Malta-Austria Double Tax Treaty

Malta and Austria have signed their double tax treaty in 1978. The agreement was enforced in 1981 in both countries. Malta also included the double taxation agreement with Austria in its Income Tax Act. The document covers the following taxes in Austria:

• -          the income tax,
• -          the corporate tax,
• -          the capital gains tax,
• -          the directors’ tax,
• -          the inheritance tax,
• -          the tax on commercial and industrial enterprises,
• -          the land tax,
• -          the tax on agricultural and forestry activities undertaken by companies,
• -          other taxes related to agricultural activities.

In Malta, the agreement covers the income tax. Our consultants in company formation in Malta can provide you with detailed information about the applicability of the double tax agreement with Austria.

Taxation of income under the Malta-Austria double tax treaty

The double taxation convention between Malta and Austria covers both natural persons and legal entities residents of one or both countries. The taxes provided for in the agreement will apply on the income and capital generated by each individual or company in the contracting countries and will be levied by the local authorities. The Malta-Austria double tax treaty also includes the taxation of income resulted from the sale of immovable property.

Special attention is paid to permanent establishments, which are defined as fixed business places in the other state if they operate there for more than 12 months. Our Maltese agents can provide you with information about the sites considered permanent establishments under the double taxation agreement with Austria.

Tax rates under the Malta-Austria double taxation convention

The agreement between Malta and Austria establishes how the avoidance of double taxation will occur in both states, and it also provides for certain reduced tax rates. The Malta-Austria double taxation treaty provides for the following rates:

• -          the tax on dividends paid by an Austrian company to a Maltese one will not exceed 15% of the gross amount of the dividends,
• -          the taxation of dividends paid by a Maltese company to an Austrian one will not exceed 15% of the gross amount of the dividends if these are paid under the provisions of the Income Tax Act,
• -          interest payments will be taxed at a rate 5% of the gross amount of the interest,
• -          royalties will be taxed at a maximum rate of 10% of the gross amount of the royalties.

For complete information about applicable tax rates under the double tax convention with Austria, please contact our agents in Malta.