Russia & Malta Double Tax Treaty

The Double Tax Treaty Malta Russia came into force on the 22 May 2014. The main features of the treaty are as follows:

Russia Withholding Taxes

Dividend Income

The Double Tax Treaty Malta Russia sets out a maximum Russian withholding tax of 5% on dividends paid by a company resident in Russia to a company (other than a partnership) resident in Malta which holds directly at least 25% of the capital of the company paying the dividend, and this holding amounts to at least €100k. In all other cases, the maximum Russian withholding tax is 10%.

Interest Income

The Double Tax Treaty Malta Russia sets out a maximum Russian withholding tax of 5% on interest paid by a resident of Russia to a resident of Malta.

Royalty Income

The Double Tax Treaty Malta Russia sets out a maximum Russian withholding tax of 5% on royalties paid by a resident of Russia to a resident of Malta.

Other Income

The Double Tax Treaty Malta Russia definition of a permanent establishment (PE) is based on the OECD Model, and includes the possibility of a services PE.

The Double Tax Treaty Malta Russia includes a limitation of benefit clause whereby the benefits of the treaty do not apply “if the main purpose or one of the main purposes of such resident or a person connected to such resident was to obtain the benefits of the Convention”. However, the LOB clause does not apply where a company is engaged in substantive business operations in the contracting state of which it is a resident.

Please contact us should you require any more information on the Malta Russia Double Tax Treaty and the unique tax planning opportunities. You can email us enquiries@papilioservices.com or call us directly on +356 2258 2000.