Malta’s Double
Tax Treaties
Malta has developed one of the most extensive and business-friendly double tax treaty networks in Europe, designed to eliminate the double taxation of income and encourage international investment. The treaties, alongside Malta’s domestic tax relief mechanisms, ensure that income is not taxed twice – once in Malta and once in the foreign source country.
Treaty Network
Overview
As of 2025, Malta maintains over 80 double tax treaties in force with major economies worldwide, based largely on the OECD Model Convention. These agreements allocate taxing rights between Malta and the treaty partner for income such as dividends, interest, royalties, employment income, and pensions. Key partner countries include the United Kingdom, United States, Canada, Australia, China, India, Germany, France, Italy, and the UAE.
In addition to the treaties, Malta has several Tax Information Exchange Agreements (TIEAs) with jurisdictions such as the Bahamas, Bermuda, the Cayman Islands, Gibraltar, and the United States, ensuring compliance with international transparency standards.
Relief
Mechanisms
Malta uses primarily the credit method for double tax relief. This allows Maltese residents to claim a credit for foreign tax paid, reducing Maltese tax payable on the same income. The credit cannot exceed the Maltese tax liability on that income.
Where no treaty exists, unilateral relief is available under Maltese law, allowing a foreign tax credit for taxes actually paid abroad. Companies can also claim an underlying tax credit for corporate tax paid by foreign subsidiaries when repatriating dividends.
In addition, Malta offers a Flat Rate Foreign Tax Credit (FRFTC) system, which allows companies to claim a deemed 25% foreign tax credit on gross foreign income before computing Maltese tax, making the system highly attractive for international group structures.
Withholding
Tax Treatment
Except in very limited circumstances, Malta does not impose withholding tax on dividends, interest, or royalties paid to non-residents, provided the non-resident does not have a Maltese permanent establishment.
Capital gains derived by non-residents from the disposal of securities in Maltese companies are also exempt, except when the company’s assets consist of Maltese immovable property.
Strategic
Importance
Malta’s double taxation network, EU membership, and tax refund system (reducing the effective corporate tax rate to as low as 5%) make it a leading jurisdiction for international structuring, holding companies, and expatriate planning.
Combined with full compliance with OECD and EU anti-abuse standards, Malta provides one of the most transparent yet efficient tax treaty networks globally.
In summary, Malta’s double tax treaties – spanning Europe, the Americas, Asia, the Middle East, and Africa – form a cornerstone of the island’s financial services strategy. Malta’s double tax treaties ensure tax efficiency, predictability, and legal certainty for both businesses and individuals operating internationally.
Acumum’s Malta tax accountants and Malta tax advisers can help guide you through the complexities of tax structuring with the aim of optimum tax efficiency.
Please contact us for more information.
