New Treaty with The Federal Democratic Republic of Ethiopia

By means of LN 182 of 2018, the Government of Malta has published the text of a new double taxation agreement with Ethiopia.  In terms of Articles 11 and 12 of the treaty, the two countries have agreed to have a shared jurisdiction to tax on interest and royalties.  With respect to these two types of income, the source country (i.e. the State in which the interest and the royalties arise) will have a primary right to tax while the residence country of the recipient of the income will have a secondary right to tax with the obligation to grant relief from double taxation. 

With respect to dividends, Article 11 stipulates that the two countries may tax such income with the country in which the company paying the dividends is resident having a primary right to tax while the country of residence of the recipient will have a secondary right to tax with the obligation to grant relief from double taxation.  Notwithstanding this, Ethiopia will limit its withholding taxing rights to 5% of the gross dividends.  Malta on the other hand does not withhold any tax on distribution of dividends by Maltese companies to recipients resident in Ethiopia. 

The treaty is not yet in force. 

For further information, you may contact the firm’s tax and corporate services partner Stephen Balzan on [email protected].  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected]

Corporate Taxation
in Malta

Maltese companies are subject to tax at the rate of 35% on their world wide income and capital gains.   Malta grants various fiscal incentives to both companies and their shareholders upon distribution of a dividend.  Malta is a membe...

Learn More

Setting up a Company
in Malta

Setting up a company in Malta is a relatively straight forward procedure and can be set up within 2 working days, provided we are in receipt of all the information, funds and due diligence documentation we need. The Act that regulates Malte...

Learn More

Taking up Residence
in Malta

Warm climate, friendly people, excellent communication infrastructures, low criminality and many other features of the Maltese islands have made Malta an excellent destination for people to take up residence in. Moreover low rates of taxati...

Learn More

Remote Gaming
in Malta

Malta was the first EU Member State to specifically regulate the remote gaming industry in 2004 and has ever since established itself as one of the prime jurisdictions for remote gaming operators. The Malta Gaming Authority (“MGA”) is the regulatory of gaming in Malta. The success o...

Learn More

Payment Institutions
in Malta

Malta has become a destination of choice for the setting up of Payment Institutions (also referred to as Payment Services Providers or PSPs).  A number of advantages has contributed to this success, mainly but not limited to the fiscal incentives granted not only to the payment institutions ...

Learn More

Electronic Money Institutions
in Malta

Malta has recently seen an increase in the number of Electronic Money Institutions (EMIs) looking to set up their operations in Malta.  This has been largely due to the growth in the e-commerce and the i-gaming industries.  Such EMIs are regulated by the Financial Institutions Act and t...

Learn More

Initial Coin Offering (ICO) Services
in Malta

Malta has always been on the forefront of technology and innovation.  In the past months, a number of initiatives have been launched, aimed at establishing an innovative and attractive regulatory framework for entities operating in blockchain (and distributed ledger technologies), virtual cu...

Learn More

Prospects Services of a Corporate Advisor
in Malta

‘Prospects’ is a new platform set up by the Malta Stock Exchange in line with its commitment to open up new capital market opportunities, create economies of scale and to afford businesses more competitiveness and sustainability.  Through ‘Prospects’, SME’s wil...

Learn More

Assistance to Family Businesses
in Malta

Malta has recently introduced legislation to encourage good governance in the management of family businesses, to assist family businesses to operate their business in an efficient way and to assist such family businesses to transfer their business from one generation to the other.  Malta is...

Learn More

Members of