THE NETHERLANDS [ S.L.123.10 SUBSIDIARY LEGISLATION 123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS ORDER 31st October, 1980 LEGAL NOTICE 90
1980, as amended by Legal Notice 146
1999, as modified by S.L.123.183 . 1. The title
this Order is Double Taxation Relief on Taxes on Income with the Kingdom
the Netherlands Order. 2. It is hereby declared (a) that the arrangements specified in the Agreement set out in the Schedule to this Order have been made with the Government
the Kingdom
the Netherlands with a view to affording relief from double taxation and preventing fiscal evasion in relation to the following taxes imposed by the laws
the Kingdom
the Netherlands: (
THE NETHERLANDS DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 3 SCHEDULE AGREEMENT BETWEEN MALTA AND THE KINGDOM
THE NETHERLANDS FOR THE AVOIDANCE
DOUBLE TAXATION AND THE PREVENTION
FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL Malta and the Kingdom
the Netherlands, desiring to conclude an agreement for the avoidance
double taxation and the prevention
fiscal evasion with respect to taxes on income and on capital, have agreed as follows: CHAPTER I Scope
the Agreement ARTICLE 1 Personal Scope This Agreement shall apply to persons who are residents
one or both
the States. ARTICLE 2 Taxes Covered
each
the States or
its political subdivisions or local authorities, irrespective
the manner in which they are levied.
income or
capital, including taxes on gains from the alienation
movable or immovable property, taxes on the total amounts
wages or salaries paid by enterprises, as well as taxes on capital appreciation.
the Netherlands: - income tax (de inkomstenbelasting); wages tax (de loonbelasting); company tax (de vennootschapsbelasting); dividend tax (de dividendbelasting); capital tax (de vermogensbelasting); (hereinafter referred to as "Netherlands tax"); (b) in the case
Malta: the income tax and surtax, including prepayments
tax whether made by deduction at source or otherwise, (hereinafter referred to as "Malta tax").
signature
this Agreement in addition to, or in place
, the existing taxes. The competent authorities
the States shall notify to each other any substantial changes which have been made in their respective taxation laws. [ S.L.123.10 4 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS
this Agreement income is relieved from tax in one
the States, either in full or in part, and, under the law in force in the other State, a person, in respect
the said income, is subject to tax by reference to the amount thereof which is remitted to or received in that other State and not by reference to the full amount thereof, then the relief to be allowed under this Agreement in the first-mentioned State shall apply to so much
the income as is remitted to or received in the other State. CHAPTER II Definitions ARTICLE 3 General Definitions
the Kingdom
the Netherlands that is situated in Europe and the part
the sea-bed and its subsoil under the North-Sea, over which the Kingdom
the Netherlands has sovereign rights in accordance with international law; (c) the term "Malta" means the Republic
Malta, and, when used in a geographical sense, means the Island
Malta, the Island
Gozo and the other islands
the Maltese archipelago, including the territorial waters thereof, and any area outside the territorial sea
Malta which, in accordance with international law, has been or may hereafter be designated, under the laws
Malta concerning the Continental Shelf, as an area within which the rights
Malta with respect to the seabed and subsoil and their natural resources may be exercised; (d) the term "person" comprises an individual, a company and any other body
persons; (
one
the States" and "enterprise
the other State" mean respectively an enterprise carried on by a resident
one
the States and an enterprise carried on by a resident
the other State; (
the Netherlands, any individual possessing the nationality
the Netherlands and any legal person, partnership or association deriving its status as such from the law in force in the Netherlands; (ii) in respect
Malta, any citizen
Malta as provided for in Chapter III
the Constitution
Malta and in the Maltese Citizenship Act, and any legal person, partnership or association deriving its status as such from the law in force in Malta; (h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise which has its place
effective management in one
the States, except when the ship or aircraft is operated solely between places in the other State; (i) the term "competent authority" means: DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS (i) [ S.L.123.10 5 in the case
the Netherlands, the Minister
Finance or his authorized representative; (ii) in the case
Malta, the Minister responsible for finance or his authorized representative.
this Agreement by either
the States, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws
that State relating to the taxes which are the subject
this Agreement. ARTICLE 4 Fiscal Domicile
this Agreement, the term "resident
one
the States" means any person who, under the law
that State, is liable to taxation therein by reason
his domicile, residence, place
management or any other criterion
a similar nature. The term does not include any person who is liable to tax in that State in respect only
income from sources therein or capital situated in that State.
this Agreement an individual, who is a member
a diplomatic or consular mission
one
the States in the other State or in a third State and who is a national
the sending State, shall be deemed to be a resident
the sending State if he is submitted therein to the same obligations in respect
taxes on income and capital as are residents
that State.
the provisions
paragraph
both States, then his status shall be determined as follows: (a) he shall be deemed to be a resident
the State in which he has a permanent home available to him. If he has a permanent home available to him in both States, he shall be deemed to be a resident
the State with which his personal and economic relations are closest (centre
vital interests); (b) if the State in which he has his centre
vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident
the State in which he has an habitual abode; (c) if he has an habitual abode in both States or in neither
them, he shall be deemed to be a resident
the State
which he is a national; (d) if he is a national
both States or
neither
them the competent authorities
the States shall settle the question by mutual agreement.
the provisions
paragraph
both States, then it shall be deemed to be a resident
the State in which its place
effective management is situated. ARTICLE 5 Permanent Establishment
this Agreement, the term "permanent establishment" means a fixed place
business in which the business
the enterprise is wholly or partly carried on.
management; [ S.L.123.10 6 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS (
fice; (
extraction
natural resources; (g) a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or activity continues for more than twelve months.
facilities solely for the purpose
storage, display or delivery
goods or merchandise belonging to the enterprise; (b) the maintenance
a stock
goods or merchandise belonging to the enterprise solely for the purpose
storage, display or delivery; (c) the maintenance
a stock
goods or merchandise belonging to the enterprise solely for the purpose
processing by another enterprise; (d) the maintenance
a fixed place
business solely for the purpose
purchasing goods or merchandise, or for collecting information, for the enterprise; (e) the maintenance
a fixed place
business solely for the purpose
advertising, for the supply
information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.
the States on behalf
an enterprise
the other State - other than an agent
an independent status to whom paragraph
the enterprise, unless his activities are limited to the purchase
goods or merchandise for the enterprise.
one
the States shall not be deemed to have a permanent establishment in the other State merely because it carries on business in that other State through a broker, general commission agent or any other agent
an independent status, where such persons are acting in the ordinary course
their business.
one
the States controls or is controlled by a company which is a resident
the other State, or which curries on business in that other State (whether through a permanent establishment or otherwise), shall not
itself constitute either company a permanent establishment
the other. CHAPTER III DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 7 Taxation
income ARTICLE 6 Income from Immovable Property
the State in which the property in question is situated. The term shall in any case include property accessory to immovable property, rights to which the provisions
general law respecting landed property apply, usufruct
immovable property and rights to variable or fixed payments as consideration for the working
, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.
paragraph
immovable property.
paragraphs
an enterprise and to income from immovable property used for the performance
professional services. ARTICLE 7 Business Profits
an enterprise
one
the States shall be taxable only in that State unless the enterprise carries on business in the other State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits
the enterprise may be taxed in the other State but only so much
them as is attributable to that permanent establishment.
paragraph
one
the States carries on business in the other State through a permanent establishment s i tu a te d t h e r e i n, t h e r e s h a l l i n ea c h St a t e b e at t r i b ut e d t o t ha t p e r m a n e n t establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise
which it is a permanent establishment.
the profits
a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes
the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.
the States to determine the profits to be attributed to a permanent establishment on the basis
an apportionment
the total profits
the enterprise to its various parts, nothing in paragraph
apportionment adopted shall, however, be such that the result shall be in accordance with the principles embodied in this Article.
the mere purchase by that permanent establishment
goods or merchandise for the enterprise. [ S.L.123.10 8 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS
the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
income which are dealt with separately in other Articles
this Agreement, then the provisions
those Articles shall not be affected by the provisions
this Article. ARTICLE 8 Shipping and Air Transport
ships or aircraft in international traffic shall be taxable only in the State in which the place
effective management
the enterprise is situated.
effective management
a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the State in which the home harbour
the ship is situated, or, if there is no such home harbour, in the State
which the operator
the ship is a resident.
paragraph
one
the States participates directly or indirectly in the management, control or capital
an enterprise
the other State, or (b) the same persons participate directly or indirectly in the management, control or capital
an enterprise
one
the States and an enterprise
the other State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one
the enterprises, but, by reason
those conditions, have not so accrued, may be included in the profits
that enterprise and taxed accordingly. .
one
the States has been charged to tax in that State are also included in the profits
an enterprise
the other State and taxed accordingly and the profits so included are profits which would have accrued to that enterprise
the other State if the conditions made between the enterprises had been those which would have been made between independent enterprises, then the first mentioned State shall make an appropriate adjustment to the amount
tax charged on those profits in the first-mentioned State. In determining such an adjustment due regard shall be had to the other provisions
this Agreement in relation to the nature
the income, and for this purpose the competent authorities
the States shall if necessary consult each other. ARTICLE 10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 9 Dividends
one
the States to a resident
the other State may be taxed in that other State.
the Netherlands to a resident
Malta may also be taxed in the Netherlands, and according to Netherlands law, but, if the recipient is the beneficial owner
the dividends, the tax so charged shall not exceed: (a) 5 per cent
the gross amount
the dividends if the recipient is a company which holds directly at least 25 per cent
the capital
the company paying the dividends; (b) 15 per cent
the gross amount
the dividends, in all other cases. This paragraph shall not affect the taxation
the company in respect
the profits out
which the dividends are paid.
Malta to a resident
the Netherlands who is the beneficial owner thereof shall be exempt from any tax in Malta which is chargeable on dividends in addition to the tax chargeable in respect
the profits
the company. Furthermore, Malta tax chargeable with respect to distributed profits
the company shall not exceed 15 per cent
the gross amount thereof, if the distributed profits consist
gains or profits earned in any year in respect
which that company is in receipt
any benefit under the provisions regulating aids to industries in Malta, and the profits are distributed to a company which is a resident
the Netherlands and which is not charged to Netherlands company tax with respect to such profits: provided that the receiving company submits returns and accounts to the taxation authorities
Malta in respect
its income liable to Malta tax for the relative year
assessment. This paragraph shall not affect the taxation
the company in respect
the profits out
which distributions are made, but the recipient
any distributed profits shall be entitled to any refund which may be available under the law
Malta on account
the tax paid by the company, if the tax so paid is in excess
that chargeable on the distributed profits in accordance with the provisions
this paragraph or
the law
Malta.
the State
which the company making the distribution is a resident.
paragraphs
the dividends, being a resident
one
the States, carries on business in the other State
which the company paying the dividends is a resident, through a pe r m a ne n t e s t a b l is h m e n t s i t u a t e d t h e r e i n , o r pe r f o r m s i n t h a t oth e r St a t e professional services from a fixed base situated therein, and the holding in respect
which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions
one
the States derives profits or income from the other State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident
that other State or insofar as the holding in respect
which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax 10 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly
profits or income arising in such other State. ARTICLE 11 Interest
the States and paid to a resident
the other State may be taxed in that other State.
that State, but if the recipient is the beneficial owner
the interest, the tax so charged shall not exceed 10 per cent
the gross amount
the interest.
paragraph
the Netherlands, the Nederlandse Financieringsmaatschappij voor Ontwikkelingslanden N.V. (Netherlands finance company for developing countries), and the Nederlandse Investeringsbank voor Ontwikkelingslanden N.V. (Netherlands investment bank for developing countries) shall be exempt from Malta tax; (b) interest arising in the Netherlands and paid to the Malta Government, the Central Bank
Malta or the Malta Development Corporation shall be exempt from Netherlands tax; (c) the exemptions granted by this paragraph shall also apply to any other statutory body
one
the States if such body possesses a distinct legal personality.
every kind whether or not secured by mortgage, as well as all other income assimilated to income from money lent by the taxation law
the State in which the income arises.
paragraphs
the interest, being a resident
one
the States, carries on business in the other State in which the interest arises, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the debt-claim in respect
which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions
the States when the payer is that State itself, a political subdivision, a local authority or a resident
that State. Where, however, the person paving the interest, whether he is a resident
one
the States or not, has in one
the States a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.
them and some other person, the amount
the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 11 would have been agreed upon by the payer and the recipient in the absence
such relationship, the provisions
this Article shall apply only to the last-mentioned amount. In that case, the excess part
the payments shall remain taxable according to the law
each State, due regard being had to the other provisions
this Agreement. ARTICLE 12 Royalties
the States and paid to a resident
the other State shall be taxable only in that other State if such resident is the beneficial owner
the royalties and the royalties consist
payments
any kind received as consideration for the use
, or the right to use, any copyright
literary, artistic or scientific work.
the States and paid to a resident
the other State may be taxed in that other State if the royalties consist
payments
any kind received as a consideration for the use
, or the right to use, cinematographic films or tapes for television or broadcasting, any patent, trade mark, design, model, plan, secret formula or process, industrial, commercial or scientific equipment, or information concerning industrial, commercial or scientific experience. However, such royalties may also be taxed in the State in which they arise, and according to the law
that State, but if the recipient is the beneficial owner
the royalties, the tax so charged shall not exceed 10 per cent
the gross amount
such royalties.
paragraphs
the royalties, being a resident
one
the States, carries on business in the other State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the right or property in respect
which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions
the States when the payer is that State itself, a political subdivision, a local authority or a resident
that State. Where, however, the person paying the royalties, whether he is a resident
one
the States or not, has in one
the States a permanent establishment in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated.
them and some other person, the amount
the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence
such relationship, the provisions
this Article shall apply only to the last-mentioned amount. In that case, the excess part
the payments shall remain taxable according to the law
each State, due regard being had to the other provisions
this Agreement. ARTICLE 13 Limitation
Articles 10, 11 and 12 International organizations, organs and
ficials thereof and members
a diplomatic or consular mission
a third State, being present in one
the States, are not entitled, in the other State, to the reductions or exemptions from tax provided for in Articles 10, 11 and 12 in respect
the items
income dealt with in these 12 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS Articles and arising in that other State, if such items
income are not subject to a tax on income in the first-mentioned State. ARTICLE 14 Capital Gains
immovable property, as defined in paragraph
movable property forming part
the business property
a permanent establishment which an enterprise
one
the States has in the other State, or
movable property pertaining to a fixed base available to a resident
one
the States in the other State for the purpose
performing professional services, including such gains from the alienation
such a permanent establishment (alone or together with the whole enterprise) or
such a fixed base, may be taxed in the other State.
paragraph
ships and aircraft operated in international traffic or
movable property pertaining to the operation
such ships and aircraft, shall be taxable only in the State in which the place
effective management
the enterprise is situated. For the purposes
this paragraph the provisions
paragraph
any property other than those mentioned in paragraphs
which the alienator is a resident.
paragraph
each
the States to levy according to its own law a tax on gains from the alienation
shares or "jouissance" rights in a company which is a resident
that State, derived by an individual who is a resident
the other State but has been a resident
the firstmentioned State in the course
the last five years preceding the alienation
the shares or "jouissance" rights. ARTICLE 15 Independent Personal Services
one
the States in respect
professional services or other independent activities
a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other State for the purpose
performing his activities. If he has such a fixed base, the income may be taxed in the other State but only so much
it as is attributable to that fixed base. A resident
one
the States performing such professional services or other independent activities in the other State shall be deemed to have such a fixed base available to him in that other State if he is present in that other State for a period or periods exceeding in the aggregate 183 days in the calendar year concerned.
physicians, lawyers, engineers, architects, dentists and accountants. ARTICLE 16 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 13 Dependent Personal Services
Articles 17, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident
one
the States in respect
an employment shall be taxable only in that State unless the employment is exercised in the other State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
paragraph
one
the States in respect
an employment exercised in the other State shall be taxable only in the first-mentioned State if (
, an employer who is not a resident
the other State; and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
this Article remuneration derived by a resident
one
the States in respect
an employment exercised aboard a ship or aircraft in international traffic shall be taxable only in that State. ARTICLE 17 Directors’ Fees
the Netherlands in his capacity as a member
the board
directors
a company which is a resident
Malta may be taxed in Malta.
Malta in his capacity as a "bestuurder" or a "commissaris"
a company which is a resident
the Netherlands may be taxed in the Netherlands. ARTICLE 18 Artistes and Athletes
Articles 15 and 16, income derived by entertainers, such as theatre, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such, may be taxed in the State in which these activities are exercised.
personal activities as such
an entertainer or athlete accrues not to that entertainer or athlete himself but to another person, that income may, notwithstanding the provisions
Articles 7, 15 and 16, be taxed in the State in which the activities
the entertainer or athlete are exercised. ARTICLE 19 Pensions, Annuities and Social Security Payments
paragraph
, pensions and other similar remuneration paid to a resident
one
the States in consideration
past employment and any annuity shall be taxable only in that State.
a periodical nature and it is paid in consideration
past employment exercised in the other State, or where 14 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS instead
the right to annuities a lump sum is paid, this remuneration or this lump sum may be taxed in the State in which it arises.
a social security system
one
the States to a resident
the other State may be taxed in the first-mentioned State.
time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth. ARTICLE 20 Government Service
the States or a political subdivision or a local authority thereof to any individual in respect
services rendered to that State or subdivision or local authority thereof may be taxed in that State. (b) However, such remuneration shall be taxable only in the other State if the services are rendered in that State and the recipient is a resident
that other State who (i) is a national
that State; or (ii) did not become a resident
that State solely for the purpose
performing the services.
funds created by, one
the States or a political subdivision or a local authority thereof to any individual in respect
services rendered to that State or subdivision or local authority thereof may be taxed in that State. (b) However, such pension shall be taxable only in the other State if the recipient is a national
and a resident
that State.
Articles 16, 17 and 19 shall apply to remuneration or pensions in respect
services rendered in connection with any trade or business carried on by one
the States or a political subdivision or a local authority thereof. ARTICLE 21 Professors and Teachers
one
the States and who is present in the other State for the purpose
teaching or scientific research for a maximum period
two years in a university, college or other establishment for teaching or scientific research in that other State, receives for such teaching or research, shall be taxable only in the first-mentioned State.
a specific person or persons. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 15 ARTICLE 22 Students and Trainees
one
the States immediately before visiting the other State and is temporarily present in that other State solely as a student at a university, college, school or other similar educational institution in that other State or as a business apprentice shall, from the date
his first arrival in that other State in connection with that visit, be exempt from tax in that other State (a) on all remittances from abroad for purposes
his maintenance, education or training; and (b) for a period not exceeding in the aggregate five years, on any remuneration not exceeding 5000 guilders, or the equivalent in Malta currency, for each calendar year for personal services rendered in that other State with a view to supplementing the resources available to him for such purposes.
one
the States immediately before visiting the other State and is temporarily present in that other State solely for the purpose
study, research or training as a recipient
a grant, allowance or award from a scientific, educational, religious or charitable organisation or under a technical assistance programme entered into by the Government
one
the States shall, from the date
his first arrival in that other State in connection with that visit, be exempt from tax in that other State (a) on the amount
such grant, allowance or award, and (b) on all remittances from abroad for the purposes
his maintenance, education or training. ARTICLE 23 Other Income
income
a resident
one
the States, wherever arising, not dealt with in the foregoing Articles
this Agreement shall be taxable only in that State.
paragraph
the income, being a resident
one
the States, carries on business in the other State through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the right or property in respect
which the income is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions
the business 16 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS property
a permanent establishment
an enterprise, or by movable property pertaining to a fixed base used for the performance
professional services, may be taxed in the State in which the permanent establishment or fixed base is situated.
paragraph
such ships and aircraft shall be taxable only in the State in which the place
effective management
the enterprise is situated. For the purposes
this paragraph the provisions
paragraph
capital
a resident
one
the States shall be taxable only in that State. CHAPTER V Elimination
Double Taxation ARTICLE 25 Elimination
Double Taxation
income or capital which, according to the provisions
this Agreement, may be taxed in Malta.
the provisions concerning the compensation
losses in the unilateral regulations for the avoidance
double taxation, the Netherlands shall allow a deduction from the amount
tax computed in conformity with paragraph
this Article equal to such part
that tax which bears the same proportion to the aforesaid tax, as the part
the income or capital which is included in the basis referred to in paragraph
this Article and may be taxed in Malta according to Articles 6 and 7, paragraph
this Agreement, bears to the total income or capital which forms the basis referred to in paragraph
this Article.
this Article with respect to the items
income which may be taxed in Malta according to paragraph
this Article. The amount
this deduction shall be the lesser
the following amounts: (
the Netherlands tax which bears the same proportion to the amount
tax computed in conformity with paragraph
this Article, as the amount
the said items
income bears to the amount
income which forms the basis referred to in paragraph
this Article.
paragraph
this Article with respect to income which may be taxed in Malta according to Article 7, if such income is subject in Malta to a special regime as meant in Article 30. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 17 The amount
this deduction shall be the lesser
the following amounts: (
the Netherlands tax which bears the same proportion to the amount
tax computed in conformity with paragraph
this Article, as the amount
the said items
income bears to the amount
income which forms the basis referred to in paragraph
this Article.
special incentive measures designed to promote economic development in Malta, the Malta tax actually levied on interest and royalties (other than royalties in respect
cinematographic films or tapes for television and broadcasting) arising in Malta is lower than the tax Malta may levy according to paragraph
A rt ic le 11 and para graph
A r ti c l e 1 2, respectively, then the amount equal to the Malta tax referred to in sub-paragraph (i)
paragraph
the gross amount thereof.
the law
Malta regarding the allowance
a credit against Malta tax in respect
foreign tax (which shall not affect the general principle hereof) and saving the provisions
paragraph
this Agreement, may be taxed in the Netherlands, the Netherlands tax on such income or capital, as the case may be, shall be allowed as a credit against the relative Malta tax payable thereon.
one
the States derives gains which may be taxed in the other State in accordance with paragraph
, that other State shall allow a deduction from its tax on such gains to an amount equal to the tax levied in the first-mentioned State on the said gains. CHAPTER VI Special Provisions ARTICLE 26 Non-discrimination
one
the States, whether they are residents
that State or not, shall not be subjected in the other State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals
that other State in the same circumstances are or may be subjected.
one
the States has in the other State shall not be less favourably levied in that other State than the taxation levied on enterprises
that other State carrying on the same activities. This provision shall not be construed as obliging one
the States to grant to residents
the other State any personal allowances, reliefs and reductions for taxation purposes on account
civil status or family responsibilities which it grants to its own residents.
paragraph
, apply, interest, royalties and other disbursements paid by an enterprise
one
the States to a resident
the other State shall, for the purpose
determining the taxable profits
such enterprise, be deductible under the same conditions as if they had been paid to a resident
the 18 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS first-mentioned State. Similarly, any debts
an enterprise
one
the States to a resident
the other State shall, for the purpose
determining the taxable capital
such enterprise, be deductible as if they had been contracted to a resident
the firstmentioned State.
one
the States, the capital
which is wholly or partly owned or controlled, directly or indirectly, by one or more residents
the other State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises
that firstmentioned State are or may be subjected.
every kind and description. ARTICLE 27 Mutual Agreement Procedure
one
the States considers that the actions
one or both
the States result or will result for him in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the national laws
those States, present his case to the competent authority
the State
which he is a resident, or, in any case referred to in paragraph
, to that
the State
which he is a national. This case must be presented within three years from the first notification
the action giving rise to taxation not in accordance with the Agreement.
the other State, with a view to the avoidance
taxation not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the national laws
the States.
the States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application
the Agreement. They may also consult together for the elimination
double taxation in cases not provided for in the Agreement.
the States may communicate with each other directly for the purpose
reaching an agreement in the sense
the preceding paragraphs. ARTICLE 28 Exchange
Information
the States shall exchange such information as is necessary for the carrying out
this Agreement or
the domestic laws
the States concerning taxes covered by this Agreement insofar as the taxation thereunder is not contrary to this Agreement. The exchange
information is not restricted by Article 1. Any information received by one
the States shall be treated as secret in the same manner as information obtained under the domestic laws
that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection
, the enforcement or prosecution in respect
, or the determination
appeals in relation to, the taxes which are the subject
the Agreement. Such persons or authorities shall use the information only for such purposes. These persons or authorities may disclose the information in DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 19 public court proceedings or in judicial decisions.
paragraph
the States the obligation (a) to carry out administrative measures at variance with the laws or the administrative practice
that or
the other State; (b) to supply particulars which are not obtainable under the laws or in the normal course
the administration
that or
the other State; (c) to supply information which would disclose any trade, business, industrial, commercial, or professional secret or trade process, or information, the disclosure
which would be contrary to public policy. ARTICLE 29 Diplomatic and Consular
ficials Nothing in this Agreement shall affect the fiscal privileges
diplomatic or consular
ficials under the general rules
international law or under the provisions
special agreements. ARTICLE 30 Exclusion
Certain Companies or Other Persons
either one
the States. It is also not applicable to income from such companies or other persons derived by a resident
the other State, nor to shares, ''jouissance'' rights or interests in such companies or other persons.
paragraph
this Article are also applicable in case a company or other person is treated under the administrative practice
that State in the same or similar way as a company or person as meant in that paragraph.
the States shall by mutual agreement decide which special regime is meant in the provisions
paragraph
this Article. The provisions
paragraph
the States decide otherwise by mutual agreement. ARTICLE 31 Regulations
the States shall by mutual agreement settle the mode
application
paragraphs
,
paragraphs
, and
paragraphs
each
the States, in accordance with the practices
that State, may prescribe regulations necessary to carry out the other provisions
this Agreement. ARTICLE 32 Territorial extension 20 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS
the Agreement shall not
itself also terminate any extension
the Agreement to the Netherlands Antilles, or Aruba. CHAPTER VII Final Provisions ARTICLE 33 Entry into Force
the States shall notify to each other that the constitutional requirements for the entry into force
this Agreement have been complied with.
the later
the notifications referred to in paragraph
taxes on income derived on or after the first day
January, 1976; (b) in respect
taxes on capital levied as from the first day
January, 1976. ARTICLE 34 Termination This Agreement shall remain in force until terminated by the Government
one
the States. Either State may terminate the Agreement through diplomatic channels, by giving notice
termination at least six months before the end
any calendar year after the year 1981. In such event the Agreement shall cease to have effect (a) in respect
taxes on income derived on or after the first day
January next following the year during which notice
termination has been given. (b) in respect
taxes on capital levied as from the first day
January next following the year during which notice
termination has been given. IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Agreement. DONE at The Hague this 18th day
May, 1977, in duplicate, in the Netherlands DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 21 and English languages, both texts being equally authentic. FOR THE GOVERNMENT
THE REPUBLIC
MALTA, FOR THE GOVERNMENT
THE KINGDOM
THE NETHERLANDS, (sd.) G. AGIUS (sd.) M. VAN DER STOEL PROTOCOL At the moment
signing the Agreement for the avoidance
double taxation and the prevention
fiscal evasion with respect to taxes on income and on capital, this day concluded between the Kingdom
the Netherlands and the Republic
Malta, the undersigned have agreed that the following provisions shall form an integral part
the Agreement. I. AD ARTICLE 4 An individual living aboard a ship without having a permanent home in either
the States shall be deemed to be a resident
the State in which the ship has its home harbour. II. AD ARTICLES 5 AND 7 Except with regard to re-insurance, the provisions
Articles 5 and 7
the Agreement shall not affect the provisions
the law
either State regarding the taxation
profits from the business
insurance III. AD ARTICLES 8, 14 AND 24
, profits from the operation
ships in international traffic derived by a company which is a resident
Malta, may be taxed in the Netherlands, unless the company proves that such profits are not relieved from Malta tax under the provisions
the Merchant Shipping Act, or under any identical or similar provision. The foregoing sentence, however, shall not apply if the company proves that not more than 25 per cent
its capital is owned, directly or indirectly, by persons who are not residents
Malta.
paragraph
sub-paragraph (a)
paragraph
shall not apply if the relation between the two companies has been arranged or is maintained primarily with the intention
securing this reduction.
paragraph
to the provisions
the Netherlands law to the effect that the receiving company is not charged to Netherlands company tax in respect
the profits distributed by a Malta company, is to the application
the so called "holding privilege" in the Netherlands Company Tax Act. Subject to the provisions
the said Act and to future amendments thereto, this "holding privilege" leads to the result that a company which is a resident
the Netherlands can leave out
account, in the computation
its taxable profits, dividends it receives from a company which is a 22 [ S.L.123.10 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS resident
Malta, if it owns at least 5 per cent
the paid-up capital
the latter company. V. AD ARTICLES 10, 11 AND 12 Applications for the repayment
tax levied contrary to the provisions
Articles 10, 11 and 12 have to be lodged with the competent authority
the State, which has levied the tax, within a period
three years after the expiration
the calendar year in which the tax has been levied. VI. AD ARTICLES 24 AND 25 The provisions on the taxation
capital in Article 24 and the provisions with respect to the elimination
double taxation with respect to capital in paragraph
the Agreement will not apply as long as Malta does not levy a tax on capital. VII. AD ARTICLE 25 It is understood that, insofar as the Netherlands income tax or company tax is concerned, the basis referred to in paragraph
is the "onzuivere inkomen" or "winst" in terms
the Netherlands Income Tax Law or Company Tax Law, respectively. VIII. AD ARTICLE 25 Notwithstanding Article 34
the Agreement the provision
paragraph
shall cease to have effect after the last day
December, 1997, unless the competent authorities decide otherwise in mutual agreement. IX. AD ARTICLES 28 AND 30
information as meant in Article 28
the Agreement in those cases where the Maltese competent authority and the relative authority vested with the administration
such special regime agree that sufficient evidence exists to warrant criminal proceedings.
the Agreement, shall not impose any restrictions on the exchange
information as meant in Article 28
the Agreement in case
suspicion
tax avoidance or tax evasion. IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Protocol. DONE at The Hague this 18th day
May, 1977, in duplicate, in the Netherlands DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM
THE NETHERLANDS [ S.L.123.10 23 and English languages, both texts being equally authentic. FOR THE GOVERNMENT
THE REPUBLIC
MALTA, FOR THE GOVERNMENT
THE KINGDOM
THE NETHERLANDS, (SD.) G. AGIUS (SD.) M. VAN DER STOEL
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.