Botswana & Malta Double Tax Treaty

A double tax treaty between Malta and the Republic of Botswana was signed on 2 October 2017 and entered into force on 13 November 2018. Some of the main features of the treaty are the following:

Elimination of double taxation

Double taxation is eliminated by the allowance of a credit for any tax suffered in the source country against the tax liability for that income in the residence country.

Taxation of dividends

The double tax treaty between Malta and Botswana sets out a maximum withholding tax of 5 per cent on a payment of dividends from a company in Botswana to a shareholder resident in Malta, who is the beneficial owner thereof and holds at least 25 per cent of the capital of the company paying the dividend. In all other cases, the maximum withholding tax is 6 per cent.

No withholding tax is charged on dividends paid by a company in Malta to a shareholder resident in Botswana (as a result of domestic law provisions).

Taxation of interest

The double tax treaty between Malta and Botswana sets out a maximum withholding tax of 8.5 per cent on interest paid to the beneficial owner thereof.

No withholding tax is charged on interest paid by a Malta resident person to a person resident in Botswana (as a result of domestic law provisions).

Taxation of royalties

The double tax treaty between Malta and Botswana sets out a maximum withholding tax of 5 per cent on royalties paid to the beneficial owner thereof for the use of or the right to use industrial, commercial or scientific equipment. In all other cases, the maximum withholding tax is 7.5 per cent.

No withholding tax is charged on royalties paid by a Malta resident person to a person resident in Botswana (as a result of domestic law provisions).

Artistes and Sportsmen

Income derived by a person from entertainment or sports may be taxed in the state where the activities are exercised.

Pensions

Pensions and similar remuneration in consideration of past employment and any annuity may be taxed in the country of source.

Other income

Income not specifically dealt with in the Malta Botswana double tax treaty shall be taxable in the country of residence only.

Should you need any further information on the Malta Botswana double tax treaty and the potential tax optimisation opportunities that may arise there for companies and individuals based in Botswana and Malta, please contact us on info@papilioservices.com.