The Malta – Curaçao Double Tax Treaty

Background

On the 18^th of November 2015, Malta and the Kingdom of Netherlands, in respect of Curaçao, signed a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. The Convention has now come into force as from the 1^st of September 2024, through Legal Notice 209 of 2024. 

General

The Convention applies to all individuals, trusts, partnerships, collective investment schemes, companies and any other body of persons which is resident in Malta or/and Curaçao. 

It seeks to provide double taxation relief in relation to income tax imposed by the laws of Malta, and (i) income tax, (ii) wage tax, (iii) profit tax and (iv) dividend tax imposed by the laws of Curaçao. 

Business Profits

The profits of any business carried on by a resident of one Contracting State shall be taxable only in that State unless such person carries on business in the other Contracting State through a permanent establishment situated therein. In such case, the profits of such person may be taxed in the other State but only insofar as they are attributable to the permanent establishment.

Shipping and Air Transport

Profits from the operation of ships or aircraft in international traffic shall only be taxable in the Contracting State in which the place of effective management of the enterprise is situated.

Dividends

Dividends paid by a company resident in one Contracting State (the ‘Paying State) to a resident of the other Contracting State (the ‘Receiving State) may be taxed in the Receiving State. They may also be taxed in the Paying State, subject to the below limitations:

1. Where the dividend is paid by a company resident in Curaçao to a resident of Malta, who is the beneficial owner of the company, the tax charged in Curaçao shall not exceed:

1. 0% if the beneficial owner directly holds at least 10% of the capital of the company;
2. 5% in all other cases.

1. Where the dividend is paid by a company resident in Malta to a resident of Curaçao, who is the beneficial owner of the company, the tax charged in Malta shall not exceed that chargeable on the profits out of which the dividends are paid.

Income from Employment

Subject to certain exceptions, salaries and other similar remuneration derived by a resident of a Contracting State shall only be taxable in that State unless the employment is exercised in the other Contracting State.

Others

The Convention also includes provisions on pensions, directors’ fees, capital gains and other income. 

Disclaimer

The information provided in this article is for informational purposes only and should not be construed as tax, legal, or other professional advice. Zeta makes no guarantees as to the accuracy or completeness of the information, nor does it take any responsibility for actions taken based on the contents of this article. Readers are advised to seek independent advice from qualified professionals before making any decisions. Furthermore, Zeta does not warrant that the interpretation of the relevant provisions of the Malta-Curaçao Double Tax Treaty is correct or applicable to individual circumstances.