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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

SUBSIDIARY LEGISLATION 123.14

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE REPUBLIC OF FRANCE

ORDER

4th February, 1983

LEGAL NOTICE 5 of 1983, as amended by Legal Notices 238 of 1998

and 329 of 2010, as modified by S.L.123.183.

The title of this Order is Double Taxation Relief on Taxes

on Income with the Republic of France Order.

AGREEMENT BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF MALTA

AND

THE GOVERNMENT OF THE FRENCH REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION AND

THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND CAPITAL

The Government of the Republic of Malta and the Government of the French

Republic 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

CHAPTER I

Scope of the Agreement

ARTICLE 1

Personal Scope

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

Contracting States.

ARTICLE 2 *

Taxes Covered

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

behalf of each Contracting State or of its political subdivisions or local authorities,

irrespective of the manner in which they are levied.

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

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

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

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

appreciation.

(3)

The existing taxes to which the Agreement shall apply are

(a) in the case of France

(i) the income tax;

(ii) the corporation tax; including any withholding tax, prepayment

(precompte) or advance payment with respect to the aforesaid

taxes;

(iii) the solidarity tax on wealth;

(iv) the tax on salaries ("la taxe sur les salaires");

(v) widespread social security contributions (contributions sociales

généralisées) and contributions for the reimbursement of the

social debt (contributions pour le remboursement de la dette

sociale);

(hereinafter referred to as "French tax'');

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

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(b) in the case of Malta

the income tax,

(hereinafter referred to as "Malta tax").

(4) The Agreement shall apply also to any identical or substantially similar

taxes which are imposed after the date of signature of this Agreement in addition to,

or in place of, the existing taxes. The competent authorities of the Contracting States

shall notify to each other any substantial changes which have been made in their

respective taxation laws.

CHAPTER II

Definitions

ARTICLE 3

General Definitions

(1)

In this Agreement

(a) the term "France" means the European and overseas departments

(Guadeloupe, Guyane, Martinque and Reunion) of the French Republic, and any area

outside the territorial sea of those departments which is, in accordance with

international law, an area within which France may exercise rights with respect to

the sea-bed and subsoil and their natural resources;

(b) the term "Malta" means the Republic of Malta and includes in addition to the

Island of Malta, the Island of Gozo and the other islands of the Maltese Archipelago,

together with the territorial waters thereof, and any area outside the territorial sea of

Malta which, in accordance with international law, has been or may hereafter be

designated, under the law of Malta concerning the Continental Shelf, as an area

within which the rights of Malta with respect to the sea bed and subsoil and their

natural resources may be exercised;

(c) the term "person" means an individual, a company and any other body of

persons;

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

(i)

in respect of France, all individuals possessing the nationality of

France;

(ii) in respect of Malta all citizens of Malta as provided for in Chapter III of

the Constitution of Malta and in the Maltese Citizenship Act;

(iii) all legal persons, partnerships and associations deriving their status as

such from the law in force in a Contracting State;

(h) the term "international traffic" means any transport by ship or aircraft

operated by an enterprise which has its place of effective management in a

Contracting State, except when the ship or aircraft is operated solely between places

in the other Contracting State;

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(i)

the term "competent authority" means -

(i)

in the case of France, the Minister of Economy and Finance or his

authorised representative;

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

authorised representative.

(2) As regards the application of the Agreement by a Contracting State, any

term not defined therein shall have the meaning which it has under the laws of that

State concerning the taxes to which the Agreement applies. The meaning of a term

under the taxation law of that State shall have priority over the meaning provided for

such term in other branches of law of that State.

ARTICLE 4

Fiscal Domicile

(1) For the purpose of this Agreement, the term "resident of a Contracting State"

means any person who, under the law of that State, is liable to taxation therein by

reason of his domicile, residence, place of management or any other criterion of a

similar nature. But this term does not include any person who is liable to tax in that

Contracting State in respect only of income from sources therein or capital situated

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 of the Contracting State in which he

has a permanent home available to him. If he has a permanent home

available to him in both Contracting States, he shall be deemed to be a

resident of the Contracting State with which his personal and economic

relations are closest (centre of vital interests);

(b) if the Contracting 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 Contracting State, he shall be deemed to be a resident of

the Contracting State in which he has a habitual abode;

(c) if he has a habitual abode in both Contracting States or in neither of

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

which he is a national;

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

competent authorities of the Contracting States shall settle the question

by mutual agreement.

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

individual is a resident of both Contracting States, then it shall be deemed to be a

resident of the Contracting State in which its place of effective management is

situated.

ARTICLE 5

Permanent Establishment

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

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

wholly or partly carried on.

(2)

The term "permanent establishment" shall include especially

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(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) A building site or construction or installation project or supervisory

activities in connection therewith shall constitute a permanent establishment

provided that such site, project or activities last for more than twelve months.

(4) Notwithstanding the preceding provisions of this Article, the term

"permanent establishment" shall be deemed not to include -

(a) the use of facilities solely for the purpose of storage, display or delivery

of goods or merchandise, belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of

purchasing goods or merchandise, or for 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, if it has a preparatory

or auxiliary character;

(f) the maintenance of a fixed place of business solely for any combination

of activities mentioned in sub-paragraphs (a) to (e) of this paragraph,

provided that the overall activity of the fixed place of business resulting

from this combination is of a preparatory or auxiliary character.

(5) Notwithstanding the provisions of paragraphs (1) and (2), if 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 by virtue of that paragraph.

(6) 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, where

such persons are acting in the ordinary course of their business.

(7) The fact that a company which is 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 itself constitute either company a permanent

establishment of the other.

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CHAPTER III

Taxation of Income

ARTICLE 6

Income from Immovable Property

(1) Income from immovable property may be taxed in the Contracting State in

which such property is situated.

(2) The term "immovable property" shall be defined in accordance with the

taxation laws of the Contracting State in which the property in question is situated.

The term shall in any case include property accessory to immovable property, 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 professional services.

(5) Where the ownership of shares or other rights in a company or legal person

entitles the owner to the enjoyment of immovable property situated in a Contracting

State and held by that company or legal person, income derived by the owner from

the direct use, letting or use in any other form of his right or enjoyment may be taxed

in that State. The provisions of this paragraph shall apply notwithstanding the

provisions of Articles 7 and 14.

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 the determination of 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) Insofar as it has been customary in a Contracting State to determine the

profits to be attributed to a permanent establishment on the basis of an

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apportionment of the total profits of the enterprise to its various parts, nothing in

paragraph (2) shall preclude that Contracting State from determining the profits to be

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

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

principles embodied 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 from the operation of ships and aircraft in international traffic shall

be taxable only in the Contracting State in which the place of effective management

of the enterprise is situated.

(2) If the place of effective management of a shipping enterprise is aboard a

ship, then it shall be deemed to be situated in the Contracting State in which the

home harbour is situated, or if there is no such home harbour, in the Contracting

State of which the operator of the ship is a resident.

(3) The provisions of paragraph (1) shall also apply to profits derived from the

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

ARTICLE 9

Associated Enterprises

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 these

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.

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ARTICLE 10 *

Dividends

(1) Dividends paid by a company which is a resident of a Contracting State to a

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

(2) However, such dividends may be taxed in the Contracting State of which the

company paying the dividends is a resident, and according to the law of that State,

but -

(a) where the dividends are paid by a company resident of France to a

resident of Malta who is the beneficial owner thereof, the French tax so

charged shall not exceed 15 per cent of the gross amount of the

dividends. However, dividends paid by a company which is a resident of

France and beneficially owned by a company which is a resident of

Malta which holds directly at least 10 per cent of the capital of the

company paying the dividends shall be taxable only in Malta;

(b) where the dividends are paid by a company resident of Malta to a

resident of France who is the beneficial owner thereof -

(i) Malta tax shall not exceed that chargeable on the company paying

the dividends in respect of the profits so distributed;

(ii) notwithstanding the provisions of sub-paragraph (i) Malta tax

shall not exceed 15 per cent of the gross amount of the dividends

if such dividends are paid out of gains or profits earned in any

year in respect of receipt of tax benefits 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.

This paragraph shall not affect the taxation of the company in respect of the

profits out of which the dividends are paid.

(3) The term "dividends" as used in this Article means income from shares,

"jouissance" shares or "jouissance" rights, mining shares, founders shares or other

rights, not being debt-claims, participating in profits, as well as income treated as a

distribution by the taxation laws of the Contracting State of which the company

making the distribution is a resident.

(4) The provisions of paragraphs (1) and (2) shall not apply if the recipient 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

professional 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 a case the provisions of Article 7 or Article 14,

as the case may be, shall apply.

(5) (a) A resident of Malta who receives from a company which is a resident

of France dividends which, if received by a resident of France, would entitle such

resident to a fiscal credit (avoir fiscal), shall be entitled to a payment from the

French Treasury equal to such credit (avoir fiscal) subject to the deduction of the tax

provided for in sub-paragraph (a) of paragraph (2) of this Article.

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

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(b) The provisions of sub-paragraph (a) of this paragraph shall apply only to a

resident of Malta, being either -

(i) an individual; or

(ii) a company which does not control the company paying the dividends;

for the purposes of this sub-paragraph, a company shall be deemed to

control another company when, either alone or together with one or

more associated companies it controls directly or indirectly at least 10

per cent of the voting power of the other company, and two companies

shall be deemed to be associated if one is controlled directly or

indirectly by the other or both are controlled directly or indirectly by a

third company in the manner aforesaid.

(c) The provisions of sub-paragraph (a) of this paragraph shall not apply if the

recipient of the payment from the French Treasury provided for under sub-paragraph

(a) of this paragraph is not subject to Malta tax in respect of that payment.

(d) Payments from the French Treasury provided for under sub-paragraph (a) of

this paragraph shall be deemed to be dividends for the purposes of this Agreement.

(6) (a) Where the prepayment (precompte) is levied in respect of dividends

paid by a company which is a resident of France to a resident of Malta who is not

entitled to the payment from the French Treasury referred to in paragraph (1) of this

Article with respect to such dividends, that resident of Malta shall be entitled to the

refund of the prepayment, subject to the deduction of tax with respect to the

refunded amount in accordance with paragraph (2) of this Article.

(b) Amounts refunded under the provisions at sub-paragraph (a) of this

paragraph shall be deemed to be dividends for the purposes of this Agreement.

(7) Where a company resident of Malta has in France a permanent

establishment, the profits of this permanent establishment shall, after having borne

the French corporation tax, be liable to a tax the rate of which shall not exceed 10

per cent, according to the law of France.

(8) The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or the

assignment of the shares or other rights in respect of which the dividend is paid to

take advantage of this Article by means of that creation or assignment.

ARTICLE 11 *

Interest

(1) Interest arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

(2) However, such interest may be taxed in the Contracting State in which it

arises, and according to the law of that State, but if the recipient is the beneficial

owner of the interest, the tax so charged shall not exceed 5 per cent of the gross

amount of the interest.

(3) Notwithstanding the provisions of paragraph (2), any such interest as is

mentioned in paragraph (1) shall be taxable only in the Contracting State of which

the beneficiary is a resident, if such interest is payable on loans granted or

guaranteed by that State or a statutory body thereof.

(4)

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

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

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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 bonds or debentures. Penalty charges for late payment shall not be

regarded as interest for the purpose of this Article.

(5) The provisions of paragraphs (1) and (2) shall not apply if the recipient 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 professional 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 a

case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is

that State itself, a political subdivision, a local authority, a statutory body thereof or

a resident of that State. Where, however, the person paying the interest, whether he

is a resident of a Contracting State or not, has in a Contracting State a permanent

establishment in connection with which the indebtedness on which the interest is

paid was incurred, and such interest is borne by such permanent establishment, then

such interest shall be deemed to arise in the Contracting State in which the

permanent establishment is situated.

(7) Where, owing to a special relationship between the payer and the recipient

or between both of them and some other person, the amount of the interest paid,

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 recipient in the absence of such

relationship, the provisions of this Article shall apply only to the last-mentioned

amount. In that case, the excess part of the payment shall remain taxable according

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

this Agreement.

(8) The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or the

assignment of the debt-claim in respect of which the interest is paid to take

advantage of this Article by means of that creation or assignment.

ARTICLE 12 *

Royalties

(1) Royalties arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

(2) However, such royalties may be taxed in the Contracting State in which they

arise and according to the law of that State, but if the recipient is the beneficial

owner of the royalties, the tax so charged shall not exceed 10 per cent of the amount

of the royalties.

(3) Notwithstanding the provisions of paragraph (2), 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 works recorded for broadcasting or

television, shall be taxable only in the Contracting State of which the beneficiary is a

resident, if such resident is the beneficial owner of the payments.

(4)

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

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

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

literary, artistic or scientific work including cinematographic films and works

recorded for broadcasting or television, any patent, trade mark, design or model,

plan, secret formula or process or for information concerning industrial, commercial

or scientific experience.

(5) The provisions of paragraphs (1), (2) and (3) shall not apply if the recipient

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 professional 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 a case, the provisions of Article 7 or Article 14, as the case may

be, shall apply.

(6) Royalties shall be deemed to arise in a Contracting State when the payer is

that State itself, a political subdivision, a local authority, a statutory body thereof or

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

is a resident of a Contracting State or not, has in a Contracting State a permanent

establishment with which the right or property in respect of which the royalties are

paid is effectively connected, and such royalties are borne by such permanent

establishment, then such royalties shall be deemed to arise in the Contracting State

in which the permanent establishment is situated.

(7) Where, owing to a special relationship between the payer and the recipient

or between both of them and some other person, the amount of the royalties paid,

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 recipient in the

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

last-mentioned amount. In that case, the excess part of the payments shall remain

taxable according to the law of each Contracting State, due regard being had to the

other provisions of this Agreement.

(8) The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or the

assignment of the rights in respect of which the royalty is paid to take advantage of

this Article by means of that creation or assignment.

ARTICLE 13

Capital Gains

(1) Gains from the alienation of immovable property, as defined in paragraph

(2) of Article 6 or from the alienation of shares or comparable interest in a real

property cooperative or in a company the assets of which consist directly or through

one or more other companies or legal persons principally of immovable property,

may be taxed in the Contracting State in which such property is situated.

(2) Gains from the alienation of movable property forming part of the business

property of a permanent establishment which an enterprise of a Contracting State has

in the other Contracting State or of movable property pertaining to a fixed base

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

purpose of performing professional services, including such gains from the

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

enterprise) or of such a fixed base, may be taxed in the other State. However, gains

from the alienation of movable property pertaining to the operation of ships and

aircraft operated in international traffic shall be taxable only in the Contracting State

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

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(3) Gains from the alienation of shares forming part of a substantial interest in

the capital of a company which is a resident of a Contracting State may be taxed in

that State and according to the law of that State. For the purposes of this paragraph,

a substantial interest shall be deemed to exist when the alienator, alone or together

with associated or related persons, holds directly or indirectly shares which together

give right to 25 per cent or more of the company profits.

(4) Gains from the alienation of any property other than those mentioned in

paragraphs (1), (2) and (3), 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 independent activities of a similar character shall be

taxable only in that State. However, such income may be taxed in the other

Contracting State in the following circumstances

(a) if he has a fixed base regularly available to him in the other Contracting

State for the purpose of performing his activities (in which case only so

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

that other Contracting State); or

(b) if his stay in the other Contracting State is for a period or periods

amounting to or exceeding in the aggregate 183 days during any

calendar year.

(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

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 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 in

respect of an employment exercised aboard a ship or aircraft in international traffic

may be taxed in the Contracting State in which the place of effective management of

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the enterprise is situated.

ARTICLE 16

Directors’ Fees

Directors’ fees and similar payments derived by a resident of a Contracting State

in his capacity as a member of the board of directors or 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 Athletes

(1) Notwithstanding the provisions of Articles 14 and 15, income derived by

entertainers, such as theatre, motion picture, radio or television artistes, and

musicians, and by athletes, from their personal activities as such may be taxed in the

Contracting State in which these activities are exercised.

(2) Where income in respect of personal activities as such of an entertainer or

athlete accrues not to that entertainer or athlete 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 athlete are exercised.

(3) Notwithstanding the provisions of paragraph (1), remuneration or profits

and wages, salaries and other similar income derived by entertainers and athletes

from their personal activities as such in a Contracting State shall be taxable only in

the other Contracting State if their visit to the first Contracting State is supported

substantially from the public funds of that other Contracting State, one of its

political subdivisions or local authorities or of a statutory body thereof.

(4) Notwithstanding the provisions of paragraph (2), where income in respect of

personal activities as such of entertainers and athletes in a Contracting State accrues

not to that entertainer or athlete himself but to another person, notwithstanding the

provisions of Articles 7, 14 and 15, that income shall be taxable only in the other

Contracting State if this person is supported substantially from the public funds of

that other Contracting State, one of its political subdivisions or local authorities or of

a statutory body thereof, or if this person is a non-profit organisation of that other

State.

ARTICLE 18

Pensions

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

similar remuneration, and annuities paid to a resident of a Contracting State in

consideration of past employment shall be taxable only in that State.

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

payments made under the social security legislation of a Contracting State shall be

taxable only in that State.

(3)

As used in this Article -

(a) the term "pensions and other similar remuneration" means periodic

payments made after retirement in consideration of past employment, or

by way of compensation for injuries received in connection with past

employment;

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

(b) the term "annuity" means a stated sum paid periodically during life, or

during a specified or ascertained period of time, under an obligation to

make the payments in return for adequate and full consideration in

money or money’s worth.

ARTICLE 19

Government Service

(1) (a) Remuneration, other than a pension, paid by a Contracting State or a

political subdivision or a local authority thereof to any individual in respect of

services rendered to that State or subdivision or local authority thereof shall be

taxable only in that State.

(b) However, such remuneration shall be taxable only in the other Contracting

State if the services are rendered in that State and the recipient is a resident of that

other Contracting State who -

(i) is a national of that State; or

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

performing the services.

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

a political subdivision or a local authority thereof to any individual in respect of

services rendered to that State or subdivision or local authority thereof shall be

taxable only in that State.

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

the recipient is a national of and a resident of that State.

(3) The provisions of Articles 15, 16 and 18 shall apply to remuneration and

pensions in respect of services rendered in connection with any business carried on

by one of the Contracting States or a political subdivision or a local authority

thereof.

ARTICLE 20

Students

(1) Payments which a student or business apprentice who is or was immediately

before visiting a Contracting State a resident of the other Contracting State and who

is present in the first-mentioned Contracting State solely for the purpose of his

education or training receives for the purpose of his maintenance, education or

training shall not be taxed in that State, provided that such payments are made to him

from sources outside that State.

(2) Remuneration which a student or business apprentice who is or was

immediately before visiting a Contracting State a resident of the other Contracting

State and who is present in the first-mentioned Contracting State solely for the

purpose of his education or training derives from services rendered in that State shall

not be taxed in that State provided that such services are in connection with his

education or training or that the remuneration of such services is necessary to

supplement the resources available to him for the purpose of his maintenance.

ARTICLE 21

Teachers and Researchers

(1)

A teacher or researcher who is or was immediately before visiting a

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WITH THE REPUBLIC OF FRANCE

Contracting State a resident of the other Contracting State, and who is present in the

first-mentioned Contracting State for the purpose of teaching or engaging in research

shall be exempt from tax in that State for a period not exceeding two years on

remuneration in respect of such activities.

(2) This Article shall not apply to income from research if such research is

undertaken not in the public interest but primarily for the private benefit of a specific

person or persons.

ARTICLE 22 *

Other Income

(1) Items of income beneficially owned by 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 if such resident is subject to tax in respect of those items of

income in that State. If that requirement is not met, those items of income shall

remain taxable in the other Contracting State and according to the laws of that other

State.

(2) The provisions of paragraph (1) shall not apply if the recipient of the

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 professional 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 a case the provisions of Article 7 or

Article 14, as the case may be, shall apply.

(3) The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or the

assignment of the rights in respect of which the income is paid to take advantage of

this Article by means of that creation or assignment.

CHAPTER IV

Taxation of Capital

ARTICLE 23

Capital

(1) Capital represented by immovable property, as defined in paragraph (2) of

Article 6, may be taxed in the Contracting State in which such property is situated.

Capital represented by shares or other rights in a company or legal person the assets

of which consist principally, directly or through one or more other companies or

legal person, of immovable property situated in a Contracting State or of rights

connected with such immovable property may be taxed in that State.

(2) Capital represented by movable property forming part of the business

property of a permanent establishment of an enterprise, or by movable property

pertaining to a fixed base used for the performance of professional services may be

taxed in the Contracting State in which the permanent establishment or fixed base is

situated.

(3) Ships and aircraft operated in international traffic and movable property

pertaining to the operation of such ships and aircraft shall be taxable only in the

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

Contracting State in which the place of effective management of the enterprise is

situated.

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

taxable only in that State.

CHAPTER V

Elimination of Double Taxation

ARTICLE 24 *

Elimination of Double Taxation

(1) In the case of France, double taxation shall be avoided in the following

manner

(a) Income arising in Malta, which may be taxed or shall be taxable only in that

State in accordance with the provisions of this Agreement, shall be taken into

account for the computation of the French tax where the beneficiary of such income

is a resident of France and where such income is not exempted from corporation tax

according to French domestic law. In that case, the Malta tax shall not be deductible

from such income, but the beneficiary shall be entitled to a tax credit against French

tax. Such tax credit shall be equal -

(i)

in the case of income which, according to the provisions of the

Agreement, shall be taxable only in Malta, to the amount of French tax

attributable to such income;

(ii) in the case of income which, according to the provisions of the

Agreement, may be taxed in Malta, to the amount of tax paid in Malta in

accordance with the provisions of the Agreement; however, such tax

credit shall not exceed the amount of French tax attributable to such

income.

(b) A resident of France who owns capital which may be taxed in Malta

according to the provisions of the Agreement may also be taxed in France in respect

of such capital. The French tax shall be computed by allowing a tax credit equal to

the amount of the tax paid in Malta on such capital. However, such tax credit shall

not exceed the amount of the French tax attributable to such capital.

(c) It is understood that the term ''amount of French tax attributable to such

income'' as used in sub-paragraph (a) means -

(i)

where the tax on such income is computed by applying a proportional

rate, the amount of the net income concerned multiplied by the rate

which actually applies to that income;

(ii) where the tax on such income is computed by applying a progressive

scale, the amount of the net income concerned multiplied by the rate

resulting from the ratio of the tax actually payable on the total net

income taxable in accordance with French law to the amount of that

total net income.

This interpretation shall apply by analogy to the term ''amount of French tax

attributable to such capital'' as used in sub-paragraph (b).

(d)

(i)

It is understood that the term ''amount of tax paid in Malta'' as used in

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

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WITH THE REPUBLIC OF FRANCE

sub-paragraphs (a) and (b) means the amount of Malta tax effectively and

definitively borne in respect of the income or the items of capital in question, in

accordance with the provisions of the Agreement, by the beneficiary or owner

thereof who is a resident of France.

(ii) Notwithstanding the provisions of sub-paragraph (i), in the case of

income referred to in Articles 10, 11 and 12, arising in Malta and paid to a

beneficiary who is a resident of France by a person to whom the Agreement applies,

Malta tax shall be deemed to have been paid as follows

(aa) on dividends, at the rate of 15 per cent as provided in paragraph

2(b)(ii) of Article 10;

(bb) on interest, at the rate of 5 per cent as provided in paragraph (2) of

Article 11; and

(cc) on royalties, other than those referred to in paragraph (3) of

Article 12, at the rate of 10 per cent as provided in paragraph (2)

of the said Article.

Relief from French tax by virtue of this sub-paragraph (ii) shall be given for

a period of ten years only, beginning with the date on which the Protocol for the 8th

of July, 1994, entered into force. This period may, however, be extended by

agreement between the Contracting States.

(2)

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

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

against Malta tax in respect of foreign tax, where, in accordance with the provisions

of this Agreement, there is included in a Malta assessment income from sources

within France, or elements of capital situated in France, the French tax on such

income or elements of capital, as the case may be, shall be allowed as a credit

against the relative Malta tax payable thereon.

(3) Where the Agreement provides that income arising in a Contracting State

shall be relieved from tax in that State, either in full or in part, and, under the law in

force in the other Contracting State, such income is subject to tax by reference to the

amount thereof which is remitted to or received in that other State and not by

reference to the full amount thereof, then the relief to be allowed in the first-

mentioned State shall apply only to so much of the income as is remitted to or

received in the other State.

CHAPTER VI

Special Provisions

ARTICLE 25

Non-Discrimination

(1) The nationals of the Contracting State, whether or not they are residents of

one of the Contracting States, shall not be subjected in the 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 are or may be subjected. It is understood that an

individual, legal person, partnership or association who is a resident of a Contracting

State is not placed in the same circumstances as an individual, legal person,

partnership or association who is not a resident of that State, even if, in the case of

legal persons, partnerships or associations, those entities are considered, under sub-

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

paragraph (f) of paragraph (1) of Article 3, as nationals of the Contracting State of

which they are residents.

(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 Article 9, paragraph (7) of Article 11, or

paragraph (7) 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 condition as if they had been paid to a resident of the first-mentioned

State.

Similarly, any debts of an enterprise of a Contracting State to a resident of the

other Contracting State shall, for the purpose of determining the taxable capital of

such enterprise, be deductible as if they had been contracted to a resident of the first-

mentioned State.

(4) Enterprises of a Contracting State, the capital of which is wholly or partly

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

Contracting State, shall not be subjected in the first-mentioned Contracting 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 that first-mentioned State are or may be subjected.

(5) In this Article, the term "taxation" means taxes of every kind and

description.

ARTICLE 26

Mutual Agreement Procedure

(1) Where a resident of a Contracting State considers that the actions of one or

both of the Contracting States result or will result for him in taxation not in

accordance with this Agreement, he may, notwithstanding the remedies provided by

the national laws of those States, present his case to the competent authority of the

Contracting State of which he is resident or, if his case comes under paragraph (1) of

Article 25, to that of the Contracting State of which he is a national. This case must

be presented within three years of the first notification of the action giving rise to

taxation not in accordance wish 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 an appropriate solution, to resolve the

case by mutual agreement with the competent authority of the other Contracting

State, with a view to the avoidance of double taxation not in accordance with the

Agreement; any agreement reached shall be implemented notwithstanding any time

limits in the national laws of the Contracting State.

(3) The competent authorities of the Contracting States shall endeavour to

resolve by mutual agreement any difficulties arising as to the application of the

Agreement.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

In particular, the competent authorities of the Contracting States may consult

together to endeavour to agree -

(a) to the same attribution in both Contracting States of the profits

attributable to a permanent establishment situated in a Contracting State

of an enterprise of the other Contracting State;

(b) to the same allocation of income between a resident of a Contracting

State and any associated person referred to in Article 9.

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

preceding paragraphs. When it seems advisable in order to reach agreement to have

an oral exchange of opinions, such exchange may take place through a Commission

consisting of representatives of the competent authorities of the Contracting State.

(5) The competent authorities of the Contracting States may by mutual

agreement settle the mode of application of this Agreement and, especially, the

requirements to which the residents of a Contracting State shall be subjected in order

to obtain the tax reliefs or exemptions provided for by this Agreement.

ARTICLE 27 *

Exchange of Information

(1) The competent authorities of the Contracting States shall exchange such

information as is forseeably relevant for carrying out the provisions of this

Agreement or to the administration or enforcement of the domestic laws concerning

taxes of every kind and description imposed on behalf of the Contracting States, or

of their political subdivisions or territorial authorities, 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 Contracting State shall be

treated as secret in the same manner as information obtained under the domestic

laws of that State and shall be disclosed only to persons or authorities (including

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

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

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

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

information in public court proceeding or in judicial decisions.

It is hereby declared -

(a) that the arrangements specified in the Agreement set in

the Schedule to this Order have been made with the

Government of the Republic of France with a view to

affording relief from double taxation and preventing

fiscal evasion in relation to the following taxes

imposed by the laws of the Republic of France

(i) the income tax;

(ii) the corporation tax; including any withholding

tax, prepayment (precompte) or advanced

payment with respect to the aforesaid taxes;

(b) that it is expedient that those arrangements should

have effect.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

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

impose on a Contracting State the obligation

a)

to carry out administrative measures at variance with the laws and

administrative practice of that or 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

*as substituted by Protocol reproduced in Legal Notice 329 of 2010.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

(ordre public).

If information is requested by a Contracting State in accordance with this

Article, the other Contracting State shall use its information gathering measures to

obtain the requested information, even though that other State may not need such

information for its own tax purposes. The obligation contained in the preceding

sentence is subject to the limitations of paragraph 3 but in no case shall such

limitations be construed to permit a Contracting State to decline to supply

information solely because it has no domestic interest in such information.

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

Contracting State to decline to supply information solely because the information is

held by a bank, other financial institution, nominee or person acting in an agency or

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

ARTICLE 28

Diplomatic and Consular Officials

(1) Nothing in this Agreement shall affect the fiscal privileges of members of

diplomatic missions and their personal domestics, of members of consular missions,

or of members of permanent missions to international organisations under the

general rules of international law or under the provisions of special agreements.

(2) Notwithstanding the provisions of Article 4, an individual who is a member

of a diplomatic or consular or permanent mission of a Contracting State which is

situated in the other Contracting State or in a third State shall be deemed for the

purposes of this Agreement to be a resident of the sending State if -

(a) in accordance with international law, he is not taxable in the receiving

State on income from sources outside that State; and

(b) he is liable in the sending State to the same obligations in relation to tax

on his total world income as are residents of that sending State.

(3) This Agreement shall not apply to international organisations, to organs and

officials thereof and to persons who are members of a diplomatic or consular or

permanent mission of a third State, being preset in a Contracting State and not

treated in either Contracting State as residents in respect of taxes on income and

capital.

ARTICLE 29

Territorial Extension

(1) This Agreement may be extended, either in its entirety or with any necessary

modifications, to the overseas territories of the French Republic which imposes taxes

substantially similar in character to those to which the Agreement applies. Any such

extension shall take effect from such date and subject to such modifications and

conditions, including conditions as to termination, as may be specified and agreed

between the Contracting States in notes to be exchanged through diplomatic

channels or in any other manner in accordance with their constitutional procedures.

(2) Unless otherwise agreed by both Contracting States, the termination of the

Agreement by one of them under Article 31 shall also terminate, in the manner

provided for in that Article, the application of the Agreement to any territory to

which it has been extended under this Article.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

CHAPTER VII

Final Provisions

ARTICLE 30

Entry into Force

(1) Each Contracting State shall notify to the other the completion of the

procedure required by its law for the bringing into force of this Agreement. This

Agreement shall enter into force on the first day of the second month following the

month in which the later of these notifications has been given.

(2)

Its provisions shall apply for the first time -

(a) as regards taxes withheld at source, to amounts payable on or after the

date of entry into force of this Agreement;

(b) as regards other taxes on income, to income derived during the calendar

year in which the Agreement entered into force, or relating to the

accounting period ending during this year.

ARTICLE 31

Termination

(1) This Agreement shall remain in force indefinitely. However, after 1981,

each Contracting State may terminate the Agreement by giving at least six months

written notice through diplomatic channels.

(2)

In such an event, its provisions shall apply for the last time -

(a) as regards taxes withheld at source, the sums payable before or on the

31st December of the calendar year during which the termination has

been notified;

(b) as regards other taxes on income, to income derived during the calendar

year during which the termination has been notified or relating to the

accounting period ending during such year.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed

this Agreement.

DONE at Valletta this twenty fifth day of July 1977, in duplicate, in the French

and English languages, both texts being equally authentic.

For the Government of the

For the Government of the

French Republic

Republic of Malta

SERGE GELADE

JOSEPH ABELA

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

PROTOCOL *

At the time of signature of the Agreement between the Government of the

Republic of Malta and the Government of the French Republic 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.

I.

In respect of Article 5, an insurance enterprise of a Contracting State shall

be deemed to have a permanent establishment in the other Contracting State if it

collects premiums and insures risks therein.

II.

In respect of paragraphs (1) and (2) of Article 7, where an enterprise of a

Contracting State sells goods or merchandise or carries on business in the other

Contracting State through a permanent establishment situated therein, the profits of

this permanent establishment are not determined on the basis of the total amount

received by the enterprise, but are determined only on the basis of the remuneration

which is attributable to the actual activity of the permanent establishment for such

sales or business. In the case of contracts for the survey, supply, installation or

construction of industrial, commercial or scientific equipment or premises, or of

public works, when the enterprise has a permanent establishment the profits of such

permanent establishment are not determined on the basis of the total amount of the

contract, but are determined only on the basis of that part of the contract which is

effectively carried out by the permanent establishment in the Contracting State

where the permanent establishment is situated. The profits related to that part of the

contract which is carried out by the head office of the enterprise shall be taxable only

in the Contracting State of which the enterprise is a resident.

III. In respect of paragraph (1) of Article 7, payments of any kind received as a

consideration for the use of, or the right to use, industrial, commercial or scientific

equipment shall be deemed to be profits of an enterprise to which the provisions of

Article 7 apply. Similarly, payments received as a consideration for studies or

surveys of a scientific, geological or technical nature, or for consultant or

supervisory services shall be deemed to be payments to which the provisions of

Article 7 apply.

IV.

In respect of Article 8

(a) where profits derived from the operation of a ship in international

traffic by an enterprise whose place of effective management is situated

in Malta are exempt from tax under the provisions of article 86 of the

Merchant Shipping Act, or under any identical or similar provisions,

such profits may be taxed in France unless it is proved to the

satisfaction of the competent authority of France that not more than 25

per cent of the capital of the company owning the relative ship is

controlled, directly or indirectly, by persons not residents of Malta;

(b) where a person who is a resident of France participates directly or

indirectly in the management, control or capital of such an enterprise,

such person shall be taxable in France in respect of that part of the

profits, derived by such enterprise and exempt from tax in Malta as

aforesaid, which is appropriate to the participating of such person in the

enterprise.

V.

In respect of Articles 11 and 12, where any interest or royalties derived from

Malta are received by a resident of France, tax in Malta is charged on the amount of

the interest or royalties as reduced by all expenses properly attributable thereto. If

*as amended by Protocol reproduced in Legal Notice 329 of 2010.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

the tax so charged is in excess of 10 per cent of the gross amount of the interests or

royalties (that is before the deduction of the aforesaid expense), the tax is reduced so

as not to exceed 10 per cent of the gross interests or royalties.

VI.

In respect of Article 25

(a) Nothing in paragraph (1) shall be construed as preventing France from

granting only to persons possessing French nationality the benefit of the exemption

of the gains derived from the alienation of immovable property or parts of

immovable property constituting the residence in France of French persons who are

not residents of France, as provided in Article 6 - 11 of the law no. 76.660 of July 19,

1976; and

(b) Nothing in paragraph (3) shall be construed as preventing France from

applying the provision of Article 212 of the "Code General des Impots" as regards

interest paid by a French Company to a foreign mother Company.

VII Where, under any provision of the Agreement, income or gains is or are

wholly or partly relieved from tax in a State and, under the laws in force in the other

State, an individual, in respect of the said income or gains, is subject to tax by

reference to the amount thereof which is remitted to or received in that other State,

and not by reference to the full amount thereof, then the relief to be allowed under

this Agreement in the first-mentioned State shall apply only to so much of the

income or gains as is remitted to or received in that other State.

VIII. (a) The provisions of the Agreement and of this Protocol - other than the

provisions of this paragraph - shall not apply to persons entitled to any special tax

benefit under

(i)

a law of either one of the Contracting States which has been identified

in an exchange of letters between the Contracting States; or

(ii) any substantially similar law subsequently enacted.

(b)

Without prejudice to the provisions of sub-paragraph (a), the provisions of

the Agreement and of this Protocol - other than the provisions of this paragraph -

shall not apply to

(i) dividends paid by persons referred to in sub-paragraph (a); and

(ii) other items of income derived from persons referred to in sub-paragraph

(a) by associated enterprises as defined in sub-paragraph (a) of (b) of

Article 9; and

(iii) shares or rights in persons referred to in sub-paragraph (a).

IN WITNESS WHEREOF the undersigned have signed the present Protocol which

shall have the same force and validity as if it were inserted word by word in the

Agreement.

DONE at Valletta this twenty fifth day of July 1977, in duplicate, in the French

and English languages, both texts being equally authentic.

For the Government of the

For the Government of the

French Republic

Republic of Malta

SERGE GELADE

JOSEPH ABELA

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

Legal Notice 329 of 2010

PROTOCOL

AMENDING THE AGREEMENT BETWEEN

THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF THE FRENCH REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME AND ON CAPITAL SIGNED

IN VALLETTA ON 25TH JULY 1977 AND AMENDED BY THE

PROTOCOL SIGNED IN VALLETTA ON 8TH JULY 1994

AND EXCHANGE OF LETTERS OF 8TH JULY 1994

The Government of Malta

and

The Government of the French Republic,

desiring to amend the Agreement between the Government of the Republic of

Malta and the Government of the French Republic for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and

on Capital, signed on 25th July 1977 and amended on 8th July 1994 (hereinafter

referred to as "the Agreement"),

have agreed as follows

Article 1

Article 2 of the Agreement is amended as follows

1. A subparagraph 3 a) iv) worded "the tax on salaries ("la taxe sur les

salaires");" is added.

2. A subparagraph 3 a) v) worded as follows is added

"(v) widespread social security contributions (contributions sociales

généralisées) and contributions for the reimbursement of the social debt

(contributions pour le remboursement de la dette sociale);".

3. In subparagraph 3 b), the words “and surtax including prepayments of tax

whether made by deduction at source or otherwise” are deleted.

Article 2

Article 10 of the Agreement is amended as follows

1. The subparagraph 2 a) is deleted and replaced by the following

subparagraph

"2.a) Where the dividends are paid by a company resident of France to

a resident of Malta who is the beneficial owner thereof, the

French tax so charged shall not exceed 15 per cent of the gross

amount of the dividends. However, dividends paid by a company

which is a resident of France and beneficially owned by a

company which is a resident of Malta which holds directly at least

10 per cent of the capital of the company paying the dividends

shall be taxable only in Malta.".

2. In paragraph 3, the words "income from other corporate rights which is

subjected to the same taxation treatment as income from shares by the taxation law

of the State of which the company making the distribution is a resident" are deleted

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

and replaced by the following words "income treated as a distribution by the taxation

laws of the Contracting State of which the company making the distribution is a

3. In subparagraph 5 a), the words "sub-paragraph (a)(ii)" shall be replaced by

the words "sub-paragraph (a)".

4. A new paragraph worded as follows is added

"8. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation

or the assignment of the shares or other rights in respect of which the

dividend is paid to take advantage of this Article by means of that

creation or assignment.".

Article 3

Article 11 of the Agreement is amended as follows

1. In paragraph 2, "10 per cent" is replaced by "5 per cent".

2. A new paragraph worded as follows is added

"8. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation

or the assignment of the debt-claim in respect of which the interest is

paid to take advantage of this Article by means of that creation or

assignment.".

Article 4

In Article 12 of the Agreement, a new paragraph worded as follows is added

"8. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation

or the assignment of the rights in respect of which the royalty is paid to

take advantage of this Article by means of that creation or assignment.".

Article 5

Article 22 of the Agreement is amended as follows

1. Paragraph 1 is deleted and replaced by the following paragraph

"1. Items of income beneficially owned by 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 if such resident is subject

to tax in respect of those items of income in that State. If that

requirement is not met, those items of income shall remain taxable in

the other Contracting State and according to the laws of that other

State.".

2. A new paragraph worded as follows is added

"3. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation

or the assignment of the rights in respect of which the income is paid to

take advantage of this Article by means of that creation or assignment.".

Article 6

In subparagraph 1 d) ii) bb) of Article 24 of the Agreement, "10%" is replaced by

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

Article 7

The provisions of Article 27 of the Agreement are deleted and replaced by the

following provisions

"1. The competent authorities of the Contracting States shall exchange such

information as is forseeably relevant for carrying out the provisions of

this Agreement or to the administration or enforcement of the domestic

laws concerning taxes of every kind and description imposed on behalf

of the Contracting States, or of their political subdivisions or territorial

authorities, 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 Contracting State

shall be treated as secret in the same manner as information obtained

under the domestic laws of that State and shall be disclosed only to

persons or authorities (including courts and administrative bodies)

concerned with the assessment or collection of, the enforcement or

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

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

persons or authorities shall use information only for such purposes.

They may disclose the information in public court proceeding or in

judicial decisions.

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

to impose on a Contracting State the obligation

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

administrative practice of that or the other Contracting State;

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

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

Contracting State;

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

industrial, commercial or professional secret or trade process, or

information the disclosure of which would be contrary to public

policy (ordre public).

4. If information is requested by a Contracting State in accordance with

this Article, the other Contracting State shall use its information

gathering measures to obtain the requested information, even though

that other State may not need such information for its own tax purposes.

The obligation contained in the preceding sentence is subject to the

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

construed to permit a Contracting State to decline to supply information

solely because it has no domestic interest in such information.

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

Contracting State to decline to supply information solely because the

information is held by a bank, other financial institution, nominee or

person acting in an agency or fiduciary capacity or because it relates to

ownership interests in a person.".

Article 8

The Protocol of the Agreement is amended as follows

1. Paragraph V is deleted and paragraphs VI and VII shall be renumbered as

paragraphs V and VI respectively.

2. A new paragraph worded as follows is added

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF FRANCE

"VII. Where, under any provision of the Agreement, income or gains is or are

wholly or partly relieved from tax in a State and, under the laws in force

in the other State, an individual, in respect of the said income or gains,

is subject to tax by reference to the amount thereof which is remitted to

or received in that other State, and not by reference to the full amount

thereof, then the relief to be allowed under this Agreement in the first-

mentioned State shall apply only to so much of the income or gains as is

remitted to or received in that other State.".

Article 9

1. Each of the Contracting States shall notify to the other the completion of the

procedures required as far as it is concerned for the bringing into force of this

Protocol. This Protocol shall enter into force on the first day of the second month

following the day when the latter of these notifications has been received.

2. The provisions of the Protocol shall apply for the first time

in respect of taxes withheld at source, to amounts taxable on or after the

date of entry into force of the Protocol;

in respect of taxes on income which are not withheld at source, to

income relating to the calendar year or accounting period, as the case

may be, during which the Protocol enters into force * ;

in respect of the other taxes, to taxation the taxable event of which will

occur on or after the date of entry into force of the Protocol.

3. The provisions of the Protocol shall remain in force as long as the

Agreement shall remain in force.

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

Done at Valletta, this 29th day of August, 2008, in duplicate, in the English and

French languages, both texts being equally authentic.

Tonio Fenech

Eric Woerth

For the Government of Malta

For the Government of French Republic

*1st June 2010 - see Legal Notice 329 of 2010.