Maltese Government Concludes Talks With Uruguay And China On New Double Taxation
The Government has concluded talks pertinent to new double taxation agreements with Uruguay and China.
The Minister of Finance held that South America is a region with significant emerging markets and in the context of broadening our horizons in terms of attracting trade and investment, such agreements become increasingly important.
The agreement with Uruguay is the first of its nature with a South American country. The Maltese Government is currently seeking to strengthen economic relations with South American countries. Minister of finance Tonio Fenech held: “This agreement with Uruguay signals the government’s intention to strengthen economic relations with South American countries and, hopefully, will lead the way to the conclusion of a number of double taxation agreements with other South American countries. South America is a region with a number of very important emergent markets that are experiencing important growth rates and in the context of widening our horizons in terms of attracting trade and investment, such agreements assume paramount importance.”
The rationale behind the double taxation convention is to create attractive conditions for Uruguayan and Maltese investors. It also provides for anti-abuse provisions intended to prevent tax avoidance through improper use of the treaty. The Exchange of Information article parallels internationally agreed principles while catering for pertinent channels for exchange of information in a mutual effort to prevent tax evasion.
Upon entering into force after ratification by both countries, the agreement with China will replace an older double taxation treaty which was signed in 1993. The new agreement seeks to help Chinese investors to enter the European market in a more efficient manner allowing for considerable investment potential. Negotiations took into consideration the OECD Model Tax Convention on Income and on Capital and recent tax treaties concluded by both countries. Furthermore, the new DTA with China updates the Exchange of Information article in accordance with internationally agreed standards and sets up better channels for exchange of information in a joint effort to prevent fiscal evasion.