DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF MOLDOVA) ORDER (therepublicofmoldova)

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA)

SUBSIDIARY LEGISLATION 123.157

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA) ORDER

6th May, 2014

LEGAL NOTICE 151 of 2014.

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

on Income) (The Republic of Moldova) Order.

Article 2

CONVENTION

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF MALTA

AND

THE GOVERNMENT OF THE REPUBLIC OF MOLDOVA

FOR THE

AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAX ON INCOME

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

Moldova,

desiring to conclude a Convention for the avoidance of double taxation and the

prevention of fiscal evasion with respect to tax 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 tax on income imposed on behalf of a

Contracting State or of its administrative-territorial units, political subdivisions or

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

2. There shall be regarded as tax 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 Republic of Moldova with a view

to affording relief from double taxation in relation to

the following tax imposed by the laws of the Republic

of Moldova

-

the income tax;

(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 * .

17th June, 2015 - see Legal Notice 228 of 2015.

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA)

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

(a) in Malta

the income tax;

(hereinafter referred to as "Malta tax").

(b) in Moldova

the income tax;

(hereinafter referred to as "Moldovan 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 that 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

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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 "Moldova" means the Republic of Moldova and, when used in a

geographical sense, means its territory within its borders, consisting of soil, subsoil,

waters and aerial space above soil and waters, over which the Republic of Moldova

exercises its absolute and exclusive sovereignty and jurisdiction, in accordance with

its national legislation and international law;

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

Malta or Moldova, 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 term "enterprise" applies to the carrying on of any entrepreneurial

activity;

(g) 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;

(h) 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;

(i)

the term "business" includes the performance of professional services and of

other activities of an independent character;

(j)

the term "competent authority" means

(i)

in Malta: the Minister responsible for finance or his authorised

representative;

(ii) in Moldova: the Ministry of Finance or its authorised representative;

(k)

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

(i)

any individual possessing the nationality of respective

Contracting State;

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

such from the laws in force in respective 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 the respective 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 the respective State.

Article 4

RESIDENT

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

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State" means any person who, under the laws of the respective State, is liable to tax

therein by reason of his domicile, residence, place of registration or incorporation,

place of management or any other criterion of a similar nature, and also includes the

respective State and any administrative-territorial unit, political subdivision or local

authority thereof. This term, however, does not include any person who is liable to

tax in the respective State in respect only of income from sources in the respective

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 Contracting State in which its place of effective management is

situated.

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. The term "permanent establishment" also encompasses a building site, a

construction, assembly or installation project or supervisory activities in connection

therewith, but only if such site, project or activities last more than nine months in

any twelve month period.

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

"permanent establishment" shall be deemed not to include

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

of goods or merchandise belonging to the enterprise;

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

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

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

enterprise solely for the purpose of processing by another enterprise;

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

purchasing goods or merchandise, or of collecting information, for the

enterprise;

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

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

auxiliary character;

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

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

overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

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

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

on behalf of an enterprise and has, and habitually exercises, in a Contracting State an

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

deemed to have a permanent establishment in that State in respect of any activities

which that person undertakes for the enterprise, unless the activities of such person

are limited to those mentioned in-paragraph 4 which, if exercised through a fixed

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

establishment under the provisions of that paragraph.

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

Contracting State merely because it carries on business in that State through a

broker, general commission agent or any other agent of an independent status,

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

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

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

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

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

permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

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

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

Contracting State may be taxed in that other State.

2. 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.

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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. However, no such deduction shall be allowed in respect of amounts, if

any, paid (otherwise than towards reimbursement of actual expenses) by the

permanent establishment to the head office of the enterprise or any of its other

offices, by way of royalties, fees or other similar payments in return for the use of

patents or other rights, or by way of commission, for specific services performed or

for management, or, except in the case of a banking enterprise, by way of interest on

moneys lent to the permanent establishment. Likewise, no account shall be taken, in

the determination of the profits of a permanent establishment, for amounts charged

(otherwise than towards reimbursement of actual expenses), by the permanent

establishment to the head office of the enterprise or any of its other offices, by way

of royalties, fees or other similar payments in return for the use of patents or other

rights, or by way of commission for specific services performed or for management,

or, except in the case of a banking enterprise, by way of interest on moneys lent to

the head office of the enterprise or any of its other offices.

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 of this Article, 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.

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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 from the operation of ships or

aircraft in international traffic shall include in particular

(a) profits from the rental of ships or aircraft engaged in international

traffic on charter, fully equipped, manned and supplied;

(b) profits from the rental of ships or aircraft on a bareboat charter basis if

such rental activity is an ancillary activity for the enterprise engaged in

international traffic; and

(c) profits from the use, maintenance or rental of containers if such use,

maintenance or rental activity is an ancillary activity for the enterprise

engaged in international traffic.

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, but only

to so much of the profits so derived as is attributable to the participant in proportion

to its share in the joint operation.

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

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.

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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 State, but

(a) where the dividends are paid by a company which is a resident of

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

tax so charged in Moldova shall not exceed 5 per cent of the gross

amount of the dividends;

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

to a resident of Moldova who is the beneficial owner thereof, Malta tax

on the gross amount of the dividends shall not exceed that chargeable on

the profits out of which the dividends are paid.

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 or

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

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

from shares by the laws of the State of which the company making the distribution is

a resident.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner

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

other Contracting State of which the company paying the dividends is a resident,

through a permanent establishment situated therein 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.

5. 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.

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 also be taxed in the Contracting State in which

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

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

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

3. 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.

4. The provisions of paragraphs 1and 2shall not apply if the beneficial owner

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

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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.

5. 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 Contracting State in which the

permanent establishment is situated.

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

beneficial owner of the interest 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 of the interest 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.

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 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, and films or tapes

for radio or television broadcasting, 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 paragraphs 1 and 2 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. Royalties shall be deemed to arise in a Contracting State when the payer is 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 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 Contracting State in which the permanent

establishment is situated.

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

beneficial owner of the royalties 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

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the beneficial owner of the royalties 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.

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 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.

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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 personally but to another person, whether he is a resident of a Contracting

State or not, 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.

Article 17

PENSIONS

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.

Article 18

GOVERNMENT SERVICE

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

State, an administrative-territorial unit, a political subdivision or a local

authority thereof to an individual in respect of services rendered to that

State, administrative-territorial unit, political subdivision or authority

shall be taxable only in that State.

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

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

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

(i) is a national of that State; or

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

rendering the services.

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

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

State, an administrative-territorial unit, a political subdivision or a local

authority thereof to an individual in respect of services rendered to that

State, administrative-territorial unit, political subdivision or local

authority shall be taxable only in that State.

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

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

a national of, that State.

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

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pensions and other similar remuneration in respect of services rendered in

connection with a business carried on by a Contracting State, an administrative-

territorial unit or political subdivision or a local authority thereof.

Article 19

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 the first-mentioned State, provided that such payments arise from sources

outside that State.

Article 20

OTHER INCOME

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

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

State.

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

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

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

Contracting State through a permanent establishment situated therein and the right or

property in respect of which the income is paid is effectively connected with such

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

Article 21

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 Moldova, the Moldovan tax on such income shall be allowed as a credit

against the relative Malta tax payable thereon.

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

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

the provisions of this Convention, may be taxed in Malta, then Moldova

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

an amount equal to the income tax paid in Malta. Such deduction shall

not, however, exceed that part of the income tax, as computed before the

deduction is given, which is attributable to the income which may be

taxed in Malta.

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

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

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

remaining income of such resident, take into account the exempted

income.

Article 22

NON-DISCRIMINATION

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

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA)

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 6 of

Article 11, or paragraph 6 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 23

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

provisions of this 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

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA)

preceding paragraphs.

5. Where,

(a) under paragraph 1, a person has presented a case to the competent

authority of a Contracting State on the basis that the actions of one or

both of the Contracting States have resulted for that person in taxation

not in accordance with the provisions of this Convention, and

(b) the competent authorities are unable to reach an agreement to resolve

that case pursuant to paragraph 2 within two years from the presentation

of the case to the competent authority of the other Contracting State,

any unresolved issues arising from the case shall be submitted to arbitration if the

person so requests. These unresolved issues shall not, however, be submitted to

arbitration if a decision on these issues has already been rendered by a court or

administrative tribunal of either State. Unless a person directly affected by the case

does not accept the mutual agreement that implements the arbitration decision, that

decision shall be binding on both Contracting States and shall be implemented

notwithstanding any time limits in the domestic laws of these States. The competent

authorities of the Contracting States shall by mutual agreement settle the mode of

application of this paragraph.

Article 24

EXCHANGE OF INFORMATION

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

information as is foreseeable 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 administrative-territorial units, 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 State and shall be disclosed only to persons or authorities (including courts

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

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

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

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

information in public court proceedings or in judicial decisions.

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

impose on a Contracting State the obligation

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

administrative practice of that or of the other Contracting State;

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

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

State

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

industrial, commercial or professional secret or trade process, or

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

(ordre public).

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

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

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA)

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 25

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 26

ENTRY INTO FORCE

This Convention shall enter into force on the date of the latter of the written

notice, through diplomatic channels, confirming the completion by the Contracting

States of the internal procedures necessary for its entry into force and its provisions

shall have effect

(a) in respect of taxes withheld at source, on income derived on or after 1st

January of the calendar year next following the year in which this

Convention enters into force;

(b) in respect of other taxes on income, to taxes chargeable for any tax year

beginning on or after 1st January of the calendar year next following the

year in which this Convention enters into force.

Article 27

TERMINATION

This Convention shall remain in force until terminated by one of the Contracting

States. Either Contracting State may terminate the Convention, through diplomatic

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

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

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

effect

(a) in respect of taxes withheld at source, on income derived on or after 1st

January of the calendar year next following the year in which the notice

of termination is given;

(b) in respect of other taxes on income, to taxes chargeable for any tax year

beginning on or after 1st January of the calendar year next following the

year 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 Valletta on 10th April 2014 in two originals each in the Romanian and

English languages, both texts being equally authentic.

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE REPUBLIC OF MOLDOVA)

George W. Vella

Natalia Gherman

For the Government

For the Government

of the Republic of Malta

of the Republic of Moldova

PROTOCOL

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

the Government of the Republic of Moldova for the avoidance of double taxation

and the prevention of fiscal evasion with respect to tax on income, the undersigned

have agreed that the following provisions shall form an integral part of the

Convention.

I.

Ad Article 3

With reference to paragraph 1 subparagraph (d), the term "person" will also

include “an investment fund” which means

(i)

in Malta, a scheme or arrangement which is licensed or otherwise

authorised under the Investment Services Act (Cap. 370 of the Laws of

Malta);

(ii) in Moldova, a public company, participant of the security market

created for attracting funds by offering its own shares and registered

under the Domestic Legislation.

II.

Ad Articles 3 and 8

Notwithstanding the provisions of paragraph 1 subparagraph (h) of Article 3 and

in paragraph 1 of Article 8 "enterprise of a Contracting State" in the case in which an

enterprise, operating ships and aircrafts in international traffic, is a resident of

neither of the Contracting States, the right to tax will be attributed to the State under

which flag the ship or aircraft operates.

III.

Ad Article 10

With reference to paragraph 2 subparagraph (b) the wording "the profits out of

which the dividends are paid" means the dividends distributed to the respective

shareholder.

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

respective Governments, have signed this Protocol.

Done at Valletta on 10th April 2014 in two originals each in the Romanian and

English languages, both texts being equally authentic.

George W. Vella

Natalia Gherman

For the Government

For the Government

of the Republic of Malta

of the Republic of Moldova