Malta and Austria have had long standing economic relations which is why they are part of numerous international conventions. Apart from these, Malta and Austria have also signed a double taxation treaty which is in force since 1981. The Malta-Austria double taxation agreement covers the income tax in Malta, which is made up of several elements, while in Austria, the convention covers the following taxes:
- – the income and corporate taxes;
- – the capital gains tax;
- – the land and agricultural and forestry activities of companies taxes;
- – the directors’ fees;
- – the inheritance tax;
- – the commercial and industrial enterprises tax.
The agreement also provides for other similar taxes which are be levied in both countries. If you want more information on the tax advantages offered by Malta, our lawyers in Malta can assist.
The main provisions of the Malta – Austria double taxation treaty
The agreement for the avoidance of double taxation between Malta and Austria favors both individuals and companies residents of Malta or Austria, or residents of both countries. When it comes to companies, the treaty also provides for businesses with a special status, such as branch offices and subsidiaries which are considered permanent establishments and which will be taxed only in the country they operate in. In order to be deemed as a permanent establishment, an entity must be registered in the other country for at least 12 months.
Our Maltese lawyers can help foreign companies seeking to set up a subsidiary or a branch office here.
Special tax rates in the Malta – Austria double tax agreement
In order to avoid double taxation, Malta and Austria have decided to allow for credit taxes or tax exemptions for the incomes which could be levied the same tax twice. However, the Malta – Austria double taxation agreement also provides for the following reduced tax rates related to some incomes:
- – dividend payments will be taxed at a 15% rate;
- – interest payments will be taxed a 5% tax rate;
- – royalties payments will be taxed at a 10% rate.
If you need more information on the double tax agreement with Austria, you can contact our law firm in Malta. You can also rely on our attorneys if you want to open a company in Malta or need other legal services.