Through Legal Notice 97 of 2026, Malta introduced amendments to the Double Taxation Relief on Taxes on Income with Romania Order. The amendments implement a Protocol signed between Malta and Romania which updates the existing double taxation agreement originally concluded in 1995, with the primary objective of strengthening the treaty’s Mutual Agreement Procedure (MAP) provisions.
The new legislation, issued under Article 76 of the Income Tax Act (Chapter 123 of the Laws of Malta), provides for amendments to the Malta-Romania double taxation treaty and confirms that these changes will take effect in accordance with the provisions of the Protocol agreed between the two States.
Key Amendment to the Mutual Agreement Procedure
The Protocol amends Article 26(2) of the Malta-Romania tax treaty, which regulates the process through which taxpayers may seek relief where they believe that taxation has not been imposed in accordance with the treaty.
Under the revised provision, where a taxpayer presents an objection, and the competent authority considers that objection to be justified, but is unable to arrive at a satisfactory solution on its own, it must endeavour to resolve the matter by mutual agreement with the competent authority of the other Contracting State. Any agreement reached through this process is to be implemented notwithstanding any time limits that may exist under the domestic laws of either State.
The amendment aligns the treaty more closely with modern international tax treaty standards and provides greater certainty for taxpayers seeking relief from double taxation. By ensuring that competent authorities can implement agreed solutions even where domestic statutory limitation periods may otherwise apply, the Protocol enhances the effectiveness of cross-border tax dispute resolution mechanisms.
Enhanced Certainty for Cross-Border Investors
The revised MAP provision is particularly relevant for multinational groups, investors and individuals with cross-border activities between Malta and Romania. In an increasingly complex international tax environment, effective dispute resolution mechanisms have become a key feature of modern tax treaties, helping to reduce the risk of unresolved double taxation and promoting greater certainty for international business operations.
The amendment also reflects broader international efforts to improve treaty dispute resolution procedures and facilitate cooperation between tax authorities. Taxpayers engaged in transactions or structures involving both jurisdictions may therefore benefit from a more robust framework for addressing treaty-related disputes.
Entry Into Force and Application
The Protocol provides that it will enter into force thirty days after the date of the later notification exchanged between Malta and Romania confirming that their respective legal requirements have been fulfilled. Once in force, the amended provisions apply in respect of taxes on income derived during any calendar year or accounting period beginning on or after the first day of January immediately following the date on which the Protocol enters into force.
What This Means for Taxpayers
While the amendment is relatively targeted, it represents an important enhancement to the operation of the Malta-Romania double taxation treaty. Businesses and individuals with tax exposure in both jurisdictions should review any existing or potential treaty disputes that may benefit from the revised MAP framework and consider the implications of the updated provisions for future cross-border transactions and tax planning arrangements.
Legal Notice 97 of 2026 demonstrates Malta’s continued commitment to updating its double tax treaty network in line with international best practices and ensuring that taxpayers have access to effective mechanisms for resolving cross-border tax disputes.
How Can Papilio Services Assist?
Papilio Services assists corporate and private clients with international tax structuring, double taxation treaty interpretation and cross-border tax compliance. Where taxpayers are affected by treaty disputes or potential instances of double taxation involving Malta and Romania, our team can provide guidance on the practical application of treaty provisions, assess available relief mechanisms and liaise with professional advisers across jurisdictions to help achieve efficient and compliant outcomes.
For more details, please refer to:
- Legal Notice 97 of 2026 – Double Taxation Relief on Taxes on Income with Romania (Amendment) Order, 2026;
Should you require additional information, schedule a complimentary consultation with our expert team.
