DOUBLE TAXATION RELIEF (TAXES ON INCOME) (RUSSIAN FEDERATION) ORDER (federazzjonirussa)

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(RUSSIAN FEDERATION)

SUBSIDIARY LEGISLATION 123.146

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(RUSSIAN FEDERATION) ORDER

18th June, 2013

LEGAL NOTICE 159 of 2013, amended by Legal Notice 428 of 2020.

This title of this order is the Double Taxation Relief (Taxes

on Income) (Russian Federation) Order.

(Article 2)

CONVENTION

BETWEEN

THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF THE RUSSIAN FEDERATION

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of Malta and the Government of the Russian Federation desiring

to conclude a Convention 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 Convention shall apply to persons who are residents of one or both of the

Contracting States.

Article 2

TAXES COVERED

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

Contracting State or of its political subdivisions or local authorities, irrespective of

the manner in which they are levied.

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

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

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

paid by enterprises.

It is hereby declared

(a) that the arrangements specified in the Convention set

out in the Schedule to this Order (hereinafter referred

to as "the Convention") have been made with the

Government of the Russian Federation with a view to

affording relief from double taxation in relation to the

following taxes imposed by the laws of the Russian

Federation

(i) the tax on profits of organisations;

(ii) the tax on income of individuals;

(b) that it is expedient that those arrangements should

have effect following the entry into force of the

Convention and in accordance with the relevant

provisions of the Convention;

(c) that the Convention shall enter into force on such date

as may be announced by notice in the Government

Gazette. *

* 22nd May, 2014 - see Legal Notice 150 of 2014.

The existing taxes to which this Convention shall apply are in particular

(a) in Malta

the income tax;

(hereinafter referred to as "Malta tax");

(b) in Russia

(i) the tax on profits of organisations;

(ii) the tax on income of individuals;

(hereinafter referred to as " Russian tax").

The Convention shall apply also to any identical or substantially similar

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

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

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

taxation laws.

Article 3

GENERAL DEFINITIONS

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

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

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

the other islands of the Maltese archipelago including the territorial

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

superjacent water column adjacent to the territorial waters, wherein

Malta exercises sovereign rights, jurisdiction, or control in accordance

with international law and its national law, including its legislation

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

natural resources;

(b) the term "Russia" means the Russian Federation; when used in

geographical sense, means all the territory of the Russian Federation

and also its exclusive economic zone and continental shelf, defined

according to the UN Convention on the law of the seas (1982);

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

Malta or Russia, as the context requires;

(d) the term "person" includes an individual, a company and any other body

of persons;

(e) the term "company" means any body corporate or any entity that is

treated as a body corporate for tax purposes;

(f)

the terms "enterprise of a Contracting State" and "enterprise of the other

Contracting State" mean respectively an enterprise carried on by a

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

of the other Contracting State;

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

operated by an enterprise of a Contracting State, except when the ship

or aircraft is operated solely between places in the other Contracting

State;

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

and of other activities of an independent character;

(i)

the term "competent authority" means

(i)

in Malta: the Minister responsible for finance or his authorised

representative; and

(ii) in Russia: the Ministry of Finance of the Russian Federation or its

authorised representative;

(j)

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

(i)

any individual possessing the nationality of a Contracting State;

and

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

such from the laws in force in a Contracting State.

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

State, any term not defined therein shall, unless the context otherwise requires, have

the meaning that it has at that time under the law of that State for the purposes of the

taxes to which the Convention applies, any meaning under the applicable tax laws of

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

Article 4

RESIDENT

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

State" means any person who, under the laws of that State, is liable to tax therein by

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

any other criterion of a similar nature, and also includes that State and any political

subdivision or local authority thereof. This term, however, does not include any

person who is liable to tax in that State in respect only of income from sources in

that State.

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

of both Contracting States, then his status shall be determined as follows

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

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

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

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

of vital interests);

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

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

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

has an habitual abode;

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

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

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

authorities of the Contracting States shall settle the question by mutual

agreement.

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

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

resident only of the State in which its place of effective management is situated.

Where the place of effective management of a person other than an individual cannot

be determined, the competent authorities of the Contracting States shall endeavour,

having regard to all factors they consider relevant, to determine by mutual agreement

the place of effective management in each individual case.

Article 5

PERMANENT ESTABLISHMENT

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

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

wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop; 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 twelve months.

4. Where an enterprise of a Contracting State performs services in the other

Contracting State

(a) through an individual who is present in that other State for a period or

periods exceeding in the aggregate 183 days in any twelve month

period, and more than 50 % of the gross revenues attributable to active

business activities of the enterprise during this period or periods are

derived from the services performed in that other State through that

individual, or

(b) for a period or periods exceeding in the aggregate 183 days in any

twelve month period, and these services are performed for the same

project or for connected projects through one or more individuals who

are present and performing such services in that other State,

the activities carried on in that other State in performing these services shall be

deemed to be carried on through a permanent establishment of the enterprise situated

in that other State, unless these services are limited to those mentioned in paragraph

5 which, if performed through a fixed place of business, would not make this fixed

place of business a permanent establishment under the provisions of that paragraph.

Notwithstanding the preceding provisions of this Article, the term

"permanent establishment" shall be deemed not to include

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

of goods or merchandise belonging to the enterprise;

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

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

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

enterprise solely for the purpose of processing by another enterprise;

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

purchasing goods or merchandise or of collecting information, for the

enterprise;

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

carrying on, for the enterprise, any other activity of a preparatory or

auxiliary character;

(f)

the maintenance of a fixed place of business solely for any combination

of activities mentioned in sub-paragraphs a) to e), provided that the

overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

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

other than an agent of an independent status to whom paragraph 7 applies - is acting

in a Contracting State on behalf of an enterprise of the other Contracting State, and

has, and habitually exercises, in that 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 Contracting 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 5 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 of a Contracting State shall not be deemed to have a

permanent establishment in the other Contracting State merely because it carries on

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

agent of an independent status, provided that such persons are acting in the ordinary

course of their business.

The fact that a company which is a resident of a Contracting State controls

or is controlled by a company which is a resident of the other Contracting State, or

which carries on business in that other State (whether through a permanent

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

permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

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

property (including income from agriculture or forestry) situated in the other

Contracting State may be taxed in that other State.

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

the law of the Contracting State in which the property in question is situated. The

term shall in any case include property accessory to immovable property, livestock

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

general law respecting landed property apply, usufruct of immovable property and

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

to work, mineral deposits, sources and other natural resources; ships and aircraft

shall not be regarded as immovable property.

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

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

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

immovable property of an enterprise.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only in

that State unless the enterprise carries on business in the other Contracting State

through a permanent establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be taxed in the other State but

only so much of them as is attributable to that permanent establishment.

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

Contracting State carries on business in the other Contracting State through a

permanent establishment situated therein, there shall in each Contracting State be

attributed to that permanent establishment the profits which it might be expected to

make if it were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.

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

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

permanent establishment, including executive and general administrative expenses

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

elsewhere.

4. Insofar as it has been customary in a Contracting State to determine the

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

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

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

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

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

principles contained in this Article.

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

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

enterprise.

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

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

unless there is good and sufficient reason to the contrary.

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

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

affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

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

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

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

or aircraft in international traffic include profits derived from the rental of ships or

aircraft if such ships or aircraft are operated in international traffic or if such rental

profits are incidental to other profits described in paragraph 1 of this Article.

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 Contracting State participates directly or indirectly in

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

Contracting State, or

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

control or capital of an enterprise of a Contracting State and an

enterprise of the other Contracting State,

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

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

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

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

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

accordingly.

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

State - and taxes accordingly - profits on which an enterprise of the other

Contracting State has been charged to tax in that other State and the profits so

included are profits which would have accrued to the enterprise of the first-

mentioned State if the conditions made between the two enterprises had been those

which would have been made between independent enterprises, then that other State

shall make an appropriate adjustment to the amount of the tax charged therein on

those profits. In determining such adjustment, due regard shall be had to the other

provisions of this Convention and the competent authorities of the Contracting

States shall if necessary consult each other.

Article 10

Amended by

L.N. 428 of 2020.

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 also be taxed in the Contracting State of which

the company paying the dividends is a resident and according to the laws of that

Contracting State, but if the beneficial owner of those dividends is a resident of the other

Contracting State, the tax so charged shall not exceed fifteen per cent (15%) of the gross

amount of the dividends.

3. Notwithstanding the provisions of paragraphs 1 and 2, dividends paid by a

company which is a resident of a Contracting State may also be taxed in that

Contracting State according to the laws of that Contracting State, but

i.

if the beneficial owner of the dividends is a resident of the other

Contracting State and the beneficial owner is an insurance

undertaking or a pension fund; or

ii.

if the beneficial owner of the dividends is a resident of the other

Contracting State and the beneficial owner is a company whose

shares are listed on a registered stock exchange provided that no

less than fifteen per cent (15%) of voting shares of that company

are in free float and which holds directly at least fifteen per cent

(15%) of the capital of the company paying the dividends

throughout a three-hundred and sixty-five (365) day period that

includes the day of payment of the dividends; or

iii.

if the beneficial owner of the dividends is a resident of the other

Contracting State and the beneficial owner is the Government of

that Contracting State or a political subdivision or a local

authority thereof; or

iv.

if the beneficial owner of the dividends is a resident of the other

Contracting State and the beneficial owner is the Central Bank of

that Contracting State,

the tax so charged shall not exceed five per cent (5%).

4. The term "dividends" as used in this Article means income from shares or

other rights, not being debt-claims, participating in profits, as well as income from

other corporate rights which is subjected to the same taxation treatment as income

from shares, as well as income -even paid in the form of interest- which is subjected

to the same taxation treatment as income from shares by the tax legislation of the

State of which the paying company is a resident. This term also means any payments

on units of the mutual investment funds or similar collective investment vehicles or

schemes.

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

owner of the dividends, being a resident of a Contracting State, carries on business

in the other Contracting State of which the company paying the dividends is a

resident, through a permanent establishment situated therein and the holding in

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

establishment. In such case the provisions of Article 7 shall apply.

6. Where a company which is a resident of a Contracting State derives profits

or income from the other Contracting State, that other State may not impose any tax

on the dividends paid by the company, except insofar as such dividends are paid to a

resident of that other State or insofar as the holding in respect of which the dividends

are paid is effectively connected with a permanent establishment situated in that

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

undistributed profits, even if the dividends paid or the undistributed profits consist

wholly or partly of profits or income arising in such other State.

7. Reduced tax rates provided for in the paragraphs 2 and 3 of this Article shall

not apply to dividends arising in a Contracting State and paid to the permanent

establishment of an enterprise of the other Contracting State, situated in the third

State.

8. The provision 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 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

Amended by

INTEREST

L.N. 428 of 2020

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

Contracting State, who is the beneficial owner of such interest, may be taxed in that

other State.

2. However, such interest may also be taxed in the Contracting State in which it

arises and according to the laws of that Contracting State, but if the beneficial owner of

the interest is a resident of the other Contracting State, the tax so charged shall not

exceed fifteen per cent (15%) of the gross amount of the interest.

3. Notwithstanding the provisions of paragraphs 1 and 2, interest arising in a

Contracting State and paid to a resident of the other Contracting State, who is the

beneficial owner of the interest, may also be taxed in the Contracting State in which

it arises and according to the laws of that Contracting State, but if

A)

the beneficial owner is

i.

an insurance undertaking or a pension fund; or

ii.

the Government of that Contracting State or a political

subdivision or a local authority thereof; or

iii.

the Central Bank of that Contracting State; or

iv.

a bank; or

v.

a company whose shares are listed on a registered stock exchange

provided that no less than fifteen per cent (15%) of voting shares

of that company are in free float and which holds directly at least

fifteen per cent (15%) of the capital of the company paying the

interest throughout a three-hundred and sixty-five (365) day

period that includes the day of payment of the interest; or

B)

the interest is paid in respect of the following securities listed on a

registered stock exchange

i.

government bonds;

ii.

corporate bonds;

iii.

Euro-bonds,

the tax so charged shall not exceed five per cent (5%).

4. 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. However, the term

"interest" shall not include for the purpose of this Article interest regarded as

dividends under paragraph 4 of Article 10.

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

interest, being a resident of a Contracting State, carries on business in the other

Contracting State in which the interest arises, through a permanent establishment

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

effectively connected with such permanent establishment. In such case the

provisions of Article 7 shall apply.

6. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of the

interest, having regard to the debt-claim for which it is paid, exceeds the amount

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

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

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

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

other provisions of this Convention.

7. Interest shall be deemed to arise in a Contracting State when the payer is a

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

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

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

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

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

establishment is situated.

8. The reduced tax rate provided for in paragraphs 2 and 3 of this Article shall

not apply to interest arising in a Contracting State and paid to the permanent

establishment of an enterprise of the other Contracting State, situated in the third

State.

The provision 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 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, who is the beneficial owner of such royalties, may be taxed in that

other State.

2. However, such royalties may also be taxed in the Contracting State in which

they arise and according to the laws of that State, but if the beneficial owner of the

royalties is a resident of the other Contracting State, the tax so charged shall not

exceed 5 per cent of the gross amount of the royalties.

3. 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.

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

royalties, being a resident of a Contracting State, carries on business in the other

Contracting State in which the royalties arise, through a permanent establishment

situated therein and the right or property in respect of which the royalties are paid is

effectively connected with such permanent establishment. In such case the

provisions of Article 7 shall apply.

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

beneficial owner or between both of them and some other person, the amount of the

royalties, having regard to the use, right or information for which they are paid,

exceeds the amount which would have been agreed upon by the payer and the

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

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

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

regard being had to the other provisions of this Convention.

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

resident of that Contracting State. Where, however, the person paying the royalties,

whether he is a resident of a Contracting State or not, has in a Contracting State a

permanent establishment in connection with which the liability to pay the royalties

was incurred, and such royalties are borne by such permanent establishment, then

such royalties shall be deemed to arise in the State in which the permanent

establishment is situated.

7. The reduced tax rate provided for in paragraph 2 of this Article shall not

apply to royalties arising in a Contracting State and paid to the permanent

establishment of an enterprise of the other Contracting State, situated in the third

State.

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 assignment of

the rights in respect of which the royalties are paid to take advantage of this Article

by means of that creation or assignment.

Article 13

CAPITAL GAINS

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

immovable property referred to in Article 6 and situated in the other Contracting

State may be taxed in that other State.

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

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

in the other Contracting State including such gains from the alienation of such a

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

other State.

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

ships or aircraft operated in international traffic, or from movable property

pertaining to the operation of such ships or aircraft, shall be taxable only in that

State.

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

shares or other rights deriving more than 50 per cent of their value directly or

indirectly from immovable property situated in the other Contracting State may be

taxed in that other State.

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

paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the

alienator is a resident.

Article 14

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other

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

employment shall be taxable only in that State unless the employment is exercised

in the other Contracting State. If the employment is so exercised, such remuneration

as is derived therefrom may be taxed in that other State.

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

resident of a Contracting State in respect of an employment exercised in the other

Contracting State shall be taxable only in the first-mentioned State if

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

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

commencing or ending in the fiscal year concerned, and

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

resident of the other State, and

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

employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

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

international traffic by an enterprise of a Contracting State, may be taxed in that

State.

Article 15

DIRECTORS' FEES

Directors' fees and other similar payments derived by a resident of a Contracting

State in his capacity as a member of the board of directors of a company which is a

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

Article 16

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 7 and 14, income derived by a

resident of a Contracting State as an entertainer, such as a theatre, motion picture,

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

activities as such exercised in the other Contracting State, may be taxed in that other

State.

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

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

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

Articles 7 and 14, be taxed in the Contracting State in which the activities of the

entertainer or sportsman are exercised.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derived from

such activities as are referred to in paragraph 1 performed under a cultural agreement

or arrangement between the Contracting States shall be exempt from tax in the

Contracting State in which the activities are exercised if the visit to that State is

wholly or substantially supported by public or government funds of either

Contracting State.

Article 17

PENSIONS

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

similar remuneration paid to a resident of a Contracting State in consideration of

past employment shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, pensions paid and other

similar payments made by the Government of a Contracting State or a political

subdivision or a local authority thereof under a public welfare scheme of the social

security system of that State shall be taxable only in that State.

Article 18

GOVERNMENT SERVICE

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

State or a political subdivision or a local authority thereof to an

individual in respect of services rendered to that State or subdivision or

authority shall be taxable only in that State.

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

taxable only in the other Contracting State if the services are rendered in

that State and the individual is a resident of that State who

(i) is a national of that State; or

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

rendering the services.

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

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

State or a political subdivision or a local authority thereof to an

individual in respect of services rendered to that State or subdivision or

authority shall be taxable only in that State.

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

in the other Contracting State if the individual is a resident of, and a

national of, that State.

3. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries, wages,

pensions and other similar remuneration in respect of services rendered in

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

subdivision or a local authority thereof.

Article 19

PROFESSORS, TEACHERS AND RESEARCHERS

An individual who visits a Contracting State at the invitation of that State or of a

university, college, school, museum or other cultural institution of that State or under

an official programme of scientific, research or cultural exchange for a period not

exceeding two years for the purpose of teaching, giving lectures or carrying out

research at such institution and who is, or was immediately before that visit, a

resident of the other Contracting State shall be exempt from tax in the first-

mentioned State on his remuneration for such activity, provided that such

remuneration is derived by him from the other Contracting State.

Article 20

STUDENTS

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

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

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

training receives for the purpose of his maintenance, education or training shall not

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

State.

Article 21

OTHER INCOME

Items of income of a resident of a Contracting State, arising in the other

Contracting State, and not dealt with in the foregoing Articles of this Convention

may be taxed in that other State.

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 Convention, there is included in a Malta assessment income from sources

within Russia, the Russian tax on such income shall be allowed as a credit against

the relative Malta tax payable thereon.

2. In the case of Russia, double taxation shall be eliminated as follows

Where a resident of Russia derives income from Malta, the amount of tax on that

income payable in Malta in accordance with the provisions of this Convention may

be credited against the Russian tax imposed on that resident. The amount of credit,

however, shall not exceed the amount of the Russian tax on that income computed in

accordance with the taxation laws and regulations of Russia.

Article 23

Amended by

NON-DISCRIMINATION

L.N. 428 of 2020.

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

Contracting State to any taxation or any requirement connected therewith which is

other or more burdensome than the taxation and connected requirements to which

nationals of that other State in the same circumstances, in particular with respect to

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

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

the Contracting States.

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

Contracting State has in the other Contracting State shall not be less favourably

levied in that other State than the taxation levied on enterprises of that other State

carrying on the same activities. This provision shall not be construed as obliging a

Contracting State to grant to residents of the other Contracting State any personal

allowances, reliefs and reductions for taxation purposes on account of civil status or

family responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 5 of

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

disbursements paid by an enterprise of a Contracting State to a resident of the other

Contracting State shall, for the purpose of determining the taxable profits of such

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

resident of the first-mentioned State.

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

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

Contracting State, shall not be subjected in the first-mentioned State to any taxation

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

taxation and connected requirements to which other similar enterprises of the first-

mentioned State are or may be subjected.

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 Contracting

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

of this Convention, he may, irrespective of the remedies provided by the domestic

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

State of which he is a resident or, if his case comes under paragraph 1 of Article 22,

to that of the Contracting State of which he is a national. The case must be presented

within three years from the first notification of the action resulting in taxation not in

accordance with the provisions of the Convention.

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

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

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

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

Convention. Any agreement reached shall be implemented notwithstanding any

time limits in the domestic law of the Contracting States.

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

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

interpretation or application of the Convention. They may also consult together for

the elimination of double taxation in cases not provided for in the Convention.

4. The competent authorities of the Contracting States may communicate with

each other directly, including through a joint commission consisting of themselves or

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

preceding paragraphs.

Article 25

Amended by

EXCHANGE OF INFORMATION

L.N. 428 of 2020.

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

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

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

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

of their political subdivisions or local authorities, insofar as the taxation thereunder

is not contrary to the Convention. The exchange of information is not restricted by

Articles 1 and 2.

2. Any information received under paragraph 1 by a Contracting State shall be

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

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

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

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

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

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

information in public court proceedings or in judicial decisions. Notwithstanding the

foregoing, information received by a Contracting State may be used for other purposes

when such information may be used for such other purposes under the laws of both

Contracting States and the competent authority of the supplying Contracting State

authorises such use.

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

impose on a Contracting State the obligation

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

administrative practice of that or of the other Contracting State;

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

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

State;

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

industrial, commercial or professional secret or trade process, or

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

(ordre public).

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

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

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

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

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

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

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

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

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

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

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

Article 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Convention 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

LIMITATION OF BENEFITS

1. Notwithstanding the provisions of any other Article of this Convention, a

resident of a Contracting State shall not receive the benefit of any reduction in or

exemption from tax provided for in the Convention by the other Contracting State if

the main purpose or one of the main purposes of such resident or a person connected

to such resident was to obtain the benefits of the Convention.

2. The foregoing provision shall not apply where a company is engaged in

substantive business operations in Contracting State of which it is a resident and the

relief from the taxation claimed from the other Contracting State is with respect to

income that is connected to such operations.

Article 28

ENTRY INTO FORCE

Both Contracting States shall notify each other through diplomatic channels that

they have completed the internal legal procedures necessary for the entry into force

of this Convention. This Convention shall enter into force on the thirtieth day upon

the receipt of the latter notification. This Convention shall be applicable in respect of

income derived during the taxable years beginning on or after the first day of

January next following that in which this Convention enters into force.

Article 29

TERMINATION

This Convention shall continue in effect indefinitely but either of the Contracting

States may, on or before the thirtieth day of June in any calendar year beginning after

the expiration of a period of five years from the date of its entry into force, give

written notice of termination to the other Contracting State through diplomatic

channels. In such event this Convention shall cease to have effect as respects income

derived during the taxable years beginning on or after the first day of January in the

calendar year next following that in which the notice of termination is given.

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

respective Governments, have signed this Convention.

DONE at Moscow this 24th day of April, 2013 in duplicate in the English and

Russian languages both texts being equally authentic.

Raymond Sarsero

Sergey Dmitrievich Shatalov

FOR THE GOVERNMENT OF MALTA

FOR THE GOVERNMENT OF

THE RUSSIAN FEDERATION

PROTOCOL

TO THE CONVENTION

BETWEEN THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF THE RUSSIAN FEDERATION

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

At the moment of signing the Convention between the Government of Malta and

the Government of the Russian Federation for the Avoidance of Double Taxation and

the Prevention of Fiscal Evasion with respect to Taxes on Income (hereinafter

referred to as "the Convention"), the undersigned have agreed upon the following

provisions which shall form an integral part of the Convention.

1. The term "political subdivisions" in this Convention means, with respect to

the Russian Federation, subjects of the Russian Federation, defined as such

according to its legislation.

2. Notwithstanding any provision of Article 23 "Non-Discrimination" of this

Convention it is not prohibited to a Contracting State to apply the provisions of its

national tax laws concerning thin «capitalisation rules» or «controlled foreign

company rules».

3. Any document received under Article 25 "Exchange of Information" of this

Convention or a certificate of residence issued by the competent authority of a

Contracting State or its authorised representative shall not require legalisation or

apostille for the purposes of application in the other Contracting State, including its

use in the courts and administrative bodies.

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

their respective Governments, have signed this Protocol.

DONE at Moscow this 24th day of April, 2013 in duplicate in the English and

Russian languages both texts being equally authentic.

Raymond Sarsero

Sergey Dmitrievich Shatalov

FOR THE GOVERNMENT OF MALTA

FOR THE GOVERNMENT OF

THE RUSSIAN FEDERATION