DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE PRINCIPALITY OF ANDORRA) ORDER

(THE PRINCIPALITY OF ANDORRA)

SUBSIDIARY LEGISLATION 123.181

DOUBLE TAXATION RELIEF (TAXES ON INCOME)

(THE PRINCIPALITY OF ANDORRA) ORDER

13th April, 2018

LEGAL NOTICE 118 of 2018.

The title of this order is the Double Taxation Relief

(Taxes on Income) (The Principality of Andorra) Order.

ARTICLE 2

CONVENTION BETWEEN THE GOVERNMENT OF THE

REPUBLIC OF MALTA AND THE GOVERNMENT OF THE

PRINCIPALITY OF ANDORRA

The Government of the Republic of Malta and the Government

of the Principality of Andorra, desiring to further develop their

economic relations and to enhance their cooperation in tax matters by

way of concluding a Convention for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income

without creating opportunities for non-taxation or reduced taxation

through tax evasion or avoidance 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

Principality of Andorra with a view to affording relief from

double taxation in relation to the following taxes imposed by

the laws of the Principality of Andorra

(i)

corporate income tax (Impost sobre les

societats);

(ii)

personal income tax (Impost sobre la renda

de les persones físiques);

(iii)

tax on income for fiscal non-residents

(Impost sobre la renda dels no residents

fiscals); and

(iv)

tax payable on the increase in value in

immovable property transfers (Impost sobre

les plusvàlues en les transmissions

patrimonials immobiliàries);

(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 has entered into force on 27th

September 2017.

(THE PRINCIPALITY OF ANDORRA)

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 Andorra

(i)

corporate income tax (Impost sobre les

societats);

(ii) personal income tax (Impost sobre la renda de

les persones físiques);

(THE PRINCIPALITY OF ANDORRA)

(iii) tax on income for fiscal non-residents (Impost

sobre la renda dels no residents fiscals); and

(iv) tax payable on the increase in value in

immovable property transfers (Impost sobre

les plusvàlues en les transmissions

patrimonials immobiliàries);

(hereinafter referred to as "Andorran 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

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 "Andorra" means the Principality of

Andorra and, when used in a geographical sense

means the territory of the Principality of Andorra;

(c)

the terms "a Contracting State" and "the other

Contracting State" mean Malta or Andorra, 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;

(THE PRINCIPALITY OF ANDORRA)

(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 that

has its place of effective management in a

Contracting State, except when the ship or aircraft is

operated solely between places in the other

Contracting State;

(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;

(ii)

in Andorra: the Minister of Finance or his

authorised representative;

(j)

the term "national", in relation to a Contracting

State, means

(i)

any individual possessing the nationality of

that Contracting State;

(ii)

any legal person, partnership or association

deriving its status as such from the laws in

force in that 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.

(THE PRINCIPALITY OF ANDORRA)

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 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.

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.

(THE PRINCIPALITY OF ANDORRA)

2. The term "permanent establishment" includes especially

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop;

(f)

a mine, an oil or gas well, a quarry or any other

place of extraction of natural resources; and

(g)

an agricultural, pastoral or forestry exploitation.

3. A building site or construction or installation project

constitutes a permanent establishment only if it lasts more than twelve

months.

4. Notwithstanding the preceding provisions of this Article,

the term "permanent establishment" shall be deemed not to include

(a)

the use of facilities solely for the purpose of storage,

display or delivery of goods or merchandise

belonging to the enterprise;

(b)

the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose of

storage, display or delivery;

(c)

the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose of

processing by another enterprise;

(d)

the maintenance of a fixed place of business solely

for the purpose of purchasing goods or merchandise,

or 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.

(THE PRINCIPALITY OF ANDORRA)

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.

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

the income from immovable property of an enterprise.

(THE PRINCIPALITY OF ANDORRA)

ARTICLE 7

Business Profits

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

taxable only in that State unless the enterprise carries on business in the

other Contracting State through a permanent establishment situated

therein. If the enterprise carries on business as aforesaid, the profits of

the enterprise may be taxed in the other State but only so much of them

as is attributable to that permanent establishment.

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

enterprise of a Contracting State carries on business in the other

Contracting State through a permanent establishment situated therein,

there shall in each Contracting State be attributed to that permanent

establishment the profits which it might be expected to make if it were

a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly

independently with the enterprise of which it is a permanent

establishment.

3. In determining the profits of a permanent establishment,

there shall be allowed as deductions expenses which are incurred for

the purposes of the permanent establishment, including executive and

general administrative expenses so incurred, whether in the State in

which the permanent establishment is situated or elsewhere.

4. No profits shall be attributed to a permanent

establishment by reason of the mere purchase by that permanent

establishment of goods or merchandise for the enterprise.

5. 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.

6. 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 from the operation of ships or aircraft in

international traffic shall be taxable only in the Contracting State in

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

2. If the place of effective management of a shipping

enterprise is aboard a ship, then it shall be deemed to be situated in the

Contracting State in which the home harbour of the ship is situated, or,

(THE PRINCIPALITY OF ANDORRA)

if there is no such home harbour, in the Contracting State of which the

operator of the ship is a resident.

3. 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.

4. 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.

(THE PRINCIPALITY OF ANDORRA)

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 shall be

taxable only in that other State, provided that the beneficial owner of

the dividends is a resident of the other State.

This paragraph shall not affect the taxation of the company in

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

2. The term "dividends" as used in this Article means

income from shares, "jouissance" shares or "jouissance" rights, mining

shares, founders' shares or other rights, not being debt-claims,

participating in profits, as well as income 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.

3. 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.

4. 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 shall be taxable only in that

other State, provided that the beneficial owner of the interest is a

resident of that other State.

2. The term "interest" as used in this Article means income

from debt-claims of every kind, whether or not secured by mortgage

(THE PRINCIPALITY OF ANDORRA)

and whether or not carrying a right to participate in the debtor's profits,

and in particular, income from government securities and income from

bonds or debentures, including premiums and prizes attaching to such

securities, bonds or debentures. Penalty charges for late payment shall

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

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

beneficial owner of the interest, being a resident of a Contracting

State, carries on business in the other Contracting State in which the

interest arises through a permanent establishment situated therein 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.

4. 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.

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 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.

ARTICLE 12

Royalties

1. Royalties arising in a Contracting State and beneficially

owned by a resident of the other Contracting State shall be taxable

only in that other State.

2. The term "royalties" as used in this Article means

payments of any kind received as a consideration for the use of, or the

right to use, any copyright of literary, artistic or scientific work

including cinematograph films, any patent, trade mark, design or

model, plan, secret formula or process, or for information concerning

industrial, commercial or scientific experience.

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

beneficial owner of the royalties, being a resident of a Contracting

State, carries on business in the other Contracting State in which the

(THE PRINCIPALITY OF ANDORRA)

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.

4. 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 State in which the permanent

establishment is situated.

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.

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 the Contracting State in which the

place of effective management of the enterprise is situated.

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.

(THE PRINCIPALITY OF ANDORRA)

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 the Contracting State in which the

place of effective management of the enterprise is situated.

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.

(THE PRINCIPALITY OF ANDORRA)

ARTICLE 16

Artistes And Sportspersons

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 sportsperson, 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 sportsperson in his capacity as such accrues not to

the entertainer or sportsperson 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 sportsperson are exercised.

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

income derived from activities exercised in a Contracting State by

artistes and sportspersons if the visit to that State is wholly or mainly

supported by public funds of the other Contracting State or political

subdivisions or local authorities thereof. In such a case, the income is

taxable in the Contracting State in which the artistes or sportspersons

are resident.

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

and other payments made under the social security legislation of a

Contracting 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

(THE PRINCIPALITY OF ANDORRA)

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 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

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 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

(THE PRINCIPALITY OF ANDORRA)

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

Andorra, the Andorran tax on such income shall be allowed as a

credit against the relative Malta tax payable thereon.

2. In the case of Andorra, double taxation shall be

eliminated as follows

(a) Where a resident of Andorra derives income which, in

accordance with the provisions of this Convention,

may be taxed in Malta, Andorra shall allow as a

deduction from the tax on the income of that

resident an amount equal to the tax paid in Malta.

Such deduction shall not, however, exceed that part

of the Andorran tax, as computed before the

deduction is given, which is attributable to such

items of income derived from Malta;

(b) Where a resident of Andorra derives income which, in

accordance with the provisions of this Convention,

is exempt from tax in Andorra, Andorra may in

order to calculate the amount of tax on the

remaining income of such resident, take into

account the income that has been exempted.

ARTICLE 22

Non-discrimination

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

the other Contracting State to any taxation or any requirement

connected therewith, which is other or more burdensome than the

taxation and connected requirements to which nationals of that other

State in the same circumstances, in particular with respect to residence,

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

(THE PRINCIPALITY OF ANDORRA)

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 5 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

(THE PRINCIPALITY OF ANDORRA)

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 resolve by mutual agreement any difficulties or doubts

arising as to the 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 24

Exchange Of Information

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 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 States and the competent authority of

the supplying 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;

(THE PRINCIPALITY OF ANDORRA)

(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 25

Members Of Diplomatic Missions And Consular Posts

Nothing in this Convention shall affect the fiscal privileges of

members of diplomatic missions, consular posts or permanent

delegations to international organizations, under the general rules

of international law or under the provisions of special agreements.

ARTICLE 26

Entitlement To Benefits

1. Notwithstanding the other provisions 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 this Convention by

the other Contracting State if it is reasonable to conclude, having

regard to all relevant facts and circumstances, that the principal

purpose was to obtain these benefits, unless it is established that

granting these benefits in these circumstances would be in accordance

with the object and purpose of the relevant provisions of this

Convention. Before a resident of a Contracting State is denied such

benefits in the other Contracting State by reason of the preceding

(THE PRINCIPALITY OF ANDORRA)

sentence, the competent authorities of the Contracting States shall

agree with each other following consultation.

2. Where, under any provision of this Convention, an item

of income may be relieved from tax in a Contracting State and, under

the domestic law in force in the other Contracting State, a person is

only subject to tax by reference to the amount of such income which is

remitted to or received in that other State and not by reference to the

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

State shall apply only to so much of the income which is subject to tax

in the other State.

ARTICLE 27

Entry Into Force

1. The Contracting States shall notify each other, through

diplomatic channels, that the legal requirements for the entry into force

of this Convention have been complied with.

2. This Convention shall enter into force thirty days after the

date of the later of the notifications referred to in paragraph 1 and its

provisions shall have effect

(a) in respect of taxes withheld at source, to income

derived on or after first day of January of the

calendar year next following the year in which the

Convention enters into force;

(b) in respect of other taxes on income, to taxes chargeable

for any taxable year (any calendar year or

accounting period, as the case may be), beginning

on or after the first day of January immediately

following the date on which the Convention enters

into force.

ARTICLE 28

Termination

This Convention shall remain in force until terminated by a

Contracting State. Either Contracting State may terminate the

Convention, through diplomatic channels, by giving notice of

termination at least six months before the end of any calendar year

beginning after the expiration of a period of five years from the date

of its entry into force. In such event, the Convention shall cease to

have effect

(a)

in respect of taxes withheld at source, to income

derived on or after first day of January of the

calendar year next following the year in which the

(THE PRINCIPALITY OF ANDORRA)

notice is given;

(b)

in respect of other taxes on income, to taxes

chargeable for any taxable year (any calendar year

or accounting period, as the case may be),

beginning on or after the first day of January

immediately following the year in which the notice

is given.

IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have signed this

Convention.

DONE at New York this 20th day of September, 2016, in two

originals in the English and Catalan languages, both texts being

equally authentic.

For the Government of

For the Government of

the Republic of Malta

the Principality of Andorra

PROTOCOL

At the signing today of the Convention between the Government of

the Republic of Malta and the Government of the Principality of

Andorra for the Avoidance of Double Taxation and the Prevention

of Fiscal Evasion with respect to Taxes on Income, the undersigned

have agreed upon the following provisions, which shall form an

integral part of this Convention

I.

With reference to paragraph 1 of Article 4 (Resident)

1. An investment fund and a pension fund or scheme

of a Contracting State is considered to be a resident of that

State. For this purpose

(i)

the term "investment fund" means,

(a) in the case of Malta, a collective investment scheme as

defined in the Investment Services Act (Chapter

370 of the Laws of Malta) and any other law or

regulation that may develop, replace or modify this

law in the future;

(b)

in the case of Andorra, an investment fund

according to the Andorran Law of 12 June 2012,

Law 10/2008 and any other law or regulation that

may develop, replace or modify this law in the

future;

(THE PRINCIPALITY OF ANDORRA)

(c)

any other investment fund, arrangement or entity of

a Contracting State which the competent authority

of that Contracting State determines to regard as an

investment fund for the purpose of this paragraph;

and

(ii) the term "pension fund or scheme" means

(a) in the case of Malta, a retirement fund or retirement

scheme licensed, regulated or otherwise authorised

under the Special Funds (Regulation) Act (Chapter

450 of the Laws of Malta) and any other law or

regulation that may develop, replace or modify this

law in the future;

(b)

in the case of Andorra, a pension fund or scheme

within the meaning of the Law Regulating the

activity of Insurance companies of 11 May 1989 and

any other law or regulation that may develop,

replace or modify this law in the future;

(c)

any other pension fund or scheme of a Contracting

State which the competent authority of that

Contracting State determines to regard as a pension

fund or scheme for the purpose of this paragraph.

2. A partnership or a trust which is formed under the laws of

a Contracting State and which is registered for tax purposes in that

Contracting State shall be considered as a resident of that Contracting

State.

II. With reference to Article 24 (Exchange of Information)

1. It is understood that the concept of foreseeable

relevance referred to in paragraph 1 thereto is intended to

provide for exchange of information in tax matters to the widest

possible extent and, at the same time, to clarify that the

Contracting States are not at liberty to engage in fishing

expeditions or to request information that is unlikely to be

relevant to the tax affairs of a given taxpayer.

2. The rights and safeguards secured to persons in a

Contracting State remain applicable in that Contracting State in

the course of the process of information exchange.

3. The provisions of the Convention in connection

with requests for information apply

(i)

in respect to tax matters involving intentional

conduct which is liable to prosecution under

(THE PRINCIPALITY OF ANDORRA)

the criminal laws of the requesting Party, to

taxable periods beginning on or after the first

day of January of the third year preceding

the one in which the Convention enters into

force, or where there is no taxable period, to

all taxes arising on or after the first day of

January of the third year preceding the one in

which the Convention enters into force; and

(ii) in other cases, to taxable periods beginning on

or after the first day of January of the year

next following the one in which the

Convention enters into force or, where there

is no taxable period, for all taxes arising on

or after the first day of January of the year

next following the one in which the

Convention enters into force.

IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have signed this

Protocol.

DONE at New York this 20 th day of September, 2016, in two

originals in the English and Catalan languages, both texts being

equally authentic.

For the Government of

For the Government of

the Republic of Malta

the Principality of Andorra