On the 9th August 2014, the double tax treaty between Malta and the United Mexican States came into force.
This treaty affords double taxation relief in relation to (i) the federal income tax and (ii) the business flat rate tax, as imposed by the laws of the United Mexican States and income tax, as imposed by the laws of Malta.
The main features of this treaty are as follows:
- Dividends no tax is imposed – 0% withholding tax.
- Interest which arises in one of the
Contracting States and paid to a resident of the other may be taxed
in that other state. However it may also be taxed in the
Contracting State in which it arises and according to the laws of
that State.
If the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed:
- 5% of the gross amount of the interest from loans granted by a bank;
- 10% of the gross amount of the interest in all other cases.
- Royalties are dealt with in the same way as interest, however if the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed: 10% gross amount of the royalties.
This Double Taxation Convention with Mexico which is the second, after Uruguay, signals the intent to strengthen economic relations with Latin American Countries, with the aim of concluding other similar agreements with countries of the same region.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
