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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Malta: Article 22: Elimination of double taxation

Paragraph 1 of Article 22 of the agreement should read as follows:

“1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):

(a) Malta tax payable under the laws of Malta and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Malta (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income, or chargeable gains by reference to which the Malta tax is computed;

(b) in the case of a dividend paid by a company which is a resident of (Malta to a company which is a resident of (see Note below)) the United Kingdom and which controls directly or indirectly at least 10% of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Malta tax for which credit may be allowed under the provisions of subparagraph (a) of this paragraph) the Malta tax payable by the company in respect of the profits out of which such dividend is paid.”

The words “Malta to a company which is a resident of” in paragraph 1(b) of Article 22 were included in the text of the Convention signed by the United Kingdom and Malta on 12 May 1994. However, the words were inadvertently omitted from the published text as it appears in the Schedule to the Statutory Instrument 1995 No. 763. HMRC will apply Article 22(1)(b) in line with the full text of the signed Convention.