Malta Clinches DTAs With China, Uruguay

by Lorys Charalambous, Tax-News.com, Cyprus

15 July 2010

The Maltese government announced on July 13 that it had concluded negotiations with China towards revising the convention for the avoidance of double taxation and fiscal evasion the two countries share. The government said the agreement, and another double tax treaty with Uruguay, would be signed during 2010 as part of the territory’s efforts to expand its network of such agreements.

The agreement with China has been negotiated to reflect internationally accepted standards. The text is based on the OECD Model Tax Convention on Income and on Capital and also recent tax treaties concluded by both countries. When ratified the agreement will supersede the existing treaty dating back to February 1993.

Welcoming the prospect of a revised agreement with China, Malta’s Minister for Finance, the Economy and Investment, Tonio Fenech stated: “This agreement will provide investors from both countries with more attractive conditions for investment in Malta or China. Such conditions may also help Chinese investors to tap in a more efficient way into the European market. China is a country which is still growing strongly and offers significant investment potential.”

Alongside provisions to improve the environment for prospective investors, the agreement also contains provisions for the exchange of tax information, in accordance with the internationally agreed standard on transparency and information exchange. The government said the pact would establish better channels for the exchange of information, which would be instrumental in the territories' mutual efforts to prevent fiscal evasion.

Fenech continued:

“The signing of this double tax agreement will be another important milestone in the relations between Malta and China and will contribute to deepen and strengthen already very good relations between our two countries.”

“[The pact] will also strengthen our growing network of over fifty tax treaties; This improves the value of our country to potential investors, which is a key objective in our efforts to attract new and better jobs to our shores.”

The government also announced on July 13 that Malta had agreed upon a text for a further treaty, to be signed with Uruguay this year - the first such agreement that Malta has concluded with a South American country.

As is stipulated in the agreement with China, the text agreed with Uruguay will provide beneficial conditions for Uruguayan and Maltese investors, and will similarly include tax information exchange provisions to aid the two countries’ tax authorities in civil tax matters and in investigations into fiscal crime.

Commenting on the proposed agreement with Uruguay, Fenech stated: “This agreement with Uruguay signals the government’s intention to strengthen economic relations with South American countries and, hopefully, will lead the way to the conclusion of a number of double taxation agreements with other South American countries. South America is a region with a number of very important emerging markets countries that are experiencing important growth rates."

"In the context of widening our horizons in terms of attracting trade and investment, such agreements assume paramount importance,” the Minister concluded.

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