DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE ISLE OF MAN ORDER

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE ISLE OF MAN

SUBSIDIARY LEGISLATION 123.111

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE ISLE OF MAN ORDER

26th February, 2010

LEGAL NOTICE 162 of 2010, as modified by S.L.123.183 * .

This title of this order is the Double Taxation Relief

(Taxes on Income) (Isle of Man) Order.

AGREEMENT BETWEEN

MALTA

AND

THE ISLE OF MAN

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of Malta and the Government of the Isle of Man, desiring to

conclude an Agreement for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income, have agreed as follows

Article 1

PERSONS COVERED

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

Parties.

Article 2

TAXES COVERED

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

or of its political subdivisions or local authorities, irrespective of the manner in

which they are levied.

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

income, or on elements of income, including taxes on gains from the alienation of

movable or immovable property and taxes on the total amounts of wages or salaries

paid by enterprises.

It is hereby declared:-

(a) that the arrangements specified in the Agreement set

out in the Schedule to this Order have been made with

the Government of the Isle of Man with a view to

affording relief from double taxation in relation to the

following taxes imposed by the laws of the Isle of

Man

-

taxes on income or profit;

(b) that it is expedient that those arrangements should

have effect;

(c) that the Convention has entered into force on the 26

February, 2010.

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

%20Isle%20of%20Man%20DTA%20(synthesised%20text).pdf

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The existing taxes to which this Agreement shall apply are

(a) in Malta

the income tax;

(hereinafter referred to as "Malta tax").

(b) in the case of the Isle of Man

taxes on income or profit,

(hereinafter referred to as "Manx tax").

The Agreement shall apply also to any identical or substantially similar

taxes that are imposed after the date of signature of the Agreement in addition to, or

in place of, the existing taxes.

The competent authorities of the Parties shall notify each other of any significant

changes which have been made in their taxation laws.

Article 3

GENERAL DEFINITIONS

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

(a) the term "Malta" means the Republic of Malta and, when used in a

geographical sense, means the island of Malta, the island of Gozo and

the other islands of the Maltese archipelago including the territorial

waters thereof, as well as any area of the sea-bed, its subsoil and the

superjacent water column adjacent to the territorial waters, wherein

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Malta exercises sovereign rights, jurisdiction, or control in accordance

with international law and its national law, including its legislation

relating to the exploration of the continental shelf and exploitation of its

natural resources;

(b)

the term "Isle of Man" means the island of the Isle of Man, including its

territorial sea, in accordance with international law;

(c)

the terms "a Party" and "the other Party" mean Malta or the Isle of Man,

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 Party" and "enterprise of the other Party"

mean respectively an enterprise carried on by a resident of a Party and

an enterprise carried on by a resident of the other Party;

(g)

the term "international traffic" means any transport by a ship or aircraft

operated by an enterprise of a Party, except when the ship or aircraft is

operated solely between places in the other Party;

(h)

the term "competent authority" means

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

authorised representative;

(ii) in the case of the Isle of Man, the Assessor of Income Tax or his

delegate.

(i)

the term "national", in relation to a Party, means, where applicable

(i) any individual possessing the nationality of a Party;

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

such from the laws in force in a Party.

2. As regards the application of the Agreement at any time by a Party, any term

not defined therein shall, unless the context otherwise requires, have the meaning

that it has at that time under the law of that Party for the purposes of the taxes to

which the Agreement applies, any meaning under the applicable tax laws of that

Party prevailing over a meaning given to the term under other laws of that Party.

Article 4

RESIDENT

1. For the purposes of this Agreement, the term "resident of a Party" means any

person who, under the laws of that Party, is liable to tax therein by reason of his

domicile, residence, place of management or any other criterion of a similar nature,

and also includes that Party and any political subdivision or local authority thereof

and any pension fund or pension scheme recognised by that Party. This term,

however, does not include any person who is liable to tax in that Party in respect

only of income from sources in that Party.

2. Where by reason of the provisions of paragraph 1 an individual is a resident

of both Parties, then his status shall be determined as follows

(a) he shall be deemed to be a resident only of the Party in which he has a

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

to him in both Parties, he shall be deemed to be a resident only of the

Party with which his personal and economic relations are closer (centre

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of vital interests);

(b) if the Party in which he has his centre of vital interests cannot be

determined, or if he has not a permanent home available to him in either

Party, he shall be deemed to be a resident only of the Party in which he

has an habitual abode;

(c) if he has an habitual abode in both Parties or in neither of them, he shall

be deemed to be a resident only of the Party of which he is a national;

(d) if he is a national of both Parties or of neither of them, the competent

authorities of the Parties shall settle the question by mutual agreement.

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

individual is a resident of both Parties, then it shall be deemed to be a resident only

of the Party in which its place of effective management is situated.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Agreement, the term "permanent establishment"

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

wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop; and

(f)

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

natural resources.

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

permanent establishment only if it lasts more than 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), provided that the

overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

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Notwithstanding the provisions of paragraphs 1 and 2, where a person -

other than an agent of an independent status to whom paragraph 6 applies - is acting

on behalf of an enterprise and has, and habitually exercises, in a Party an authority to

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

have a permanent establishment in that Party in respect of any activities which that

person undertakes for the enterprise, unless the activities of such person are limited

to those mentioned in paragraph 4 which, if exercised through a fixed place of

business, would not make this fixed place of business a permanent establishment

under the provisions of that paragraph.

An enterprise shall not be deemed to have a permanent establishment in a

Party merely because it carries on business in that Party through a broker, general

commission agent or any other agent of an independent status, provided that such

persons are acting in the ordinary course of their business.

The fact that a company which is a resident of a Party controls or is

controlled by a company which is a resident of the other Party, or which carries on

business in that other Party (whether through a permanent establishment or

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

of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Party from immovable property (including

income from agriculture or forestry) situated in the other Party may be taxed in that

other Party.

2. The term "immovable property" shall have the meaning which it has under

the law of the Party in which the property in question is situated. The term shall in

any case include property accessory to immovable property, livestock and equipment

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

respecting landed property apply, usufruct of immovable property and rights to

variable or fixed payments as consideration for the working of, or the right to work,

mineral deposits, sources and other natural resources; ships, boats and aircraft shall

not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct

use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from

immovable property of an enterprise 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 Party shall be taxable only in that Party

unless the enterprise carries on business in the other Party through a permanent

establishment situated therein. If the enterprise carries on business as aforesaid, the

profits of the enterprise may be taxed in the other Party but only so much of them as

is attributable to that permanent establishment.

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

carries on business in the other Party through a permanent establishment situated

therein, there shall in each Party be attributed to that permanent establishment the

profits which it might be expected to make if it were a distinct and separate

enterprise engaged in the same or similar activities under the same or similar

conditions and dealing wholly independently with the enterprise of which it is a

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permanent establishment.

3. In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes of the

permanent establishment, including executive and general administrative expenses

so incurred, whether in the Party in which the permanent establishment is situated or

elsewhere.

4. Insofar as it has been customary in a Party to determine the profits to be

attributed to a permanent establishment on the basis of an apportionment of the total

profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude

that Party from determining the profits to be taxed by such an apportionment as may

be customary; the method of apportionment adopted shall, however, be such that the

result shall be in accordance with the principles contained in this Article.

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

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

enterprise.

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

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

unless there is good and sufficient reason to the contrary.

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

other Articles of 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 Party from the operation of ships or aircraft in

international traffic shall be taxable only in that Party.

2. For the purposes of this Article, profits derived from the operation in

international traffic of ships and aircraft include profits

(a) derived from the rental on a bareboat basis of ships and aircraft if

operated in international traffic; and

(b) derived from the use, maintenance or rental of containers (including

trailers and related equipment for the transport of containers) used for

the transport of goods or merchandise,

where such rental profits or profits from such use, maintenance or rental, as the case

may be, are incidental to the profits described in paragraph 1.

3. The provisions of paragraph 1 shall also apply to profits from the

participation in a pool, a joint business or an international operating agency.

Article 9

ASSOCIATED ENTERPRISES

1. Where

(a) an enterprise of a Party participates directly or indirectly in the

management, control or capital of an enterprise of the other Party, or

(b) the same persons participate directly or indirectly in the management,

control or capital of an enterprise of a Party and an enterprise of the

other Party,

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

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their commercial or financial relations which differ from those which would be made

between independent enterprises, then any profits which would, but for those

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

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

accordingly.

2. Where a Party includes in the profits of an enterprise of that Party - and

taxes accordingly - profits on which an enterprise of the other Party has been

charged to tax in that other Party and the profits so included are profits which would

have accrued to the enterprise of the first-mentioned Party if the conditions made

between the two enterprises had been those which would have been made between

independent enterprises, then that other Party shall make an appropriate adjustment

to the amount of the tax charged therein on those profits. In determining such

adjustment, due regard shall be had to the other provisions of this Agreement and the

competent authorities of the Parties shall if necessary consult each other.

Article 10

DIVIDENDS

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

the other Party who is the beneficial owner thereof, shall be taxable only in that

other Party.

2. However, so long as Malta operates a full imputation system of taxation of

company profits, where the dividends are paid by a company which is a resident of

Malta to a resident of the Isle of Man who is the beneficial owner thereof, Malta may

also charge tax on the gross amount of the dividends, which tax shall not exceed that

chargeable on the profits out of which the dividends are paid.

3. 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,

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 Party 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 Party, carries on business in the other Party of

which the company paying the dividends is a resident, through a permanent

establishment situated therein, or performs in that other Party 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 Party derives profits or income

from the other Party, that other Party may not impose any tax on the dividends paid

by the company, except insofar as such dividends are paid to a resident of that other

Party or insofar as the holding in respect of which the dividends are paid is

effectively connected with a permanent establishment or a fixed base situated in that

other Party, nor subject the company's undistributed profits to a tax on the

company’s undistributed profits, even if the dividends paid or the undistributed

profits consist wholly or partly of profits or income arising in such other Party.

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Article 11

INTEREST

1. Interest arising in a Party and beneficially owned by a resident of the other

Party shall be taxable only in that other Party.

2. The term "interest" as used in this Article means income from debt-claims of

every kind, whether or not secured by mortgage and whether or not carrying a right

to participate in the debtor’s profits, and in particular, income from government

securities and income from bonds or debentures, including premiums and prizes

attaching to such securities, bonds or debentures. Penalty charges for late payment

shall not be regarded as interest for the purpose of this Article.

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the

interest, being a resident of a Party, carries on business in the other Party in which

the interest arises, through a permanent establishment situated therein, or performs

in that other Party 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 Party, due regard being had to the other

provisions of this Agreement.

Article 12

ROYALTIES

1. Royalties arising in a Party and beneficially owned by a resident of the other

Party shall be taxable only in that other Party.

2. The term "royalties" as used in this Article means payments of any kind

received as a consideration for the use of, or the right to use, any copyright of

literary, artistic or scientific work including cinematograph films, any patent, trade

mark, design or model, plan, secret formula or process, or for information

concerning industrial, commercial or scientific experience.

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the

royalties, being a resident of a Party, carries on business in the other Party in which

the royalties arise, through a permanent establishment situated therein, or performs

in that other Party 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 Party, due regard being

had to the other provisions of this Agreement.

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Article 13

CAPITAL GAINS

1. Gains derived by a resident of a Party from the alienation of immovable

property referred to in Article 6 and situated in the other Party may be taxed in that

other Party.

2. Gains from the alienation of movable property forming part of the business

property of a permanent establishment which an enterprise of a Party has in the other

Party or of movable property pertaining to a fixed base available to a resident of a

Party in the other Party 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 Party.

3. Gains derived by an enterprise of a Party from the alienation of ships or

aircraft operated in international traffic, or from movable property pertaining to the

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

4. Gains derived by a resident of a Party from the alienation of shares deriving

more than 50 percent of their value directly or indirectly from immovable property

situated in the other Party may be taxed in that other Party.

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

paragraphs 1, 2, 3 and 4 shall be taxable only in the Party of which the alienator is a

resident.

Article 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Party in respect of professional services or

other activities of an independent character shall be taxable only in that Party unless

he has a fixed base regularly available to him in the other Party for the purpose of

performing his activities. If he has such a fixed base, the income may be taxed in the

other Party 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, salaries, wages and other

similar remuneration derived by a resident of a Party in respect of an employment

shall be taxable only in that Party unless the employment is exercised in the other

Party. If the employment is so exercised, such remuneration as is derived therefrom

may be taxed in that other Party.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a

resident of a Party in respect of an employment exercised in the other Party shall be

taxable only in the first-mentioned Party if

(a) the recipient is present in the other Party for a period or periods not

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

commencing or ending in the fiscal year concerned, and

(b) the remuneration is paid by, or on behalf of, an employer who is not a

resident of the other Party, and

(c) the remuneration is not borne by a permanent establishment or a fixed

base which the employer has in the other Party.

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3. Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft operated in

international traffic by an enterprise of a Party may be taxed in that Party.

Article 16

DIRECTORS’ FEES

Directors’ fees and other similar payments derived by a resident of a Party in his

capacity as a member of the board of directors of a company which is a resident of

the other Party may be taxed in that other Party.

Article 17

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a

resident of a Party as an entertainer, such as a theatre, motion picture, radio or

television artiste, or a musician, or as a sportsman, from his personal activities as

such exercised in the other Party, may be taxed in that other Party.

2. Where income in respect of personal activities exercised by an entertainer or

a sportsman in his capacity as such accrues not to the entertainer or sportsman

himself but to another person, that income may, notwithstanding the provisions of

Articles 7, 14 and 15, be taxed in the Party in which the activities of the entertainer

or sportsman are exercised.

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

activities exercised in a Party by an entertainer or a sportsman if the visit to that

Party is wholly or mainly supported by public funds of one or both of the Parties or

local authorities thereof. In such case, the income shall be taxable only in the Party

of which the entertainer or a sportsman is a resident.

Article 18

PENSIONS AND SOCIAL SECURITY PAYMENTS

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

similar remuneration paid to a resident of a Party in consideration of past

employment shall be taxable only in that Party.

2. Notwithstanding the provisions of paragraph 1, payments made and pensions

paid under the social security legislation of a Party shall be taxable only in that

Party.

Article 19

GOVERNMENT SERVICE

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

political subdivision or a local authority thereof to an individual in

respect of services rendered to that Party or subdivision or authority

shall be taxable only in that Party.

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

taxable only in the other Party if the services are rendered in that Party

and the individual is a resident of that Party who

(i) is a national of that Party; or

(ii) did not become a resident of that Party solely for the purpose of

rendering the services.

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

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similar remuneation paid by, or out of funds created by, a Party or a

political subdivision or a local authority thereof to an individual in

respect of services rendered to that Party or subdivision or authority

shall be taxable only in that Party.

(b) However, such pensions and similar remuneration shall be taxable only

in the other Party if the individual is a resident of, and a national of, that

Party.

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 Party or a political subdivision or a local

authority thereof.

Article 20

STUDENTS AND BUSINESS APPRENTICES

Payments which a student or business apprentice who is or was immediately

before visiting a Party a resident of the other Party and who is present in the first-

mentioned Party solely for the purpose of his education or training receives for the

purpose of his maintenance, education or training shall not be taxed in that Party,

provided that such payments arise from sources outside that Party.

Article 21

OTHER INCOME

1. Items of income of a resident of a Party, wherever arising, not dealt with in

the foregoing Articles of this Agreement shall be taxable only in that Party.

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

from immovable property as defined in paragraph 2 of Article 6, if the recipient of

such income, being a resident of a Party, carries on business in the other Party

through a permanent establishment situated therein, or performs in that other Party

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, as the case may be, shall apply.

Article 22

ELIMINATION OF DOUBLE TAXATION

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

Subject to the provisions of the law of Malta regarding the allowance of

a credit against Malta tax in respect of foreign tax, where, in accordance

with the provisions of this Agreement , there is included in a Malta

assessment income from sources within the Isle of Man, the Manx tax

on such income shall be allowed as a credit against the relative Malta

tax payable thereon.

2. In the case of the Isle of Man, double taxation shall be eliminated as

follows

a)

When imposing tax on its residents the Isle of Man may include in the

basis upon which such taxes are imposed the items of income, which,

according to the provisions of this Agreement, may be taxed in Malta.

b)

Where a resident of the Isle of Man derives income which, in

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

Malta the Isle of Man shall allow as a deduction from the tax on the

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

Malta. Such deduction in either case shall not, however, exceed that part

of the income tax, as computed before the deduction is given, which is

attributable to the income which may be taxed in Malta.

c)

Notwithstanding the provisions of subparagraph b), where a company

which is a resident of the Isle of Man has held at least 25 percent of the

capital of a company which is a resident of Malta paying dividends for

at least 12 months prior to the decision to distribute the dividends, the

Isle of Man shall exempt from tax the dividends paid to the company

which is a resident of the Isle of Man by the company which is a

resident of Malta.

Article 23

NON-DISCRIMINATION

1. Nationals of a Party shall not be subjected in the other Party to any taxation

or any requirement connected therewith which is other or more burdensome than the

taxation and connected requirements to which nationals of that other Party in the

same circumstances, in particular with respect to residence, are or may be subjected.

This provision shall, notwithstanding the provisions of Article 1, also apply to

persons who are not residents of one or both of the Parties.

2. The taxation on a permanent establishment which an enterprise of a Party

has in the other Party shall not be less favourably levied in that other Party than the

taxation levied on enterprises of that other Party carrying on the same activities. This

provision shall not be construed as obliging a Party to grant to residents of the other

Party any personal allowances, reliefs and reductions for taxation purposes on

account of civil status or family responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 4 of

Article 11, or paragraph 4 of Article 12 apply, interest, royalties and other

disbursements paid by an enterprise of a Party to a resident of the other Party shall,

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

under the same conditions as if they had been paid to a resident of the first-

mentioned Party.

4. Enterprises of a Party, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by one or more residents of the other Party, shall

not be subjected in the first-mentioned Party to any taxation or any requirement

connected therewith which is other or more burdensome than the taxation and

connected requirements to which other similar enterprises of the first-mentioned

Party are or may be subjected.

5. The provisions of this Article shall, notwithstanding the provisions of

Article 2, apply to taxes of every kind and description.

Article 24

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of the Parties result

or will result for him in taxation not in accordance with the provisions of this

Agreement, he may, irrespective of the remedies provided by the domestic law of

those Parties, present his case to the competent authority of the Party of which he is

a resident or, if his case comes under paragraph 1 of Article 23, to that of the Party

of which he is a national. The case must be presented within three years from the

first notification of the action resulting in taxation not in accordance with the

provisions of the Agreement.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE ISLE OF MAN

2. The competent authority shall endeavour, if the objection appears to it to be

justified and if it is not itself able to arrive at a satisfactory solution, to resolve the

case by mutual agreement with the competent authority of the other Party, with a

view to the avoidance of taxation which is not in accordance with the Agreement.

Any agreement reached shall be implemented notwithstanding any time limits in the

domestic law of the Parties.

3. The competent authorities of the Parties shall endeavour to resolve by

mutual agreement any difficulties or doubts arising as to the interpretation or

application of the Agreement . They may also consult together for the elimination of

double taxation in cases not provided for in the Agreement.

4. The competent authorities of the Parties may communicate with each other

directly, including through a joint commission consisting of themselves or their

representatives, for the purpose of reaching an agreement in the sense of the

preceding paragraphs.

Article 25

EXCHANGE OF INFORMATION

1. The competent authorities of the Parties shall exchange such information as

is foreseeably relevant for carrying out the provisions of this Agreement or to the

administration or enforcement of the domestic laws concerning taxes covered by this

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

exchange of information is not restricted by Article 1.

2. Any information received under paragraph 1 by a Party shall be treated as

secret in the same manner as information obtained under the domestic laws of that

Party and shall be disclosed only to persons or authorities (including courts and

administrative bodies) concerned with the assessment or collection of, the

enforcement or prosecution in respect of, the determination of appeals in relation to

the taxes referred to in paragraph 1, or the oversight of the above. Such persons or

authorities shall use the information only for such purposes. They may disclose the

information in public court proceedings or in judicial decisions.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to

impose on a Party the obligation

(a) to carry out administrative measures at variance with the laws and

administrative practice of that or of the other Party;

(b) to supply information which is not obtainable under the laws or in the

normal course of the administration of that or of the other Party;

(c) to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, or

information, the disclosure of which would be contrary to public policy

(ordre public).

4. If information is requested by a Party in accordance with this Article, the

other Party shall use its information gathering measures to obtain the requested

information, even though that other Party may not need such information for its own

tax purposes. The obligation contained in the preceding sentence is subject to the

limitations of paragraph 3 but in no case shall such limitations be construed to

permit a Party to decline to supply information solely because it has no domestic

interest in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a Party

to decline to supply information solely becasue the information is held by a bank,

other financial institution, nominee or person acting in an agency or a fiduciary

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE ISLE OF MAN

capacity or because it relates to ownership interests in a person.

Article 26

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 27

ENTRY INTO FORCE

1. The Parties shall notify each other that the legal requirements for the entry

into force of this Agreement have been complied with.

2. This Agreement shall enter into force thirty days after the date of the later of

the notifications referred to in paragraph 1 and its provisions shall have effect in

respect of taxes on income derived during any taxable period or accounting period,

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

following the date on which the Agreement enters into force.

Article 28

TERMINATION

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

terminate the Agreement by giving notice of termination at least six months before

the end of any calendar year beginning after the expiration of a period of five years

from the date of its entry into force. In such event, the Agreement shall cease to have

effect in respect of taxes on income derived during any taxable period or accounting

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

immediately following the date on which the notice of termination is given.

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

respective Governments, have signed this Agreement.

DONE at London this 23rd day of October, 2009 in duplicate in the English

language.

Joseph Zammit Tabona

Allan Robert Bell

For the Government of

For the Government of

Malta

the Isle of Man

PROTOCOL

At the moment of signing the Agreement between Malta and the Isle of Man for

the avoidance of double taxation and the prevention of fiscal evasion with respect to

taxes on income, the undersigned have agreed upon the following provisions which

shall form an integral part of the Agreement.

It is understood that the provisions of the Agreement shall not prevent the

application of the Agreement in the form of an exchange of letters signed by Malta

on the 5 May, 2004 and by the Isle of Man on the 19 November, 2004 providing for

measures equivalent to those laid down in Council Directive 2003/48/EC on taxation

of savings income in the form of interest payments.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE ISLE OF MAN

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

respective Governments, have signed this Protocol.

DONE at London this 23rd day of October, 2009 in duplicate in the English

language.

Joseph Zammit Tabona

Allan Robert Bell

For the Government of

For the Government of

Malta

the Isle of Man