US Unimpressed With Malta’s Plea For New Double Tax Agreement

by Robert Lee, Tax-News.com, London

09 May 2005

A Maltese governmental delegation to the United States has conceded that it faces a difficult task in trying to persuade US officials of the merits of a Double Taxation Avoidance Agreement with the Mediterranean island, despite the "intense and successful" visit.

The delegation, led by Jason Azzopardi, Chairman of the Standing Committee on Foreign and European Affairs, held 27 meetings in a seven day visit to the US. The itinerary included the White House, the State and Treasury departments and Congress.

The delegation was intended to raise awareness of a number of issues, including investment, tourism and the resurrection of the bilateral DTAA, which was abrogated by the US government in 1997 due to concerns over the regulation of Malta's financial system.

Malta is the only member of the European Union not to have a DTAA with the United States, something that Azzopardi argued not only hinders bilateral trade, but puts Malta at a competitive disadvantage. He also stressed that Malta has taken large steps on the regulatory front to reduce the threats posed by money laundering and other financial crime.

In an attempt to win over the US government, the Maltese delegation pointed to Malta's DTAA with Libya - the only EU nation to have such an agreement in place with the oil producing African state - which could benefit American oil and gas firms seeking to invest in Libya.

US government officials are said to be considering the issue, although nothing concrete has been forthcoming from Washington regarding a new DTAA with Malta.

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