Malta, Luxembourg Double Taxation Agreement


Malta has just concluded treaties on double taxation with various countries, including Luxembourg. The Double Taxation Agreement (DTA) covers income tax and other similar taxes applied to companies and individuals carrying out operations in the specified territories.

Reductions on corporation tax

Through the Malta – Luxembourg DTA, Maltese and Luxembourg companies and citizens will benefit from reductions and exemptions on capital and corporation tax, income tax applied to individuals, tax on fees applied to company directors as well as communal trade tax.

The elimination of double taxation in Malta allows for Luxembourg citizens and companies to be eligible for credit against Maltese tax, according to the tax paid in Luxembourg after this is assessed. In addition, Luxembourg companies are granted credit in relation to profit resulting from dividends if they pay credit to Maltese companies holding at least 10%. Luxembourg companies and citizens who receive interest on royalties in Malta will be taxed a flat rate of 10% on these.

The Malta-Luxembourg DTA was first formulated back in 1996 and last updated in 2013 following the new income tax provision of the time. The incomes covered by this document are mainly the following:

  • Dividends
  • Interest
  • Royalties
  • Agriculture and agricultural activities
  • Business profits
  • Incomes acquired from immovable property
  • Alienated property
  • International traffic
  • The provision of independent or dependent personal services

In addition, artists, sportspeople and retired individuals are also required to abide by the regulations stipulated in the document.