background image

Germany - Malta Tax Treaty (as amended by 2010 protocol) — Orbitax Tax Hub

Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.


The Federal Republic of Germany and Malta have agreed, at the signing at Berlin on 8th March 2001 of the Agreement between the two States for the avoidance of double taxation with respect to taxes on income and on capital, upon the following provisions, which shall form an integral part of the said Agreement.

(1) With reference to Article 7:

  • (a) Where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received therefore by the enterprise but only on the basis of the payments which are attributable to the actual activity of the permanent establishment for such sales or business.
  • (b) In the case of contracts, in particular for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, where the enterprise has a permanent establishment in the other Contracting State, the profits of such permanent establishment shall not be determined on the basis of the total amount of the contract, but only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the Contracting State in which it is situated. Profits derived from the supply of goods to that permanent establishment or profits related to the part of the contract which is carried out in the Contracting State in which the had office of the enterprise is situated shall be taxable only in that State.
  • (c) Payments received as a consideration for technical services, including studies or surveys of a scientific, geological or technical nature, or for engineering contracts including blueprints related thereto, or for consultancy or supervisory services shall be deemed to be payments to which the provisions of Article 7 or Article 14 of the Agreement apply.

(2) With reference to Article 10:

The provisions of paragraph (3) of Article 10 shall continue to apply in Malta as long as Malta operates the full imputation system of taxation of company profits and of the subsequent distribution of such profits to the company's shareholders. Should the present system be changed, the rates referred to in sub-paragraph (a) of paragraph (2) of Article 10 shall apply to dividends distributed by a company which is a resident of Malta to a resident of the Federal Republic of Germany. However, in the event of such change, the Contracting States shall consult each other to consider whether any such change in Malta's system of taxation would necessitate any revision of the provisions of Article 10.

(3) With reference to Articles 10 and 11:

Notwithstanding the provisions of Articles 10 and 11, income derived in the Federal Republic of Germany from rights or debt-claims participating in profits including income of a sleeping partner ("stiller Gesellschafter") from his participation as such or from a "partiarisches Darlehen" or "Gewinnobligationen" that is deductible in determining the profits of the debtor may be taxed in the Federal Republic of Germany according to the laws of the Federal Republic of Germany.

*(4) With reference to Article 26:

(1) If the requesting competent authority confirms that the requested information is "foreseeably relevant" to the purposes mentioned in Article 26 of the Agreement, the requested competent authority shall accept this confirmation provided that the request satisfies the following requirements:

  • (a) the identity of the person under examination or investigation;
  • (b) a statement of the information sought including its nature and the form in which the requesting Contracting State wishes to receive the information from the requested Contracting State;
  • (c) the tax purpose for which the information is sought;
  • (d) grounds for believing that the information requested is held in the requested Contracting State or is in the possession or control of a person within the jurisdiction of the requested Contracting State;
  • (e) to the extent known, the name and address of any person believed to be in possession of the requested information;
  • (f) a statement that the request is in conformity with the law and administrative practices of the requesting Contracting State, that if the requested information was within the jurisdiction of the requesting Contracting State then the competent authority of the requesting Contracting State would be able to obtain the information under the laws of the requesting Contracting State or in the normal course of administrative practice and that it is in conformity with this Agreement;
  • (g) a statement that the requesting Contracting State has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.

(2) The requested information shall also be "foreseeably relevant" in the case of a request for information where the name of the person is unknown and the requesting competent authority confirms to the requested competent authority that it has reasonable grounds for suspecting the existence of criminal tax matters involving assets situated or persons resident in the Contracting States. For the purposes of this paragraph the term "criminal tax matters" means tax matters involving intentional conduct which is liable to prosecution under the criminal laws of the requesting Contracting State.

(3) Insofar as personal data are supplied under Article 26, the following additional provisions shall apply:

  • (a) The data-receiving State may use such data only for the stated purpose and shall be subject to the conditions prescribed by the data-supplying State.
  • (b) The data-receiving State shall on request inform the data-supplying State about the use of the supplied data and the results achieved thereby.
  • (c) Personal data may be supplied only to the competent authorities. Any subsequent supply to other authorities may be effected only with the prior approval of the supplying competent authority.
  • (d) The data-supplying State shall be obliged to ensure that the data to be supplied are accurate and that they are foreseeably relevant for and proportionate to the purpose for which they are supplied. Any bans on data supply prescribed under applicable domestic law shall be observed. If it emerges that inaccurate data or data which should not have been supplied have been supplied, the data-receiving State shall be informed of this without delay. That State shall be obliged to correct or erase such data.
  • (e) Upon application the person concerned shall be informed of the supplied data relating to him and of the use to which such data are to be put. There shall be no obligation to furnish this information if on balance it turns out that the public interest in withholding it outweighs the interest of the person concerned in receiving it. In all other respects, the right of the person concerned to be informed of the existing data relating to him shall be governed by the domestic law of the Contracting State in whose sovereign territory the application for the information is made.
  • (f) The data-receiving State shall bear liability in accordance with its domestic laws in relation to any person suffering unlawful damage as a result of supply under the exchange of data pursuant to this Agreement. In relation to the damaged person, the data-receiving State may not plead to its discharge that the damage had been caused by the data-supplying State.
  • (g) If the domestic law of the data-supplying State provides for special provisions for the erasure of the personal data supplied, that State shall inform the data-receiving State accordingly. Irrespective of such law, supplied personal data shall be erased once they are no longer required for the purpose for which they were supplied.
  • (h) The Contracting States shall be obliged to keep official records of the supply and receipt of personal data.
  • (i) The data-supplying and the data-receiving States shall be obliged to take effective measures to protect the personal data supplied against unauthorised access, unauthorised alteration and unauthorised disclosure.

(5) With reference to Article 27:

It is understood that in the case of Malta the persons who enjoy a special fiscal treatment referred to in paragraph (2) of Article 27 are the following:

  • (a) persons who are entitled to a special tax benefit under the Malta Financial Services Centre Act (Cap. 330) except for those persons who opt under section 41 of the said Act to be subject to the normal provisions of the income Tax Act (Cap. 123) and the Income Tax Management Act, 1994; or
  • (b) persons who and to the extent to which under the provisions of the merchant Shipping Act, 1973 are not subject to tax on the profits derived from the operation of ships in international traffic; or
  • (c) persons entitled to any special tax benefit in respect of distributions by a trust subject to the provisions of the Trusts Act given that a trust as laid down in that Act is not vested with legal personality and therefore cannot benefit under this Agreement in its own right; or
  • (d) persons entitled to any special tax benefit under any substantially similar law subsequently enacted which is considered in mutual agreement by the competent authorities of the Contracting States as special fiscal treatment within the meaning of paragraph (2) of Article 27 of this Agreement.

DONE at Berlin this 8th day of March 2001 in two originals, each in the German and English languages, both texts being equally authentic.