The first round of negotiations are expected to take place March 24th to 26th in Valletta, Malta.

The US Treasury Department stated last week that it is inviting written comments from the public regarding the upcoming negotiations.

Delivering a speech on the topic on Friday, Tonio Fenech, Parliamentary Secretary with the Maltese Ministry of Finance, revealed that:

"Following the 2005 meeting between Prime Minister Gonzi and President Bush, our two teams, that of the Ministry of Finance and that of the US Treasury, started informal meetings to develop a double taxation agreement. A number of meetings have taken place in Washington and various exchanges and a lot of background work has taken place remotely."

"These discussions and the follow-up work have been successful so that now we have reached the concluding phase. The detail has been largely agreed but this is under wraps so to speak. We will, of course, publish the entire treaty at the appropriate moment in agreement with the US Treasury and the US Senate Committee for Foreign Relations."

He continued:

"It is normal for countries to spend time agreeing the detail of a tax treaty through informal negotiations or discussions. I can tell you that we are doing this in parallel with other countries to bring about both changes and new treaties into our existing network."

"The next step is to then move to the formal phase when everybody is comfortable with the outcome. We have arrived at this milestone with the USA so that a quick formal negotiation phase may take place leading to treaty initialling and ratification."

Mr Fenech went on to observe that:

"The USA makes a welcome addition to our tax treaty network. We have treaties with over 46 countries to date with more in the pipeline. These ensure the removal of any potential trade barriers between our respective countries by establishing internationally accepted provisions for the avoidance of double taxation on the same income. They also establish appropriate channels for exchange of tax information between our respective countries in our mutual efforts to prevent fiscal evasion."

"Our relations with the USA are truly excellent and getting better by the day. On the political front, the spirit of cooperation has been extremely good with multiple initiatives delivered, or in train, that make Malta a safer and better place to live in and invest in. We also enjoy good economic relations with the US which can only get better with this treaty."

"We always believed that our country has the potential to attract high quality investment from the USA. Foreign Direct Investment into Malta has been strong under this government and we have continually strived to build a solid basis for investment through a valuable network of excellent political, social and economic relations with our partner countries."

He further stated:

"I must thank the US Senate and the US Treasury for their support throughout this process. The time we have spent with our US colleagues have given us the opportunity to explain Malta’s regulatory regime, Malta’s tax system which is now endorsed by the European Union, as well as the relative areas of Malta’s legislation."

"The USA and Malta already have well established information exchange links through international networks and bodies combating tax fraud, terrorist financing and other forms of criminal activity. Malta is a clean jurisdiction and jealously guards its reputation. This is resulting in a fast expanding financial industry backed up by leading names in the global industry."