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Double Taxation Arrangement with the Government of Malta

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Thursday 31 January 2013

Below is the speech given by Treasury and Resources Minister, Deputy Gavin St Pier, on the Double Taxation Agreement with the Government of Malta during the January 2013 States of Deliberation meeting.

Mr Bailiff,

Members of the Assembly may recall that in September last year, the Assembly considered a States Report on a Double Taxation Arrangement with the Government of Japan. At that time I said "this is part of what is now a long production line of tax agreements stretching back to the first Tax Information Exchange Agreement concluded with the United States in 2002; a production line which accelerated with the advent of the internationally agreed tax standard, implemented by the Global Forum on transparency and exchange of information for tax purposes in 2008." Today's report is just the next agreement off that production line. (As a digression, Members will be aware that the Deputy Chief Minister has recently signed Double Tax Agreements with Jersey and the Isle of Man which will shortly come before this Assembly.) Whilst like the agreement with Japan, the signature of the Malta agreement, predates my Board's appointment, we are pleased to support it.

Members may recall from September that in the case of a Double Taxation Arrangement, the States is asked to declare, by Resolution, that the Arrangement should have effect under the Income Tax Law.  The Assembly are also being asked to approve an Ordinance in respect of this same agreement. This is because Article 24 of the Agreement provides for the exchange of information; in order for this provision to be effective, the States must specify the Agreement by way of an Ordinance pursuant to Section 75C of the Income Tax Law. It makes sense to deal with this at the same time as the Resolution bringing the rest of the Agreement into effect and I am grateful to you, Sir, for giving permission for both matters to be dealt with in the same Billet.

Sir, although Malta is not a member of the OECD, this agreement is based on the OECD Model Convention which is the template for most of these sorts of agreement. It is also in closely based on the Agreements between Malta and the Isle of Man - which were concluded in 2009 and 2010 respectively.

There are no significant resource or revenue implications anticipated from this Agreement. However, it is significant in that it is a full double tax agreement, rather than the more limited form of agreement with Japan, by example. This is very useful precedent in seeking similar agreements from other jurisdictions. It is also significant as another stepping stone in our journey to a network of these sorts of Agreements; importantly negotiated on our own behalf and not by the United Kingdom for us; this network is also important in the present climate to help maintain our position as co-operative members of the international community.

I have no hesitation in recommending to Members both the ratification of the Agreement and the approval of the Ordinance.

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