New Treaty with The Federal Democratic Republic of Ethiopia

By means of LN 182 of 2018, the Government of Malta has published the text of a new double taxation agreement with Ethiopia.  In terms of Articles 11 and 12 of the treaty, the two countries have agreed to have a shared jurisdiction to tax on interest and royalties.  With respect to these two types […]

Written By ACT Team

On June 8, 2018
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By means of LN 182 of 2018, the Government of Malta has published the text of a new double taxation agreement with Ethiopia.  In terms of Articles 11 and 12 of the treaty, the two countries have agreed to have a shared jurisdiction to tax on interest and royalties.  With respect to these two types of income, the source country (i.e. the State in which the interest and the royalties arise) will have a primary right to tax while the residence country of the recipient of the income will have a secondary right to tax with the obligation to grant relief from double taxation. 

With respect to dividends, Article 11 stipulates that the two countries may tax such income with the country in which the company paying the dividends is resident having a primary right to tax while the country of residence of the recipient will have a secondary right to tax with the obligation to grant relief from double taxation.  Notwithstanding this, Ethiopia will limit its withholding taxing rights to 5% of the gross dividends.  Malta on the other hand does not withhold any tax on distribution of dividends by Maltese companies to recipients resident in Ethiopia. 

The treaty is not yet in force. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].