This is the first income tax treaty inked by the parties
Malta and Moldova signed income tax treaty and an accompanying protocol on 10 April 2014.
The treaty provides for withholding at source, at the following rates:
– A 5% rate will apply where dividends are paid by a resident of Moldova to a resident of Malta that is the beneficial owner of the dividends. In the case of Malta, no withholding tax effectively will be levied, since any withholding tax on dividends may not exceed the tax chargeable on the distributable profits.
– The rate on interest and royalties generally will be 5%.
However, the term “royalties” does not include payments for the use of, or the right to use, industrial, commercial or scientific equipment (e.g. leasing income).
The source state may tax gains derived by a resident of the other state from the alienation of shares deriving more than 50% of their value, directly or indirectly, from immovable property situated in the source state.