DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER (sl_123.97) | MT

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Preamble — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF SAN MARINO

SUBSIDIARY LEGISLATION 123.97

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE REPUBLIC OF SAN MARINO

ORDER

19th July, 2005

LEGAL NOTICE 270 of 2006, as amended by Legal Notices 192 of 2010

and 98 of 2026.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 1 Citation. — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

The title of this order is the Double Taxation Relief on

Taxes on Income with the Republic of San Marino Order.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Schedule — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

BETWEEN

MALTA

AND

THE REPUBLIC OF SAN MARINO

WITH RESPECT TO TAXES ON INCOME

The Government of Malta and the Government of the Republic of San Marino,

desiring to conclude a Convention with respect to taxes on income, and to strengthen

the disciplined development of economic relations between the two States in the

framework of greater cooperation, 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 by a Contracting

State, 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.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 2 Arrangements to have effect. — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

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 San Marino with a view to affording

relief from double taxation in relation to the following

taxes imposed by the laws of the Republic of San

Marino;

the general income tax which is levied

(1) on individuals;

(2) on bodies corporate and proprietorship;

even if collected through a withholding tax.

(b) that it is expedient that those arrangements should

have effect;

(c) that the Convention has entered into force on the 19th

July, 2005.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 3 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

The existing taxes to which this Convention shall apply are

(a) in Malta

the income tax;

(hereinafter referred to as "Malta tax");

(b) in San Marino

the general income tax which is levied

1. on individuals;

2. on bodies corporate and proprietorships;

even if collected through a withholding tax;

(hereinafter referred to as "San Marino tax").

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 4 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

The Convention shall apply also to any identical or substantially similar

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

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

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

respective 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 "San Marino" means the Republic of San Marino and, when

used in a geographical sense, means the territory of the Republic of San

Marino, including any other area within which the Republic of San

Marino, in accordance with international law, exercises sovereign rights

or its jurisdiction;

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

Malta or San Marino, as the context requires;

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

of persons;

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

treated as a body corporate for tax purposes;

(f)

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

Contracting State" mean respectively an enterprise carried on by a

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

of the other Contracting State;

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

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

or aircraft is operated solely between places in the other Contracting

State;

(h) the term "competent authority" means

(i)

in Malta: the Minister responsible for finance or his authorised

representative;

(ii) in San Marino: the Ministry of Finance;

(i)

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.

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

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

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

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

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

Article 4

RESIDENT

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

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

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

similar nature. 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

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE REPUBLIC OF SAN MARINO

(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.

2. The term "permanent establishment" includes especially

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop; and

(f)

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

natural resources including an offshore drilling site.

3. The term "permanent establishment" likewise encompasses

(a) 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;

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

enterprise through employees or other personnel engaged by the

enterprise for such purpose, but only where activities of that nature

continue (for the same or a connected project) within a Contracting

State for a period or periods aggregating more than six months within

any twelve-month period.

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

publicity, providing information, scientific research or any other

activity of a preparatory or auxiliary character, for the enterprise;

(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.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 5 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

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.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 6 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

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.

Laws of Malta — Subsidiary Legislation 123.97 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER

Reg. 7 — DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF SAN MARINO ORDER Open official source

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) 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, rights to which the provisions of general law

respecting landed property apply, usufruct of immovable property and rights to

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

mineral deposits, sources and other natural resources; ships, boats and aircraft shall

not be regarded as immovable property.

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

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

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

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

for the performance of 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 Contracting State in which the permanent establishment

is situated or elsewhere.

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

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

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

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

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

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

principles contained in this Article.

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

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

enterprise.

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

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

unless there is good and sufficient reason to the contrary.

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

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

affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

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

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

2. 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 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. (a) Such dividends, however, 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 if the recipient is the beneficial owner of the

dividends the tax so charged shall not exceed

(i)

5 per cent of the gross amount of the dividends if the beneficial

owner is a company (other than a partnership) which holds

directly at least 25 per cent of the capital of the company paying

the dividends;

(ii) 10 per cent of the gross amount of the dividends in all other cases.

(b) Notwithstanding the provisions of paragraph 2(a), where the dividens

are paid by a company which is a resident of Malta to a resident of the

Republic of San Marino who is the beneficial owner thereof, Malta tax

charged on the gross amount of the dividends, in accordance with its

internal imputation system, shall not exceed that charged on the profits

out of which the dividends are paid.

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

the profits out of which the dividends are paid.

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

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.

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

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

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

through a permanent establishment situated therein, 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 t h e c o m p a n y 's u n d i s t r i b u t e d p r o f i t s , e v e n i f t h e d i v i d e n d s p a i d o r t h 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 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 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, 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

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 software, 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 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.

4. 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 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 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.

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

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

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

State.

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

shares deriving more than 50 per cent of their value directly or indirectly from

immovable property situated in the other Contracting State may be taxed in that

other State.

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

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

alienator is a resident.

Article 14

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. However, such income may be taxed in the other Contracting State

in the following circumstances

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

State for the purpose of performing his activities; in that case, only so

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

that other Contracting State; or

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

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

month period commencing or ending in the fiscal year concerned; in

that case, only so much of the income as is derived from the activity

exercised in the other Contracting State may be taxed 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

INCOME FROM EMPLOYMENT

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 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 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 may be taxed 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 or similar organ of a

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

State.

Article 17

ARTISTES AND 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.

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. The provisions of paragraph 1 shall not apply if the recipient is not subjected

to taxation in respect of such income in the State of which he is a resident and

according to the laws of that State. In such case such income shall be taxable in the

State in which it arises.

3. Notwithstanding the provisions of paragraph 1, pensions and other similar

remuneration paid under provisions of 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,

paid by a Contracting State or a local authority thereof to an individual

in respect of services rendered to that State or authority shall be taxable

only in that State.

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

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

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

(i) is a national of that State; or

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

rendering the services.

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

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

that State or authority 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, 17 and 18 shall apply to salaries, wages

and other similar remuneration, and to pensions, in respect of services rendered in

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

thereof.

Article 20

PROFESSORS AND STUDENTS

1. Remuneration which a resident of a Contracting State receives for

undertaking study or research at a high level or for teaching, during a period not

exceeding two years, at a university, research institute or other similar establishment

for highest or higher education in the other Contracting State, shall not be taxable in

that other State, provided that this remuneration is taxed in the first-mentioned State.

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

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

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

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

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

State.

Article 21

OTHER INCOME

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

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

State.

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

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

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

Contracting State through a permanent establishment situated therein, 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

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 San Marino, the San Marino tax on such income shall be allowed as a

credit against the relative Malta tax payable thereon.

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

(a) Subject to the provisions of the law of San Marino regarding the

allowance of a credit against San Marino tax in respect of foreign tax,

and in accordance with the provisions of this Convention, income tax

paid in Malta shall be allowed as a credit against the relative San

Marino tax payable thereon;

(b) where a resident of San Marino derives income which, in accordance

with the provisions of this Convention, is not taxed in San Marino, San

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

remaining income of such resident, apply the same tax rate which would

apply if the income in question were not exempt.

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. 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 4 of

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

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

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

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

resident of the first-mentioned State.

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

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

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

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

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

mentioned State are or may be subjected.

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 two 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. If an agreement is reached, it shall be implemented notwithstanding any

time limits in the domestic law of the Contracting States.

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

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

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

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

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

each other directly 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 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

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

*as substituted by Legal Notice 192 of 2010.

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

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

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

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

information in public court proceedings or in judicial decisions.

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

impose on a Contracting State the obligation

a)

to carry out administrative measures at variance with the laws and

administrative practice of that or of the other Contracting State;

b)

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

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

State;

c)

to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, or

information the disclosure of which would be contrary to public policy

(ordre public).

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

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

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

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

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

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

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

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

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

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

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

Article 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

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

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

under the provisions of special agreements.

Article 27

REFUNDS

1. Taxes collected in a Contracting State through a withholding tax shall be

refunded upon request of the interested party where the right to levy such taxes is

limited by the provisions of this Convention.

2. Refund claims to be submitted within the time limits set forth in the laws of

the Contracting State which has to make the refund, shall be accompanied by an

official declaration of the Contracting State of which the taxpayer is a resident

stating that such taxpayer meets the requirements to be entitled to the benefits of this

Convention.

3. The competent authorities of the Contracting States shall decide by mutual

agreement, in accordance with the provisions of Article 24 of this Convention, the

mode of application of this Article.

Article 28

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 on the date of the later of the

notifications referred to in paragraph 1 and its provisions shall have effect

(a) in 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 date on which the Convention

enters into force;

(b) in San Marino

in respect of income derived during any taxable year beginning on or

after the first day of January next following that in which this

Convention enters into force.

Article 29

TERMINATION

This Convention shall 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 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 date on which the notice is

given;

(b) in San Marino

in respect of income derived during any taxable year beginning on or

after the first day of January immediately following the date on which

the notice is given.

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

respective Governments, have signed this Convention.

DONE at Valletta this 3rd day of May, 2005 in duplicate in the English and Italian

languages, both texts being equally authentic.

Hon. Dr Michael Frendo

Mr Fabio Berardi

Minister of Foreign Affairs

Secretary of State for Foreign

and Political Affairs

For the Government of

the Republic of San Marino

PROTOCOL

to the Convention between the Government of Malta and the Government of the

Republic of San Marino with respect to taxes on income.

Upon signature of the Convention concluded today between the Government of

Malta and the Government of the Republic of San Marino with respect to taxes on

income, the following additional provisions forming an integral part of this

Convention have been agreed upon.

It is understood that

1. With respect to paragraph 1(e) of Article 3, in San Marino a trust shall be

treated as a body corporate for tax purposes where and only to the extent in which

the income derived or paid by such trust is subject to tax in San Marino.

2. With respect to paragraph 2 of Article 5, a "permanent establishment" may

include a server as commented upon in the Commentary on the OECD Model Tax

Convention on Income and on Capital.

3. With respect to Article 8, profits from the operation of ships or aircraft in

international traffic shall include

(a) profits deriving from the bareboat charter of ships and aircraft operated

in international traffic;

(b) profits deriving from the use or letting of containers where such profits

are occasional and secondary in respect of other profits deriving from

the operation of ships or aircraft in international traffic.

4. The provisions of paragraph 3 of Article 27 shall not prejudice the power of

the competent authorities to determine, by mutual agreement, other procedures for

the application of the limitations set forth in this Convention.

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

respective Governments, have signed this Protocol.

DONE at Valletta this 3rd day of May,2005 in duplicate in the English and Italian

languages, both texts being equally authentic.

Hon. Dr Michael Frendo

Mr Fabio Berardi

Minister of Foreign Affairs

Secretary of State for Foreign

and Political Affairs

For the Government of

Malta

the Republic of San Marino

PROTOCOL *

AMENDING THE CONVENTION BETWEEN

*in force as from the 15th February, 2010.

MALTA AND THE REPUBLIC OF SAN MARINO

WITH RESPECT TO TAXES ON INCOME

The Government of Malta and the Government of the Republic of San Marino

desiring to amend the Convention between Malta and the Republic of San Marino

with respect to Taxes on Income, with Protocol, signed in Valletta on 3 May, 2005

(hereinafter referred to as “the Convention”),

Have agreed as follows

ARTICLE I

The text of Article 25 of the Convention is deleted and replaced by the following