Malta – Turkey Double Tax Treaty will come into force on 1 January 2014

The Malta-Turkey double tax treaty, which was signed in July 2011, will come into force on the 1st January 2014.

This treaty is based on the internationally recognised Organisation for Economic Cooperation and Development (OECD) Model Tax Convention. The treaty provides for a 10% withholding tax on dividends paid by a company resident in Turkey to a Maltese resident company in which it has at least a 25% shareholding. In all other cases, the maximum withholding tax rate is of 15%. The treaty also provides for a 10% withholding tax on interest and royalties paid by a Turkish resident to a Maltese resident beneficial owner. In terms of its domestic tax legislation, Malta does not withhold any tax on payments of dividends, interest and royalties to non resident beneficial owners.

For more information about Malta’s tax system and the firm’s tax practice, please contact Stephen Balzan Tax Partner of the firm.