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Malta and Russia signed a double taxation agreement on 24 April 2013.  The principal provisions are:

- Income from Immovable Property

Income derived by a resident of a contracting state from immovable property situated in the other contracting state, may be taxed in the other state

- Dividends

Where dividends are paid by a company resident in Russia to a Maltese resident as a beneficial owner of the dividends, the tax charged in Russia should not exceed:

• 5% of the gross amount of the dividends, if the Malta company directly holds at least 25% of the capital of the company paying the dividends and this holding amounts to at least ?100,000.
• 10% of the gross amount of the dividends in all other cases.

Malta does not withhold tax on dividends paid from Russia to Malta.

- Interest

Withholding tax on interest paid from Russia to Malta is limited to 5%.

Malta does not withhold tax on interest paid to Russia.

- Royalties

Withholding tax on royalties paid from Russia to Malta is limited to 5%.

Malta does not withhold tax on the payment of royalties to Russia.

- Capital Gains

Gains derived by a resident of a contracting state from the sale of immovable property situated in the other contracting state may be taxed in the other state.

Gains derived by an enterprise of a contracting state from the sale of ships or aircraft operating in international waters or space, or from immovable property relating to the operation of such ships or aircraft shall be taxable only in that state.

Gains from the sale of property forming part of the business property of a permanent establishment in the other contracting state are taxable in that other contracting state.

Gains from the sale of shares in a company or rights deriving more than 50% of their value directly or indirectly from immovable property situated in the other contracting state may be taxed in the other state.

Generally all other gains from the sale of property in another contracting state, other than those referred to above, may only be taxed in the state of the investor. 

- Exchange of Information

There is an exchange of information clause based on the OECD Model Agreement.

Russia and Malta need to complete the internal legal procedures necessary for the treaty to be brought into force. The Convention will then be applicable in respect of income derived during taxable years beginning on 1st January, following the date on which the Treaty comes into force.

Dixcart will issue a notification as soon as these legal procedures have been completed.

Professional advice should always be taken regarding the specific circumstances of any situation prior to reliance on a Double Tax Agreement.

For further information please contact Sean Dowden of Dixcart International Professional Support Services.

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