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Liechtenstein, Malta Sign DTA

by Ulrika Lomas,, Brussels

04 October 2013

Liechtenstein's Foreign Minister Aurelia Frick and her Maltese counterpart George Vella have recently signed in New York a bilateral double taxation agreement (DTA) between the two countries in respect of taxes on income and on wealth.

The treaty is based on the Organization for Economic Cooperation and Development's Model Convention and reflects the current agreement policies of both treaty partner states.

The accord contains provisions clarifying and governing the entitlement to tax treaty benefits of Liechtenstein pension funds, charitable organizations, and investment funds. Furthermore, both countries have agreed within the framework of the DTA to waive withholding taxes on dividends, interest, and royalties. In addition, the treaty guarantees national taxing rights for the taxation of natural persons, and includes an information exchange clause in accordance with the international standard. The residency of trusts is regulated separately.

Finally, the DTA makes provision for an arbitration clause to ensure that within the framework of a specified process, a binding solution is achieved for both treaty partner states in the event of an interpretation or application dispute, thereby increasing legal certainty for investors.

The accord requires the parliamentary approval of both contracting jurisdictions. No additional legislative measures are required for implementation of the treaty, which is expected to apply from January 1, 2014.

Following the conclusion of this agreement, the Liechtenstein Government underlined its commitment to further expanding the Principality's DTA network, both within and outside of Europe.

TAGS: tax | investment | double tax agreement (DTA) | Malta | interest | royalties | trusts | investment funds | Organisation for Economic Co-operation and Development (OECD) | Liechtenstein | agreements | tax rates | withholding tax | dividends | individual income tax | Europe

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