Malta Signs Double Tax Treaty with Curacao

After negotiating a double tax treaty with the Netherlands with respect to the island of Curacao several years back, at the end of November 2015 Malta and Netherlands have also signed to agreement which will be enforced beginning with the 1^st of January 2016. The treaty was drafted according to the Organization for Economic Co-operation and Development Model Convention.

What are the taxes covered by Malta’s agreement with Curacao?

The double tax treaty Malta signed with the small Caribbean island, applies to the income tax levied in both countries. The agreement covers the total income or elements composing the income, such as capital gains and salaries. The double tax treaty covers the income tax levied in Malta and the following taxes in the case of Curacao:

• -          the income tax,
• -          the salaries tax,
• -          the profit tax,
• -          the dividend tax.

Other similar taxes are also subject to the double tax treaty between Malta and Curacao. The document specifies that the agreement covers all Maltese islands and all taxes will be levied based on the fiscal domicile of the individual or company paying the taxes.

Special provisions in the double tax treaty between Malta and Curacao

Like all Malta’s double tax treaties, the one with Curacao also contains a special provision with respect to permanent establishments. Any company registered in one of the contracting states with a place of management or other site located in the other country is deemed to have a permanent establishment there if the site operates for more than 12 months. The agreement also provides for exceptions from the permanent establishment status. You can find out more about the permanent establishment status from our specialists in company formation in Malta. Other special provisions in the double tax treaty between Malta and Curacao refer to:

• -          non-discrimination,
• -          exchange of information,
• -          mutual agreement proceedings.

The convention also provides for several methods for the elimination of double taxation in Malta and Curacao. The double taxation treaty Malta and Curacao signed also provides for several reduced rates, among which the tax rate for dividend payments varies between 0 and 5%.

For complete information about the provisions of the double taxation treaty with Curacao, you can contact our Maltese experts.