DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH GEORGIA ORDER

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH GEORGIA

SUBSIDIARY LEGISLATION 123.109

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH GEORGIA ORDER

30th December, 2009

LEGAL NOTICE 65 of 2010.

This title of this order is the Double Taxation Relief

(Taxes on Income) (Georgia) Order.

AGREEMENT BETWEEN

THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF GEORGIA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of Georgia and the Government of Malta desiring to conclude an

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

with respect to taxes on income and on capital,

Have agreed as follows

Article 1

PERSONS COVERED

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

Contracting States.

Article 2

TAXES COVERED

1. This Agreement shall apply to taxes on income and on capital imposed on

behalf of a Contracting State or of its political-administrative subdivisions or local

authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income and on capital all taxes imposed

on total income, on total capital, or on elements of income or of capital, including

taxes on gains from the alienation of movable or immovable property, taxes on the

total amounts of wages or salaries paid by enterprises, as well as taxes on capital

appreciation.

It is hereby declared:-

(a) that the arrangements specified in the Agreement set

out in the Schedule to this Order have been made with

the Government of Georgia with a view to affording

relief from double taxation in relation to the following

taxes imposed by the laws of Georgia

(i) profit tax,

(ii) income tax,

(iii) property tax;

(b) that it is expedient that those arrangements should

have effect;

(c) that the Convention has entered into force on the 30th

December, 2009.

The existing taxes to which this Agreement shall apply are

(a) in the case of Georgia

(i) profit tax;

(ii) income tax;

(iii) property tax;

(hereinafter referred to as "Georgian tax");

(b) in the case of Malta

income tax;

(hereinafter referred to as "Malta tax").

This Agreement shall apply also to any identical or substantially similar

taxes which are imposed after the date of signature of this Agreement 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 which have been made in their

respective taxation laws.

Article 3

GENERAL DEFINITIONS

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

(a) the term "Georgia" means the territory defined by Georgian legislation,

including land territory, its subsoil and the air space above it, internal

waters and territorial sea, the sea bed, its sub-soil and the air space

above them, in respect of which Georgia exercises its jurisdiction and

sovereignty, as well as the contiguous zone, the exclusive economic

zone and continental shelf adjacent to its territorial sea, in respect of

which Georgia may exercise its sovereign rights and jurisdiction in

accordance with the 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 terms "a Contracting State" and "the other Contracting State" mean

Malta or Georgia, 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 of a Contracting State, except when the ship

or aircraft is operated solely between places in the other Contracting

State;

(h) the term “competent authority” means

(i)

in the case of Georgia, the Ministry of Finance or its authorised

representative;

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

authorised representative;

(i)

the term "national" means

(i)

any individual possessing the nationality or citizenship of a

Contracting State;

(ii) any legal person, partnership or association deriving its status as

such from the laws in force in a Contracting State.

2. As regards the application of the Agreement 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 Agreement 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 Agreement, 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-administrative

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 or capital situated therein.

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 Agreement, the term "permanent establishment"

means a fixed place of business through which the business of an enterprise is

wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop and

(f)

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

natural resources.

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

permanent establishment only if it lasts more than six months.

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

"permanent establishment" shall be deemed not to include

(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) of this paragraph,

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 and to income from immovable property used

for the performance of independent personal services.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a 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 Contracting State in which the permanent establishment

is situated or elsewhere.

4. Insofar as it has been customary in a Contracting State 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 Contracting State from determining the profits to be

taxed by such an apportionment as may be customary; the method of apportionment

adopted shall, however, be such that the result shall be in accordance with the

principles contained in this Article.

5. No profits shall be attributed to a permanent establishment by reason of the

mere purchase by that permanent establishment of goods or merchandise for the

enterprise.

6. For the purposes of the preceding paragraphs, the profits to be attributed to

the permanent establishment shall be determined by the same method year by year

unless there is good and sufficient reason to the contrary.

7. Where profits include items of income which are dealt with separately in

other Articles of this Agreement, then the provisions of those Articles shall not be

affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in that State.

2. 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 - p rofits on which an enterp rise 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 Agreement 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.

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 paragraph 1 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

p er m a ne n t e st ab lis h m en t s itu at ed t h er ei n, o r p er f o r m s i n t h at ot h er St ate

independent personal services from a fixed base situated therein, and the holding in

respect of which the dividends are paid is effectively connected with such permanent

establishment or fixed base. In such case the provisions of Article 7 or Article 14 of

this Agreement, as the case may be, 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 or a fixed base

situated in that other State, nor subject the company’s undistributed profits to a tax

o n t h e co m p a n y 's u n d i st r ib u t ed p r o f it s, ev e n i f t h e d i v id e n d s p ai d o r th e

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.

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, or performs in the other State independent personal services from a

fixed base situated therein and the debt-claim in respect of which the interest is paid

is effectively connected with such permanent establishment or fixed base. In such

case the provisions of Article 7 or Article 14 of this Agreement, as the case may be,

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 or a fixed base in connection with which the indebtedness on which

the interest is paid was incurred, and such interest is borne by such permanent

establishment or fixed base, then such interest shall be deemed to arise in the State in

which the permanent establishment or fixed base 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 Agreement.

Article 12

ROYALTIES

1. Royalties arising in a Contracting State and beneficially owned by a resident

of 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, or performs in that other State independent personal services from a

fixed base situated therein, and the right or property in respect of which the royalties

are paid is effectively connected with such permanent establishment or fixed base. In

such case the provisions of Article 7, or Article 14 of this Agreement, as the case

may be, shall apply.

4. Royalties shall be deemed to arise in a Contracting State when the payer is a

resident of the Contracting 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 or a fixed base in connection with which the liability to pay

the royalties was incurred, and such royalties are borne by such permanent

establishment or fixed base, then such royalties shall be deemed to arise in the State

in which the permanent establishment or fixed base 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 of this Agreement.

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 or of movable property pertaining to a fixed base

available to a resident of a Contracting State in the other Contracting State for the

purpose of performing independent personal services, including such gains from the

alienation of such a permanent establishment (alone or with the whole enterprise) or

of such fixed base, may be taxed in that other 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 that

State.

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

INDEPENDENT PERSONAL SERVICES

1. Income derived by an individual who is a resident of a Contracting State in

respect of professional services or other activities of an independent character shall

be taxable only in that State unless he has a fixed base regularly available to him in

the other Contacting State for the purpose of performing his activities. If he has such

a fixed base, the income may be taxed in the other State but only so much of it as is

attributable to that fixed base.

2. The term "professional services" includes especially independent scientific,

literary, artistic, educational or teaching activities as well as the independent

activities of physicians, lawyers, engineers, architects, dentists and accountants.

Article 15

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 16, 18 and 19 of this Agreement,

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 or a fixed

base 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 that

State.

Article 16

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 17

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15 of this Agreement,

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 sportsman,

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 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 14 and 15 of this Agreement, be taxed in the Contracting State in which the

activities of the entertainer or sportsman are exercised.

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

income derived from activities performed in a Contracting State by artistes or

sportsmen if the visit to that State is wholly or mainly supported by public funds of

one or both of the Contracting States or local authorities thereof. In such a case, the

income shall be taxable only in the Contracting State in which the artiste or the

sportsman is a resident.

Article 18

PENSIONS AND SOCIAL SECURITY PAYMENTS

Subject to the provisions of paragraph 2 of Article 19 of this Agreement, 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.

Article 19

GOVERNMENT SERVICE

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

State or a political-administrative 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-administrative 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 other 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 15, 16, 17 and 18 shall apply to salaries, wages,

pensions, and other similar remuneration in respect of services rendered in

connection with a business carried on by a Contracting State or a political-

administrative subdivision or a local authority thereof.

Article 20

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 21

OTHER INCOME

1. Items of income of a resident of a Contracting State, wherever arising, not

dealt with in the foregoing Articles of this Agreement shall be taxable only in that

State.

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 of this Agreement, 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 or performs in that other State independent personal services from a fixed

base situated therein and the right or property in respect of which the income is paid

is effectively connected with such permanent establishment or fixed base. In such

case the provisions of Article 7 or Article 14 of this Agreement shall apply.

Article 22

CAPITAL

1. Capital represented by immovable property referred to in Article 6 of this

Agreement, owned by a resident of a Contracting State and situated in the other

Contracting State, may be taxed in that other State.

2. Capital represented by 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 or by movable property pertaining to a fixed base

available to a resident of a Contracting State in the other Contracting State for the

purpose of performing independent personal services, may be taxed in that other

State.

3. Capital represented by ships and aircraft operated in international traffic by

an enterprise of a Contracting State and by movable property pertaining to the

operation of such ships and aircraft, shall be taxable only in that State.

4. All other elements of capital of a resident of a Contracting State shall be

taxable only in that State.

Article 23

ELIMINATION OF DOUBLE TAXATION

1. In the case of Georgia, double taxation shall be eliminated as follows

(a) Where a resident of Georgia derives income or owns capital which, in

accordance with the provisions of this Agreement, may be taxed in

Malta, Georgia shall allow

(i)

as a deduction from the tax on the income of that resident, an

amount equal to the income tax paid in Malta;

(ii)

as a deduction from the tax on the capital of that resident, an

amount equal to the capital tax (if any) paid in Malta.

Such deduction in either case shall not, however, exceed that part of the

income tax or capital tax, as computed before the deduction is given,

which is attributable, as the case may be, to the income or the capital

which may be taxed in Malta;

(b) Where in accordance with any provision of the Agreement income

derived or capital owned by a resident of a Georgia is exempt from tax

in Georgia, Georgia may nevertheless, in calculating the amount of tax

on the remaining income or capital of such resident, take into account

the exempted income or capital.

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 Georgia, the Georgian tax on such income shall be allowed as a credit against

the relative Malta tax payable thereon.

Article 24

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. Similarly, any debts of an enterprise of a

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

determining the taxable capital of such enterprise, be deductible under the same

conditions as if they had been contracted 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 25

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 Agreement, 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 24,

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 this 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 Contracting

State, 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 Contracting States.

3. The competent authorities of the Contracting States shall endeavour to

r e s o l v e b y m u t u a l a g r e e m e n t a n y d i ff i c u l t i e s o r d o u b t s a r i s i n g a s t o t h e

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 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 26

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

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-administrative subdivisions or local authorities, 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 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.

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 27

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 28

ENTRY INTO FORCE

1. The Contracting States shall notify each other in written form, through

diplomatic channels that the legal requirements required by their law for the entry

into force of this Agreement have been complied with.

2. This Agreement shall enter into force on the date of receipt of the later

notification. This Agreement shall have effect

(a) in the case of Georgia

(i)

in respect of taxes withheld at source, to income derived on or

after 1 January of the calendar year next following the year in

which the Agreement enters into force;

(ii) in respect of other taxes on income and on capital chargeable for

any taxable year beginning on or after 1 January of the calendar

year next following the year in which the Agreement enters into

force.

(b) in the case of Malta

in respect of taxes on income derived during 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 Agreement

enters into force.

Article 29

TERMINATION

This Agreement shall remain in force until terminated by a Contracting State.

Either of the Contracting State may after the expiration of a period of five years from

the date of its entry into force, terminate this Agreement, by giving written notice of

termination to the other Contracting State through the diplomatic channels at least

six months before the end of any calendar year. In such event, this Agreement shall

cease to have effect

(a) in the case of Georgia

(i)

in respect of taxes withheld at source, to income and on capital

derived on or after 1 January of the calendar year next following

the year in which the notice is given;

(ii) in respect of other taxes on income and on capital chargeable for

any taxable year beginning on or after 1 January of the calendar

year next following the year in which the notice is given.

(b) in the case of Malta

in respect of taxes on income derived during 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 notice is

given.

IN WITNESS WHEREOF the undersigned, being duly authorized thereto by their

respective Governments, have signed this Agreement.

Done at Rome this 23rd day of October, 2009 in duplicate in the English and

Georgian languages, both texts being equally authentic. In case of divergence

between the texts, it shall be resolved on the basis of the English text.

Walter Balzan

Konstantine Gabashvili

For the Government of Malta

For the Government of Georgia