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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF LEBANON

SUBSIDIARY LEGISLATION 123.49

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE REPUBLIC OF LEBANON

ORDER

23rd February, 1999

LEGAL NOTICE 119 of 2000, as amended by Legal Notice 242 of 2010.

The title of this Order is Double Taxation Relief on Taxes

on Income with the Republic of Lebanon Order.

CONVENTION

BETWEEN THE REPUBLIC OF MALTA

AND THE REPUBLIC OF LEBANON

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

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

Lebanon, desiring to promote and strengthen their economic co-operation by

concluding a Convention for the avoidance of double taxation and the prevention of

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

Article 1

PERSONAL SCOPE

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 local authorities or its administrative - territorial units,

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

m o v ab l e o r i m m o v a b l e p r o p e r t y, a n d t a x e s o n s a l a r i e s an d o t h e r s i m i l a r

remuneration.

It is hereby declared:-

(a) that the arrangements specified in the Convention set

out in the Schedule to this Order have been made with

the Republic of Lebanon with a view to affording

relief from double taxation in relation to the following

taxes imposed by the laws of the Republic of Lebanon

(i)

the tax on the profits of industrial, commercial

and non-commercial professions;

(ii) the tax on salaries, wages and pensions;

(iii) the tax on income derived from movable capital;

(b) that it is expedient that those arrangements should

have effect.

(c) that the Convention has entered into force on the 10th

February, 2000.

The existing taxes to which this Convention shall apply are

(a) In the case of Lebanon

(i)

the tax on the profits of industrial, commercial and non-

commercial professions;

(ii) the tax on salaries, wages and pensions;

(iii) the tax on income derived from movable capital;

(iv) the tax on built property;

(hereinafter referred to as “Lebanese tax”);

(b) In the case of Malta

the income tax;

(hereinafter referred to as “Malta tax”).

The Convention shall apply also to any identical or substantially similar

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

or in place of, the existing taxes referred to in paragraph 3. The competent

authorities of the Contracting States shall notify each other of any substantial

changes which have been made in their respective taxation laws within a reasonable

period of time after such changes.

Article 3

GENERAL DEFINITIONS

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

(a) the terms “a Contracting State” and “the other Contracting State” mean

Lebanon or Malta as the context requires;

(b) the term “Lebanon” means the territory of the Republic of Lebanon

including its territorial sea as well as the exclusive economic zone over

which Lebanon exercises sovereignty, sovereign rights and jurisdiction

in accordance with its national law and with the international law,

concerning the exploration and the exploitation of the natural,

biological and mineral resources existing in the sea waters, sea-bed and

subsoil of these waters;

(c) 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 the

Republic of 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;

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

of persons legally set up in either of the Contracting States;

(e) the term “company” means any body corporate or any other entity

which is treated as a body corporate for tax purposes;

(f)

the terms “enterprise of a Contracting State” and “enterprise of the other

Contracting State” mean respectively an enterprise carried on by a

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

of the other Contracting State;

(g) The term “national” means

(i) any individual possessing the nationality of a Contracting State;

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

such from the laws in force in a 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 “competent authority” means

(i)

in the case of Lebanon, the Minister of Finance or his authorized

representative,

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

authorized representative.

2. As regards the application of this Convention by a Contracting State any

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

meaning which it has under the law of that State concerning the taxes to which the

Convention applies.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF LEBANON

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. But this term 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 of the State in which he has a

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

in both States, he shall be deemed to be a resident 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 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 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 of the Contracting State in which its place of effective management is

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;

(f)

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

natural resources including an offshore drilling site;

(g) a building site, a construction, assembly or installation project or

supervisory activities in connection therewith, but only where such site,

project or activities continue for a period of more than six months

within any twelve-month period; and

(h) the furnishing of services, including consultancy services, by an

enterprise of a Contracting State through employees or other personnel

engaged for such purposes in the other Contracting State, provided that

such activities continue for the same project or a connected project for a

period or periods aggregating more than six months within any twelve-

month period.

3. 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 sale of goods or merchandise belonging to the enterprise, displayed

in an occasional temporary fair or exhibition, after the closing of the

said fair or exhibition;

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

purchasing goods or merchandise or of collecting information, for the

enterprise;

(f)

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;

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

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

overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

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

than an agent of an independent status to whom paragraph 5 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 3 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, a 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, or to explore for, mineral deposits, sources and other natural resources;

ships or aircraft shall not be regarded as immovable property.

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

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

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

immovable property of an enterprise and to income from immovable property used

for the performance of independent personal services.

Article 7

BUSINESS PROFITS

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

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

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

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

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

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

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

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

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

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

activities under the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.

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

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

permanent establishment, including executive and general administrative expenses

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

elsewhere.

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

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

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

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

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

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

principles contained in this Article.

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

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

enterprise.

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

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

unless there is good and sufficient reason to the contrary.

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

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

affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

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

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

2. The provisions of paragraph 1 shall apply to profits derived 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 the 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.

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

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

Lebanese tax so charged 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 Lebanon who is the beneficial owner thereof, the Malta

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

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

The competent authorities of the Contracting States shall by mutual agreement

settle the mode of application of this limitation.

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

profits out of which the dividends are paid.

3. The term “dividends” as used in this Article means income from shares,

“jouissance” shares, or “jouissance” rights, mining shares, founder’s 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 effective

(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, or

performs in that other State independent personal services from a fixed base situated

therein, and the holding in respect of which the dividends are paid is effectively

connected with such permanent establishment or fixed base. In such case, the

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

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 or a fixed base

situated in that other State, nor subject the company’s undistributed profits to a tax

o n th e co m p an y ’s un d i st r ib u te d p r o f its , ev en i f th e d iv i d en d s p aid o r th e

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 the 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 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.

*as amended by Legal Notice 242 of 2010.

3. The provisions of paragraph 1 shall not apply if the effective (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, or performs in that other State independent personal

services from a fixed base situated therein, and the debt-claim in respect of which

the interest is paid is effectively connected with such permanent establishment or

fixed base. In such case the provisions of Article 7 or Article 14, as the case may be,

shall apply.

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

effective (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 effective

(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 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 recipient is the effective

(beneficial) owner of the royalties, the tax so charged shall not exceed five per cent

of the gross amount of the royalties. The competent authorities of the Contracting

States shall by mutual agreement settle the mode of application of this limitation.

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, transmission to the public by satellite, cable,

optic fibre or similar technology, any patent, trade mark, design or model, plan,

secret formula or process, or for the use of or the right to use any industrial,

commercial or scientific equipment, or for information concerning industrial,

commercial or scientific experience.

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

(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, or performs in that other State independent

personal services from a fixed base situated therein, and the right or property in

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

establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as

the case may be, shall apply.

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

that State itself, a local authority, an administrative - territorial unit or a resident of

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

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

or a fixed base in connection with which the liability to pay the royalties was

incurred, and such royalties are borne by such permanent establishment or fixed

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

the permanent establishment or fixed base is situated.

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

effective (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 effective (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 the Contracting State in which such property is situated.

2. Gains from the alienation of shares or comparable interests in a company the

assets of which consist, directly or indirectly, principally of immovable property

situated in a Contracting State may be taxed in that State.

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

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

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

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

purpose of performing independent personal services, including such income or

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

enterprise) or of such fixed base, may be taxed in that other State.

4. Gains from the alienation of ships or aircraft operated in international traffic

by an enterprise of a Contracting State or movable property pertaining to the

operation of such means of transport shall be taxable only in that 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

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting State in respect of

professional services or other activities of an independent character shall be taxable

only in that State except in the following circumstances, when such income may also

be taxed in the other Contracting State

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

State for the purposes of performing his activities; or

(b) if he is present in the other Contracting State for a period or periods

amounting to or exceeding in the aggregate 183 days in any twelve-

month period commencing or ending in the calendar year concerned

Provided that, in the cases referred to in sub-paragraphs (a) and (b), the

income may be taxed in the other Contracting State but only so much of it as is

attributable to the fixed base or is derived from the activities performed in the period

in which the resident was present, as the case may be, in that other State.

2. The term “professional services” includes especially independent scientific,

literary, artistic, educational or teaching activities as well as the independent

activities of physicians, lawyers, engineers, architects, dentists and accountants.

Article 15

DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16, 18, 19 and 20, 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 exercised in the other

Contracting State, 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 calendar year concerned; and

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

resident of the other State; and

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

base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

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

international traffic by an enterprise of a Contracting State shall be taxable only in

that State.

Article 16

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 17

ARTISTES AND SPORTSMEN

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

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

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

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

State.

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

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

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

Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the

entertainer or sportsman are exercised.

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

from the activities referred to in paragraph 1 within the framework of cultural or

sport exchanges agreed to by the governments of the Contracting States and carried

out other than for the purpose of profit shall be exempted from tax in the Contracting

State in which these activities are exercised.

Article 18

PENSIONS AND SOCIAL SECURITY PAYMENTS

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

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

past employment shall be taxable only in that State.

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

similar payments made under the social security legislation of a Contracting State

shall be taxable only in that State.

Article 19

GOVERNMENT SERVICE

1. (a) Salaries, wages and other similar remuneration, other than a pension,

p a i d b y a C o n t r a c t i n g St a t e o r a l o c a l a u t h o r i t y t h e r e o f o r a n

administrative - territorial unit thereof to an individual in respect of

services rendered to that State or authority or unit 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) Any pension paid by, or out of funds created by, a Contracting State or a

local authority thereof or an administrative - territorial unit thereof to an

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

unit shall be taxable only in that State.

(b) However, such pension 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 15, 16 and 18 shall apply to salaries, wages and

other similar remuneration and pensions in respect of services rendered in

connection with a business carried on by a Contracting State or a local authority

thereof or an administrative - territorial unit thereof.

Article 20

STUDENTS AND TRAINEES

1. A resident of a Contracting State who is temporarily present in the other

Contracting State as a student or a trainee and who receives a technical, professional

or business training shall, for a period not exceeding seven years, not be taxed in the

other Contracting State for remittances from abr oad f or the purpose of his

maintenance, education or training or as a scholarship to continue his education.

2. Remuneration paid to the student or trainee, as the case may be, for services

rendered in the other State shall not be taxed in that other State for a period of two

years provided that such services are connected with his education, maintenance or

Article 21

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

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, or performs in

that other State independent personal services from a fixed base situated therein, and

the right or property in respect of which the income is paid is effectively connected

with such permanent establishment or fixed base. In such case the provisions of

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

Article 22

ELIMINATION OF DOUBLE TAXATION

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

Where a resident of Lebanon derives income from sources within Malta which

under the law of Malta and in accordance with this Convention may be taxed in

Malta, Lebanon shall allow as a credit against its tax on the income, items of income,

profits or gains an amount equal to the tax paid in Malta.

The amount of credit, however, shall not exceed the amount of Lebanese tax on

that income, items of income, profits or gains computed in accordance with the

taxation laws and regulations of Lebanon.

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

(a) 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 Lebanon, the Lebanese tax on

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

payable thereon.

(b) Where a company which is a resident of Lebanon pays a dividend to a

company resident in Malta, the credit shall take into account (in

addition to any Lebanese tax for which credit may be allowed under

sub-paragraph (a) of this paragraph) the Lebanese tax payable by that

first-mentioned company in respect of the profits out of which such

dividend is paid.

3. For the purposes of allowance as a credit, the tax payable in Lebanon or

Malta, as the context requires, shall be deemed to include the tax which is otherwise

payable in a Contracting State but has been reduced or waived by that State under its

legal provisions for tax incentives.

*as amended by Legal Notice 242 of 2010.

Article 23

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

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

the Contracting States.

2. Stateless persons who are residents of a Contracting State shall not be

subjected in either 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 the State concerned in the same circumstances

are or may be subjected.

3. 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. The provisions of this Article 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.

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

5. 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.

Article 24

MUTUAL AGREEMENT PROCEDURE

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

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

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

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

State of which he is a resident or, if his case comes under paragraph 1 of Article 23,

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

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

accordance with the provisions of the Convention.

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

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

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

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

Convention. Any agreement reached shall be implemented notwithstanding any time

limits in the domestic law of the Contracting States.

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

r e s o l v e b y m u t u a l a g r e em e n t an 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 this 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 for the purpose of reaching an agreement in the sense of the

preceding paragraphs.

Article 25

EXCHANGE OF INFORMATION

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

information as is necessary for carrying out the provisions of this Convention or of

the domestic laws of the Contracting States concerning taxes covered by the

Convention insofar as the taxation thereunder is not contrary to the Convention,

especially in order to prevent fraud or evasion in respect of such taxes. The exchange

of information is not restricted by Article 1. Any information received 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 an d adm inistrative bodies) involved in the

assessment or collection of, the enforcement or prosecution in respect of, or the

determination of appeals in relation to, the taxes covered by the Convention. 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.

2. In no case shall the provisions of paragraph 1 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).

Article 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Convention shall affect the fiscal privileges of members of

diplomatic missions or consular posts under the general rules of international law or

under the provisions of special agreements.

Article 27

ENTRY INTO FORCE

This Convention shall be ratified and shall enter into force on the thirtieth day

after the date of the later of the notifications indicating that both States have

complied with the domestic legal procedures required in each State for its entry into

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF LEBANON

force. The Convention shall apply

(a) in the case of Lebanon

(i)

in respect of taxes withheld at source on the income derived

during 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 Convention enters into force; and

(ii)

in respect of other taxes on profit and income derived during 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 Convention enters into force;

(b) in the case of Malta

in respect of taxes on income derived during 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 Convention enters into force.

Article 28

TERMINATION

1. This Convention shall remain in force until terminated by a Contracting

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

channels, by giving written 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, this Convention shall cease to have effect

(a) in the case of Lebanon

(i)

in respect of taxes withheld at source on the income derived

during 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; and

(ii)

in respect of other taxes on profit and income derived during 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 of termination is given;

(b) in the case of Malta

in respect of taxes on income derived during 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 of termination is given.

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

respective Governments, have signed this Convention.

DONE in duplicate at Beirut on the 23rd February, 1999 in the English and Arabic

languages, both texts being equally authentic.

GUIDO DE MARCO

GEORGE CORM

For The Government of

For The Government of

The Republic of Malta

The Republic of Lebanon

PROTOCOL

AMENDING THE CONVENTION BETWEEN

THE REPUBLIC OF MALTA

AND THE REPUBLIC OF LEBANON

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

SIGNED IN BEIRUT ON 23 FEBRUARY 1999

The Government of Malta and the Government of the Republic of Lebanon,

desiring to amend the Convention between the two Governments for the avoidance

of double taxation and the prevention of fiscal evasion with respect to taxes on

income signed in Beirut on 23 February 1999 (hereinafter referred to as “the

Convention”), have agreed as follows

Article I

Paragraph 1 of Article 11 of the Convention shall be substituted by the following

paragraph

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

Contracting State shall be taxable only in the other State.”

Article 2

In paragraph 1 of Article 22 of the Convention, the words “Where a resident of

Lebanon derives income from sources within Lebanon” shall be substituted by the

words “Where a resident of Lebanon derives income from sources within Malta”.

Article 3

The Protocol shall enter into force on the date of receipt of the latter of the

notification of each Contracting State notifying the other of the completion of the

procedures required by its domestic law for the entry into force of this Protocol.

Pending such exchange, the Protocol shall be given provisional effect. Moreover, the

provisions of the Convention shall be interpreted, since the entry into force of the

Convention, in light of the provisions of the Protocol.

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

respective Governments, have signed this Protocol.

DONE in duplicate at Beirut on 16th April, 2009 in English and Arabic languages,

both texts being equally authentic.

TONIO BORG

FAWZI SALLOUKH

For the Government of Malta

For the Government of the

Republic of Lebanon