By means of Legal Notice 286 of 2016, the Government of Malta has published the double taxation agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
With respect to dividends, interests and royalties, the two countries have agreed on a shared jurisdiction to tax, with the source country having a primary right to tax while the residence country having a secondary right to tax with the obligation to grant relief from double taxation.
In terms of Article 10 of the said agreement, where the country of residence of the company paying the dividends is Viet Nam, a tax equivalent to 5% of the gross dividends is withheld by such a company if the beneficial owner is a Malta company which holds directly at least 50% of the voting power in the company paying the dividends. The rate is increased to 15% of the gross dividends in all other cases.
With respect to interest (Article 11) arising in Viet Nam and paid to a resident of Malta, tax is withheld by Viet Nam at a rate which should not exceed 10%. Malta does not withhold any tax on payment of interests to non-residents.
With respect to royalties (Article 12) arising in Viet Nam and paid to a resident of Malta, tax is withheld by Viet Nam at rates which should not exceed 5% to 15% depending on the type of royalty payment. Malta does not withhold any tax on payment of royalties to non-residents.