Summary of the agreement between the Government of the Republic of Malta and the Government of the Republic of Italy

Source: Mario Spataro¸ PKF Malta¸ 4. May 2012


Scope of the Agreement

This Agreement shall apply to persons who are residents of one or both of the Contrasting States. It is applied to taxes on income imposed on behalf of each Contracting State.

The existing taxes to which this Agreement shall apply are:

–          in the case of the Italy:  the personal income tax (imposta sul reddito delle persone fisiche) and the corporate income tax (imposte sul reddito delle persone giuridiche);

–          in the case of Malta: the income tax and surtax¸ including prepayments of tax whether made by deduction at source or otherwise.

This Agreement¸ logically¸ it will be applied also to future taxes in addition to¸ or in place of the existing taxes.


Fiscal Domicile

The term “resident of a Contrasting State” includes: any person which possesses a domicile¸ residence¸ place of management or any other criterion of a similar nature¸ and then taxable¸ as required by low¸ of the Contracting State.

There are complex situations of double residence and considering the case in question¸ you will have to take into regard factors such as his personal and economic relations¸ his habitual abode and his national.


Permanent Establishment

The term “permanent establishment” means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

There is “permanent establishment” in case there are specific factors: a place of management¸ a branch¸ an office¸ a factory¸ a workshop¸ a mine¸ a quarry and a building site. Much as the furnishing of services (example consultancy services) there is “permanent establishment” if the activities continue within the country for a period aggregating more than twelve months within any two-year period.


Income from Immovable Property 

Income from immovable property may be taxed in the Contrasting State in which such property is situated. The term shall include property accessory to immovable property¸ usufruct of immovable property and rights to variable or fixed payments as conside