The tax treaty also contains «standard articles» relating to the elimination of double taxation (according to the credit method), the mutual agreement procedure (MAP) and the exchange of information. Maltese Foreign Minister Tonio Borg said the signing was an important development in bilateral relations with Ireland and would strengthen the network of tax agreements already in place with other European countries. He said the agreement was the result of long and intense technical negotiations. The abolition of double taxation is provided for as part of the credit method. As with other tax treaties, the treaty contains standard articles on the procedure of mutual agreement and the exchange of information. Bulgaria Bulgarian tax treaty and international agreements Malta does not levy withholding tax. The abolition of double taxation is done according to the credit method. The Double Taxation Agreement between Ireland and Malta will have a positive impact on foreign property investors and those wishing to trade between the two countries. On 14 November 2008, after bitter negotiations, Malta signed its first agreement with Ireland to avoid double taxation. The convention was signed in Rome by Ambassadors Walter Balzan and Sean O`Huiginn on behalf of their respective governments.
The treaty was ratified by both states on 15 January 2009 and came into force on 1 January 2010. Malta transposed the treaty into national law through the legal references 502 of 2008. The MLI is an OECD initiative to provide governments with concrete solutions to fill gaps in existing international tax legislation by translating the results of the OECD/G20 BEPS project into bilateral tax agreements around the world. The MLI addresses issues related to transparent entities, dual resident units, methods of eliminating double taxation and contractual abuses. The Irish Ministry of Finance has announced the signing of an agreement between the Commissioners in charge of taxation and the Maltese tax administration to prevent single malt structures. The structure, which is often used by U.S. companies to reduce tax debt, involves placing intellectual property in an Irish-based company, considered a resident of Malta because of its effective management, and then transferring payments for related sales through another Irish-based company, which pays deductible royalties to the Malta-based company. The agreement enters into force from the date the multilateral instrument enters into force in Ireland and Malta from the date the Multilateral Instrument (IML) enters into force from the date the Multilateral Instrument (IML) enters into force in Ireland and Malta. Malta approved its agreement with reservations with respect to the MLI by subsidiary law 123.183 and ratified the LML on 18 December 2018.
The island offers an excellent service and communication infrastructure to international companies and offers the benefits of an exemplary regulatory environment and a network of some 60 double taxation agreements. Malta has a lot to offer; stable government, a good tax system, an infrastructure of excellence, qualified English-speaking staff and an enviable lifestyle with a mild climate.