DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND ORDER

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

SUBSIDIARY LEGISLATION 123.11

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE REPUBLIC OF FINLAND

ORDER

30th December, 2001

LEGAL NOTICE 34 of 2002, as modified by S.L.123.183 * .

The title of this order is the Double Taxation Relief on

Taxes on Income with the Republic of Finland Order.

AGREEMENT BETWEEN

MALTA AND THE REPUBLIC OF FINLAND

FOR THE AVOIDANCE OF DOUBLE TAXATION WITH

RESPECT TO TAXES ON INCOME

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

desiring to conclude an Agreement for the avoidance of double taxation 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 Contracting States.

Article 2

Taxes covered

1. This Agreement shall apply to taxes on income imposed on behalf of a

Contracting State or of its 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, 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 Republic of Finland with a view to affording relief

from double taxation in relation to the following taxes

imposed by the laws of the Republic of Finland

(i)

the state income taxes (valtion tuloverot; de

statliga inkomstskatterna);

(ii) the corporate income tax (yhteisöjen tulovero;

inkomstskatten för samfund);

(iii) the

communal

tax

(kunnallisvero;

kommunalskatten);

(iv) the church tax (kirkollisvero; kyrkoskatten);

(v) the tax withheld at source from interest

(korkotulon

lähdevero;

källskatten

på

ränteinkomst); and

(vi) the tax withheld at source from non-residents'

income (rajoitetusti verovelvollisen lähdevero;

källskatten för begränsat skattskyldig);

(b) that it is expedient that those arrangements should

have effect;

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

December, 2001.

*https://cfr.gov.mt/en/inlandrevenue/itu/Documents/Malta%20-

%20Finland%20DTA%20(synthesised%20text).pdf

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

The existing taxes to which the Agreement shall apply are

(a) in Finland

(i)

the state income taxes (valtion tuloverot; de statliga

inkomstskatterna);

(ii) the corporate income tax (yhteisöjen tulovero; inkomstskatten för

samfund);

(iii) the communal tax (kunnallisvero; kommunalskatten);

(iv) the church tax (kirkollisvero; kyrkoskatten);

(v) the tax withheld at source from interest (korkotulon lähdevero;

källskatten på ränteinkomst); and

(vi) the tax withheld at source from non-residents’ income (rajoitetusti

verovelvollisen lähdevero; källskatten för begränsat skattskyldig);

(hereinafter referred to as ''Finnish tax'');

(b) in Malta

the income tax;

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

The Agreement shall apply also to any identical or substantially similar

taxes which 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 Contracting States

shall notify each other of any significant changes which have been made in their

respective taxation laws.

Article 3

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

General definitions

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

(a) the term ''Finland'' means the Republic of Finland and, when used in a

geographical sense, means the territory of the Republic of Finland, and any area

adjacent to the territorial waters of the Republic of Finland within which, under the

laws of Finland and in accordance with international law, the rights of Finland with

respect to the exploration for and exploitation of the natural resources of the sea bed

and its sub-soil and of the superjacent waters may be exercised;

(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 the Republic of 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 ''person'' includes an individual, a company and any other body of

persons;

(d) the term ''company'' means any body corporate or any entity that is treated as

a body corporate for tax purposes;

(e) 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;

(f)

the term ''national'' means

(i)

any individual possessing the nationality 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;

(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 Finland, the Ministry of Finance, its authorised representative

or the authority which, by the Ministry of Finance, is designated

as competent authority;

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

representative.

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

Residence

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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

reason of his domicile, residence, place of management, place of incorporation

(registration) or any other criterion of a similar nature, and also includes that State

and any statutory body 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, the competent authorities of the

Contracting States shall settle the question by mutual agreement and determine the

mode of application of the Agreement to such person. In so settling and determining

the status of that person other than an individual, consideration shall be given to the

rules contained in paragraph 3 of Article 4 of the OECD Model Tax Convention,

adopted in 1992 (as amended from time to time), especially to the reference

concerning the place of effective management.

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 including an offshore drilling site.

3. The term ''permanent establishment'' likewise encompasses

(a) a building site, a construction, assembly or installation project or

supervisory activities in connection therewith, but only where such site,

project or activities continue for a period of more than twelve months;

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

(b) the furnishing of services, including consultancy services, by an

enterprise through employees or other personnel engaged by the

enterprise for such purpose, but only where activities of that nature

continue (for the same or a connected project) within a Contracting

State for a period or periods aggregating more than twelve months

within any eighteen-month period.

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. (a) The term ''immovable property'' shall, subject to the provisions of sub-

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

paragraphs b) and c), have the meaning which it has under the law of the

Contracting State in which the property in question is situated.

(b) The term ''immovable property'' shall in any case include buildings,

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, or to explore for, mineral deposits,

sources and other natural resources.

(c) 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. Where the ownership of shares or other corporate rights in a company

entitles the owner of such shares or corporate rights to the enjoyment of immovable

property held by the company, the income from the direct use, letting, or use in any

other form of such right to enjoyment may be taxed in the Contracting State in which

the immovable property is situated.

5. 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 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. 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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

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. Profits of an enterprise of a Contracting State from the use, maintenance or

rental of containers (including trailers, barges and related equipment for the

transport of containers) used for the transport of goods or merchandise shall be

taxable only in that State, except where such containers are used for the transport of

goods or merchandise solely between places within the other Contracting State.

3. The provisions of paragraphs 1 and 2 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 tax charged therein on those

profits, where that other State considers the adjustment justified. 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 Finland to a resident of

Malta may be taxed in Malta. However, such dividends may also be taxed in Finland

and according to Finnish law, but

(a) if the beneficial owner of the dividends is a resident of Malta, the tax so

charged shall not exceed -

(i)

5 per cent of the gross amount of the dividends if the beneficial

owner is a company (other than a partnership) which controls

directly at least 10 per cent of the voting power in the company

paying the dividends;

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

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(ii) 15 per cent of the gross amount of the dividends in all other cases;

(b) notwithstanding the provisions of sub-paragraph a), as long as an

individual resident in Finland is under Finnish tax law entitled to a tax

credit in respect of dividends paid by a company resident in Finland,

dividends paid by a company which is a resident of Finland to a resident

of Malta shall be taxable only in Malta if the beneficial owner of the

dividends is a resident of Malta.

2. Dividends paid by a company which is a resident of Malta to a resident of

Finland may be taxed in Finland. However, such dividends may also be taxed in

Malta and according to Maltese law, but -

(a) if the beneficial owner of the dividends is a resident of Finland, no

Malta tax shall be charged on the gross amount of the dividends in

excess of the tax chargeable on the profits out of which the dividends

are paid;

(b) notwithstanding the provisions of sub-paragraph (a), Malta tax shall not

exceed 15 per cent of the dividends if such dividends are paid out of

gains or profits earned in any year in respect of which the company is in

receipt of any benefit under the provisions regulating aids to industries

in Malta, and the shareholder submits returns and accounts to the

taxation authorities of Malta in respect of his income liable to Malta tax

for the relative year of assessment.

3. The provisions of paragraphs 1 and 2 shall not affect the taxation of the

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

4. 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 State of which the company making the distribution is

a resident.

5. 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, or performs in that other State

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, as

the case may be, shall apply.

6. 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 c o m p a n y ' s u n d i s t r i b u t e d p r o f i t s , e v e n i f t h e d i v i d e n d s pa i d o r t h 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 shall be taxable only in the other

Contracting State if the beneficial owner of the interest is a resident of that other

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WITH THE REPUBLIC OF FINLAND

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 that 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, as the case may be, 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 Contracting State, due regard being had to the

other provisions of this Agreement.

Article 12

Royalties

1. Royalties arising in a Contracting State shall be taxable only in the other

Contracting State if the beneficial owner of the royalties is a resident of 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, and films or tapes

for television or radio broadcasting, 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, as the case may be, 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 Contracting State, due

regard being had to the other provisions of this Agreement.

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WITH THE REPUBLIC OF FINLAND

Article 13

Capital gains

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

immovable property referred to in paragraph 2 of Article 6 and situated in the other

Contracting State may be taxed in that other State.

2. Gains derived by a resident of a Contracting State from the alienation of

shares or other corporate rights in a company deriving their value or the greater part

of their value directly or indirectly from immovable property which forms part of the

assets of the company and which is situated in the other Contracting State may be

taxed in that other State. In this paragraph the term ''shares'' does not include shares

quoted or listed on a recognised stock exchange.

3. 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.

4. Gains derived by an enterprise of a Contracting State from the alienation of

ships or aircraft operated in international traffic or movable property pertaining to

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

5. Gains derived by an enterprise of a Contracting State from the alienation of

containers (including trailers, barges and related equipment for the transport of

containers) used for the transport of goods or merchandise shall be taxable only in

that State, except where such containers are used for the transport of goods or

merchandise solely between places within the other Contracting State.

6. Gains from the alienation of any property other than that referred to in the

preceding paragraphs of this Article, shall be taxable only in the Contracting State of

which the alienator is a resident.

Article 14

Independent personal services

1. Income derived by 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 except in the following circumstances, when such income may also

be taxed in the other Contracting State

(a) if he has a fixed base regularly available to him in that other State for

the purpose of performing his activities; in that case, only so much of

the income as is attributable to that fixed base may be taxed in that other

State; or

(b) if his stay in that other State is for a period or periods amounting to or

exceeding in the aggregate 183 days within any twelve-month period

commencing or ending in the calendar year concerned; in that case, only

so much of the income as is derived from his activities performed in that

other State during such period or periods may be taxed in that other

State.

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.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

Article 15

Dependent personal services

1. Subject to the provisions of Articles 16, 18 and 19, 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 within any twelve-month period

commencing or ending in the calendar 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 or any other

similar organ 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, 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 7, 14 and 15, be taxed in the Contracting State in which the activities of the

entertainer or sportsman are exercised.

Article 18

Pensions, annuities and similar payments

1. Subject to the provisions of paragraph 2 of Article 19, 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, and subject to the provisions

of paragraph 2 of Article 19, pensions paid and other benefits, whether periodic or

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WITH THE REPUBLIC OF FINLAND

lump-sum compensation, awarded under the social security legislation of a

Contracting State or under any public scheme organised by a Contracting State for

social welfare purposes, or any annuity arising in a Contracting State, shall be

taxable only in that State.

3. The term ''annuity'' as used in this Article means a stated sum payable

periodically at stated times during life, or during a specified or ascertainable period

of time, under an obligation to make the payments in return for adequate and full

consideration in money or money’s worth (other than services rendered).

Article 19

Government service

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

paid by a Contracting State or a statutory body or a local authority

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

body or authority shall be taxable only in that State.

(b) However, such salaries, wages and other similar remuneration shall be

taxable only in the Contracting State of which the individual is a

resident if the services are rendered in that State and the individual -

(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) Any pension paid by, or out of funds created by, a Contracting State or a

statutory body or a local authority thereof to an individual in respect of

services rendered to that State or body or authority shall be taxable only

in that State.

(b) However, such pension shall be taxable only in the Contracting State of

which the individual is a resident if he is a national of that State.

3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages

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

connection with a business carried on by a Contracting State or a statutory body or a

local authority thereof.

Article 20

Students and trainees

A student, trainee or apprentice who is present in a Contracting State solely

for the purpose of his education or training and who is, or immediately before being

so present was, a resident of the other Contracting State shall be exempt from tax in

the first-mentioned State on payments received from outside that first-mentioned

State for the purpose of his maintenance, education or training.

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, 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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

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, as the case may be, shall apply.

Article 22

Elimination of double taxation

1. Subject to the provisions of Finnish law regarding the elimination of

international double taxation (which shall not affect the general principle hereof),

double taxation shall be eliminated in Finland as follows

(a) Where a resident of Finland derives income which, in accordance with

the provisions of this Agreement, may be taxed in Malta, Finland shall,

subject to the provisions of sub-paragraph b), allow as a deduction from

the Finnish tax of that person, an amount equal to the Malta tax paid

under Maltese law and in accordance with the Agreement, as computed

by reference to the same income by reference to which the Finnish tax is

computed.

(b) Dividends paid by a company being a resident of Malta to a company

which is a resident of Finland and which controls directly at least 10 per

cent of the voting power in the company paying the dividends shall be

exempt from Finnish tax.

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

derived by a resident of Finland is exempt from tax in Finland, Finland

may nevertheless, in calculating the amount of tax on the remaining

income of such person, take into account the exempted income.

2. In 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 Finland, the Finnish tax on such

income shall be allowed as a credit against the relative Malta tax

payable thereon.

Article 23

Limitation of relief

The provisions of Articles 6 to 21 shall not apply to persons entitled to any

special tax benefit under

(a) a law of a Contracting State which has been identified in an Exchange

of Notes between the Governments of the Contracting States; or

(b) any substantially similar law subsequently enacted.

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.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

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 4 of

Article 11, or paragraph 4 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.

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 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 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 necessary for carrying out the provisions of this Agreement or of

the domestic laws of the Contracting States concerning taxes covered by the

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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

exchange of information is not restricted by Article 1. Any information received 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, or the

determination of appeals in relation to, the taxes covered by the Agreement. 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.

2. In no case shall the provisions of paragraph 1 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).

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 Governments of the Contracting States shall notify each other 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

(a) in Finland

(i)

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

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

which the Agreement enters into force;

(ii) in respect of other taxes on income, for taxes chargeable for any

tax year beginning on or after 1 January in the calendar year next

following the year in which the Agreement enters into force;

(b) in Malta

in respect of taxes on income derived during any calendar year or

accounting period, as the case may be, beginning on or after 1

January immediately following the date on which the Agreement

enters into force.

3. The Agreement between Malta and Finland for the avoidance of double

taxation with respect to taxes on income and on capital, signed at Helsinki on 24

March 1975, (hereinafter referred to as ''the 1975 Agreement''), shall cease to have

effect with respect to taxes to which this Agreement applies in accordance with the

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

provisions of paragraph 2. The 1975 Agreement shall terminate on the last date on

which it has effect in accordance with the foregoing provision of this paragraph.

Article 29

Termination

This Agreement shall remain in force until terminated by a Contracting

State. Either Contracting State may terminate the Agreement, through diplomatic

channels, by giving notice of termination at least six months before the end of any

calendar year following after the period of five years from the date on which the

Agreement enters into force. In such event, the Agreement shall cease to have effect

(a) in Finland

(i)

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

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

which the notice is given;

(ii) in respect of other taxes on income, for taxes chargeable for any

tax year beginning on or after 1 January in the calendar year next

following the year in which the notice is given;

(b) in Malta

in respect of taxes on income derived during any calendar year or

accounting period, as the case may be, beginning on or after 1

January immediately following the date on which the notice is

given.

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

Agreement.

Done in duplicate at Rome this 30th day of October 2000, in the English language.

Joseph Cassar

Dieter Vitzthum

For the Government of

For the Government of

Malta

the Republic of Finland

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

Mr Joseph Cassar

Ambassador of the Republic of Malta

Your Excellency,

I have the honour to refer to the Agreement between the Republic of Finland

and Malta for the avoidance of double taxation with respect to taxes on income

(hereinafter referred to as ''the Agreement'') which has been signed today and to

propose on behalf of the Government of the Republic of Finland the following

With reference to Article 23

The provisions of Articles 6 to 21 of the Agreement shall not apply to

persons who are entitled to

(a) a special tax benefit under the Malta Financial Services Centre Act

(Cap. 330), except for those persons who opt under section 41 of the

said Act to be subject to the normal provisions of the Income Tax Act

(Cap. 123) and of the Income Tax Management Act, 1994; or

(b) exemption or any other special tax benefit under the provisions of the

Merchant Shipping Act, 1973, as amended; this does not, however,

apply to income that is subject to the normal Malta income tax; or

(c) any special tax benefit in respect of distributions by a trust subject to

the provisions of the Trusts Act given that a trust as laid down in that

Act is not vested with legal personality and therefore cannot benefit

under the Agreement in its own right, or

(d) any special tax benefit under any substantially similar law subsequently

enacted and which is agreed by the competent authorities of the

Contracting States as included within the terms of Article 23.

If the foregoing proposals are acceptable to the Government of Malta, I have

the honour to suggest that the present Note and Your Excellency’s reply to that effect

should be regarded as constituting an agreement between the two Governments in

this matter, which shall enter into force at the same time as the entry into force of the

Agreement.

I avail myself of this opportunity to extend to you, Your Excellency, the

assurance of my highest consideration.

Rome, 30 October 2000

Dieter Vitzthum

Ambassador of Finland

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND

Mr Dieter Vitzhum

Ambassador of Finland

Rome

Your Excellency,

I have the honour to acknowledge receipt of your Excellency’s Note of

today’s date which reads as follows

''I have the honour to refer to the Agreement between the Republic of Finland and

Malta for the avoidance of double taxation with respect to taxes on income

(hereinafter referred to as ''the Agreement'') which has been signed today and to

propose on behalf of the Government of the Republic of Finland the following

With reference to Article 23

The provisions of Articles 6 to 21 of the Agreement shall not apply to

persons who are entitled to

(a) a special tax benefit under the Malta Financial Services Centre Act

(Cap. 330), except for those persons who opt under section 41 of the

said Act to be subject to the normal provisions of the Income Tax Act

(Cap. 123) and of the Income Tax Management Act, 1994; or

(b) exemption or any other special tax benefit under the provisions of the

Merchant Shipping Act, 1973, as amended; this does not, however,

apply to income that is subject to the normal Malta income tax; or

(c) any special tax benefit in respect of distributions by a trust subject to

the provisions of the Trusts Act given that a trust as laid down in that

Act is not vested with legal personality and therefore cannot benefit

under the Agreement in its own right, or

(d) any special tax benefit under any substantially similar law subsequently

enacted and which is agreed by the competent authorities of the

Contracting States as included within the terms of Article 23.

If the foregoing proposals are acceptable to the Government of Malta, I have

the honour to suggest that the present Note and Your Excellency’s reply to that effect

should be regarded as constituting an agreement between the two Governments in

this matter, which shall enter into force at the same time as the entry into force of the

Agreement.''

The foregoing proposals being also acceptable to the Government of Malta, I

have the honour to confirm that Your Excellency’s Note and this reply shall be

regarded as constituting an agreement between the two Governments in this matter,

which shall enter into force at the same time as the entry into force of the

Agreement.

I take this opportunity to renew to you, Your Excellency, the assurance of

my highest consideration.

Rome, 30 October 2000

Joseph Cassar

Ambassador of Malta

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FINLAND