Malta added Switzerland to its list of double taxation agreements in 2012 after the Swiss Government announced the ratification of the convention. The agreement was enforced in 2013. The convention follows the Organization for Economic Co-operation and Development Model Tax Convention and contains provisions about the exchange of tax information. The taxes covered by the double taxation agreement between Malta and Switzerland are:
The convention also applies to similar taxes collected in both countries. However, the agreement does not cover the taxation of lottery prizes. The tax agreement between Malta and Switzerland covers both natural persons and Swiss and Maltese companies.
The double taxation treaty between Malta and Switzerland covers the income arisen from different types of sources. Among these:
With respect to the taxation of income resulted from immovable property, the Maltese-Swiss double taxation agreement covers incomes derived from agriculture and forestry activities. The agreement also refers to the exemption on taxation of dividends and interests between associated Swiss and Maltese companies holding at least 10% of the capital in the company paying the dividends and interests. Royalties are also exempt from taxation under treaty.
In Malta, double taxation is avoided by granting a credit against the Maltese tax related to the imposition of the Swiss tax. In Switzerland, the avoidance of double taxation will be achieved through several methods:
Swiss companies paying taxes in Malta will also be granted a tax relief equal to the tax the company would pay in Switzerland.
For complete information about the tax rates applicable under the double taxation treaty with Switzerland, please contact our agents in Malta.