the Convention. 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 public court proceedings or in judicial decisions.

Notwithstanding the foregoing, information received by a Contracting

State may be used for other purposes when such information may be

used for such other purposes under the laws of both States and the

competent authority of the supplying State authorises such use.

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 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 25

Members Of Diplomatic Missions And Consular Posts

Nothing in this Convention shall affect the fiscal privileges of

members of diplomatic missions, consular posts or permanent

delegations to international organizations, under the general rules of

international law or under the provisions of special agreements.

ARTICLE 26

Entitlement To Benefits

1. Notwithstanding the other provisions of this Convention, a

resident of a Contracting State shall not receive the benefit of any

reduction in or exemption from tax provided for in this Convention by

the other Contracting State if it is reasonable to conclude, having

regard to all relevant facts and circumstances, that the principal

purpose was to obtain these benefits, unless it is established that

granting these benefits in these circumstances would be in accordance

with the object and purpose of the relevant provisions of this

Convention. Before a resident of a Contracting State is denied such

benefits in the other Contracting State by reason of the preceding

sentence, the competent authorities of the Contracting States shall

agree with each other following consultation.

2. Where, under any provision of this Convention, an item of

income may be relieved from tax in a Contracting State and, under the

domestic law in force in the other Contracting State, a person is only

subject to tax by reference to the amount of such income 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 in the first-mentioned

State shall apply only to so much of the income which is subject to tax

in the other State.

ARTICLE 27

Entry Into Force

1. The Contracting States shall notify each other, through

diplomatic channels, that the legal requirements for the entry into force

of this Convention have been complied with.

2. This Convention 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

(a) in respect of taxes withheld at source, to income derived

on or after first day of January of the calendar year next

following the year in which the Convention enters into force;

(b) in respect of other taxes on income, to taxes chargeable

for any taxable year (any calendar year or accounting period, as

the case may be), beginning on or after the first day of January

immediately following the date on which the Convention enters

into force.

ARTICLE 28

Termination

This Convention shall remain in force until terminated by a

Contracting State. Either Contracting State may terminate the

Convention, through diplomatic channels, by giving 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 Convention shall cease to

have effect

(a)

in respect of taxes withheld at source, to income

derived on or after first day of January of the calendar year next

following the year in which the notice is given;

(b) in respect of other taxes on income, to taxes

chargeable for any taxable year (any calendar year or accounting

period, as the case may be), beginning on or after the first day of

January immediately following the year in which the notice is

given.

IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have signed this

Convention.

DONE at New York this 20th day of September, 2016, in two

originals in the English and Catalan languages, both texts being

equally authentic.

For the Government of

For the Government of

the Republic of Malta

the Principality of Andorra

PROTOCOL

At the signing today of the Convention between the Government of

the Republic of Malta and the Government of the Principality of

Andorra 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 this Convention

With reference to paragraph 1 of Article 4 (Resident)

1. An investment fund and a pension fund or scheme of

a Contracting State is considered to be a resident of that State.

For this purpose

(i)

the term "investment fund" means,

(a) in the case of Malta, a collective investment

scheme as defined in the Investment Services Act

(Chapter 370 of the Laws of Malta) and any other law

or regulation that may develop, replace or modify this

law in the future;

(b) in the case of Andorra, an investment

fund according to the Andorran Law of 12 June 2012,

Law 10/2008 and any other law or regulation that

may develop, replace or modify this law in the future;

(c)

any other investment fund, arrangement

or entity of a Contracting State which the competent

authority of that Contracting State determines to

regard as an investment fund for the purpose of this

paragraph; and

(ii) the term "pension fund or scheme" means

(a) in the case of Malta, a retirement fund or

retirement scheme licensed, regulated or otherwise

authorised under the Special Funds (Regulation) Act

(Chapter 450 of the Laws of Malta) and any other law

or regulation that may develop, replace or modify this

law in the future;

(b) in the case of Andorra, a pension fund or

scheme within the meaning of the Law Regulating the

activity of Insurance companies of 11 May 1989 and

any other law or regulation that may develop, replace

or modify this law in the future;

(c)

any other pension fund or scheme of a

Contracting State which the competent authority of

that Contracting State determines to regard as a

pension fund or scheme for the purpose of this

paragraph.

2. A partnership or a trust which is formed under the laws of a

Contracting State and which is registered for tax purposes in that

Contracting State shall be considered as a resident of that Contracting

II. With reference to Article 24 (Exchange of Information)

1. It is understood that the concept of foreseeable

relevance referred to in paragraph 1 thereto is intended to

provide for exchange of information in tax matters to the widest

possible extent and, at the same time, to clarify that the

Contracting States are not at liberty to engage in fishing

expeditions or to request information that is unlikely to be

relevant to the tax affairs of a given taxpayer.

2. The rights and safeguards secured to persons in a

Contracting State remain applicable in that Contracting State in

the course of the process of information exchange.

3. The provisions of the Convention in connection with

requests for information apply

(i) in respect to tax matters involving intentional

conduct which is liable to prosecution under the criminal

laws of the requesting Party, to taxable periods beginning

on or after the first day of January of the third year

preceding the one in which the Convention enters into

force, or where there is no taxable period, to all taxes

arising on or after the first day of January of the third year

preceding the one in which the Convention enters into

force; and

(ii) in other cases, to taxable periods beginning on or

after the first day of January of the year next following the

one in which the Convention enters into force or, where

B B 1118

there is no taxable period, for all taxes arising on or after

the first day of January of the year next following the one in

which the Convention enters into force.

IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have signed this

Protocol.

DONE at New York this 20 th day of September, 2016, in two

originals in the English and Catalan languages, both texts being

equally authentic.

For the Government of

For the Government of

the Republic of Malta

the Principality of Andorra

€2.16