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SUBSIDIARY LEGISLATION 123.48
DOUBLE TAXATION RELIEF ON TAXES ON 
INCOME WITH THE REPUBLIC OF CROATIA 
ORDER
22nd August, 1999
LEGAL NOTICE 124 of 1999. 
Title.
on Income with the Republic of Croatia Order.
Arrangements to 
have effect.
2. It is hereby declared:-
( a ) that the arrangements specified in the Agreement set
out in the Schedule to this Order have been made with
the Republic of Croatia with a view to affording relief
from double taxation in relation to the following taxes
imposed by the laws of the Republic of Croatia:
(i) the profit tax; and
(ii) the income tax;
( b ) that it is expedient that those arrangements should
have effect.
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SCHEDULE
AGREEMENT BETWEEN THE REPUBLIC OF  MALTA  AND THE REPUBLIC 
OF CROATIA
FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES 
ON INCOME
The Republic of Malta and   the Republic of Croatia desiring to conclude an
Agreement for the avoidance of double taxation with respect to taxes on income
have agreed as follows:
Article 1
PERSONAL SCOPE
This Agreement shall apply to persons who are residents of one or both of the
Contracting States.
Article 2
TAXES COVERED
1. This Agreement shall apply to taxes on income imposed on behalf of a
Contracting State or of its local authorities, irrespective of the manner in which they
are levied.
2. There shall be regarded as taxes on income all taxes imposed on total
income, or on elements of income, including taxes on capital appreciation and taxes
on gains from the alienation of movable or immovable property, as well as taxes on
the total amounts of wages or salaries paid by enterprises.
3. The existing taxes to which this Agreement shall apply are in particular:
( a ) in the Republic of Croatia:
(i) the profit tax, and
(ii) the income tax; 
(hereinafter referred to as “Croatian tax”);
( b ) in the Republic of Malta:
(i) the income tax;
(hereinafter referred to as “Malta tax”).
4. The Agreement shall apply also to any identical or substantially similar
taxes which are imposed after the date of signature of the Agreement in addition to,
or in place of, the existing taxes. The competent authorities of the Contracting States
shall notify each other of changes which have been made in their respective taxation
laws.
Article 3
GENERAL DEFINITIONS
1. For the purposes of this Agreement, unless the context otherwise requires:
( a ) the term “Croatia”, used in a geographical sense, means the territory of
the Republic of Croatia within its internationally recognised borders, as
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well as any area beyond the territorial waters of the Republic of Croatia
in which, in accordance with international law and the laws of the
Republic of Croatia, the Republic of Croatia exercises its sovereign
rights and jurisdiction;
( b ) the term “Malta” means the Republic of Malta and, when used in a
geographical sense, means the Island of Malta, the Island of Gozo and
the other islands of the Maltese archipelago including the territorial
waters thereof, and any area outside the territorial waters of Malta
which has been or may hereafter be designated, in accordance with
international law and under the law of Malta concerning the continental
shelf, as an area within which the rights of Malta with respect to the
seabed and subsoil and their natural resources may be exercised;
( c ) the terms “a Contracting State” and “the other Contracting State” mean,
as the context requires, Croatia or Malta;
( d ) the term “tax” means, as the context requires, a Croatian or Malta tax;
( e ) the term “person” includes an individual, a company and any other body
of persons;
( f ) the term “company” means any body corporate or any entity which is
treated as a body corporate for tax purposes;
( g ) the terms “enterprise of a Contracting State” and “enterprise of the other
Contracting State” mean respectively an enterprise carried on by a
resident of a Contracting State and an enterprise carried on by a resident
of the other Contracting State;
( h ) the term “international traffic” means any transport by a ship or aircraft
operated by an enterprise of a Contracting State, except when the ship
or aircraft is operated solely between places in the other Contracting
State;
( i ) the term “national” means any individual possessing the citizenship of a
Contracting State and any legal person, partnership or association
deriving its status as such from the laws in force in a Contracting State;
( j ) the term “competent authority” means:
(i) in the case of Croatia, the Minister of Finance or his authorised
representative;
(ii) in the case of Malta, the Minister responsible for finance or his
authorised representative.
2. As regards the application of the Agreement by a Contracting State any term
not defined therein shall, unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the taxes to which the Agreement
applies.
Article 4
RESIDENT
1. For the purposes of this Agreement, the term “resident of a Contracting
State” means any person who, under the laws of that State, is liable to tax therein by
reason of his domicile, residence, place of management or any other criterion of a
similar nature. But this term does not include any person who is liable to tax in that
State in respect only of income from sources in that State.
2. Where by reason of the provisions of paragraph 1 an individual is a resident
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of both Contracting States, then his status shall be determined as follows:
( a ) he shall be deemed to be a resident of the State in which he has a
permanent home available to him; if he has a permanent home available
to him in both States, he shall be deemed to be a resident of the State
with which his personal and economic relations are closer (centre of
vital interests);
( b ) if the State in which he has his centre of vital interests cannot be
determined, or if he has not a permanent home available to him in either
State, he shall be deemed to be a resident of the State in which he has an
habitual abode;
( c ) if he has an habitual abode in both States or in neither of them, he shall
be deemed to be a resident of the State of which he is a national;
( d ) if he is a national of both States or of neither of them, the competent
authorities of the Contracting States shall settle the question by mutual
agreement.
3. Where by reason of the provisions of paragraph 1 a person other than an
individual is a resident of both Contracting States, then it shall be deemed to be a
resident of the State in which its place of effective management is situated.
Article 5
PERMANENT ESTABLISHMENT
1. For the purposes of this Agreement, the term “permanent establishment”
means a fixed place of business through which the business of an enterprise is
wholly or partly carried on.
2. The term “permanent establishment” includes especially:
( a ) a place of management, 
( b ) a branch, 
( c ) an office, 
( d ) a factory, 
( e ) a workshop, and 
( f ) a mine, an oil or gas well, a quarry or any other place of extraction of
natural resources.
3. The term “permanent establishment” likewise encompasses:
( a ) a building site or construction, assembly or installation project or
supervisory activities in connection therewith, but only where they last
more than nine months;
( b ) the furnishing of services, including consultancy services by an
enterprise of a Contracting State through employees or other engaged
personnel in the other Contracting State, provided that such activities
continue for the same project or a connected project for a period or
periods aggregating more than nine months.
4. Notwithstanding the preceding provisions of this Article, the term
“permanent establishment” shall be deemed not to include:
( a ) the use of facilities solely for the purpose of storage, display or delivery
of goods or merchandise belonging to the enterprise;
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( b ) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;
( c ) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;
( d ) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise or of collecting information, for the
enterprise;
( e ) the maintenance of a fixed place of business solely for the purpose of
carrying on, for the enterprise, any other activity of a preparatory or
auxiliary character;
( f ) the maintenance of a fixed place of business solely for any combination
of activities mentioned in sub-paragraphs ( a ) to ( e ), provided that the
overall activity of the fixed place of business resulting from this
combination is of a preparatory or auxiliary character.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person -
other than an agent of an independent status to whom paragraph 6 applies - is acting
on behalf of an enterprise and has, and habitually exercises, in a Contracting State an
authority to conclude contracts in the name of the enterprise, that enterprise shall be
deemed to have a permanent establishment in that State in respect of any activities
which that person undertakes for the enterprise, unless the activities of such person
are limited to those mentioned in paragraph 4 which, if exercised through a fixed
place of business, would not make this fixed place of business a permanent
establishment under the provisions of that paragraph.
6. An enterprise shall not be deemed to have a permanent establishment in a
Contracting State merely because it carries on business in that State through a
broker, general commission agent or any other agent of an independent status,
provided that such persons are acting in the ordinary course of their business.
However, when the activities of such an agent are devoted wholly or almost wholly
on behalf of that enterprise, he will not be considered an agent of an independent
status within the meaning of this paragraph. 
7. The fact that a company which is a resident of a Contracting State controls
or is controlled by a company which is a resident of the other Contracting State, or
which carries on business in that other State (whether through a permanent
establishment or otherwise), shall not of itself constitute either company a
permanent establishment of the other.
Article 6
INCOME FROM IMMOVABLE PROPERTY
1. Income derived by a resident of a Contracting State from immovable
property (including income from agriculture or forestry) situated in the other
Contracting State may be taxed in that other State.
2. The term “immovable property” shall have the meaning which it has under
the law of the Contracting State in which the property in question is situated. The
term shall in any case include property accessory to immovable property, livestock
and equipment used in agriculture and forestry, rights to which the provisions of
general law respecting landed property apply, usufruct of immovable property and
rights to variable or fixed payments as consideration for the working of, or the right
to work, or to explore for, mineral deposits, sources and other natural resources.
Ships, boats and aircraft shall not be regarded as immovable property.
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3. The provisions of paragraph 1 shall apply to income derived from the direct
use, letting, or use in any other form of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from
immovable property of an enterprise and to income from immovable property used
for the performance of independent personal services.
Article 7
BUSINESS PROFITS
1. The profits of an enterprise of a Contracting State shall be taxable only in
that State unless the enterprise carries on business in the other Contracting State
through a permanent establishment situated therein. If the enterprise carries on
business as aforesaid, the profits of the enterprise may be taxed in the other State but
only so much of them as is attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a
Contracting State carries on business in the other Contracting State through a
permanent establishment situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it might be expected to
make if it were a distinct and separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing wholly independently
with the enterprise of which it is a permanent establishment.
3. In determining the profits of a permanent establishment, there shall be
allowed as deductions expenses which are incurred for the purposes of the
permanent establishment, including executive and general administrative expenses
so incurred, whether in the State in which the permanent establishment is situated or
elsewhere. 
4. Insofar as it has been customary in a Contracting State to determine the
profits to be attributed to a permanent establishment on the basis of an
apportionment of the total profits of the enterprise to its various parts, nothing in
paragraph 2 shall preclude that Contracting State from determining the profits to be
taxed by such an apportionment as may be customary; the method of apportionment
adopted shall, however, be such that the result shall be in accordance with the
principles contained in this Article.
5. No profits shall be attributed to a permanent establishment by reason of the
mere purchase by that permanent establishment of goods or merchandise for the
enterprise.
6. For the purposes of the preceding paragraphs, the profits to be attributed to
the permanent establishment shall be determined by the same method year by year
unless there is good and sufficient reason to the contrary.
7. Where profits include items of income which are dealt with separately in
other Articles of this Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article.
8. The provisions of this Article shall not affect the provisions of the law of a
Contracting State regarding the taxation of profits from the business of insurance.
Article 8
INTERNATIONAL TRAFFIC
1. Profits of an enterprise of a Contracting State from the operation of ships or
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aircraft in international traffic shall be taxable only in that State.
2. The provisions of paragraph 1 shall also apply to profits from the
participation in a pool, a joint business or an international operating agency.
Article 9
ASSOCIATED ENTERPRISES
1. Where -
( a ) an enterprise of a Contracting State participates directly or indirectly in
the management, control or capital of an enterprise of the other
Contracting State, or 
( b ) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of a Contracting State and an
enterprise of the other Contracting State,
and in either case conditions are made or imposed between the two enterprises in
their commercial or financial relations which differ from those which would be made
between independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of those conditions,
have not so accrued, may be included in the profits of that enterprise and taxed
accordingly.
2. Where a Contracting State includes in the profits of an enterprise of that
State - and taxes accordingly - profits on which an enterprise of the other
Contracting State has been charged to tax in that other State and the profits so
included are profits which would have accrued to the enterprise of the first-
mentioned State if the conditions made between the two enterprises had been those
which would have been made between independent enterprises, then that other State
may make an appropriate adjustment to the amount of the tax charged therein on
those profits. In determining such adjustment, due regard shall be had to the other
provisions of this Agreement and the competent authorities of the Contracting States
shall if necessary consult each other.
Article 10
DIVIDENDS
1. Dividends paid by a company which is a resident of a Contracting State to a
resident of the other Contracting State may be taxed in that other State.
2. However, such dividends may also be taxed in the Contracting State of
which the company paying the dividends is a resident and according to the laws of
that State, but:
( a ) where the dividends are paid by a company which is a resident of
Croatia to a resident of Malta who is the beneficial owner thereof, the
Croatian tax so charged shall not exceed 5% of the gross amount of the
dividends;
( b ) where the dividends are paid by a company which is a resident of Malta
to a resident of Croatia who is the beneficial owner thereof, Malta tax
on the gross amount of the dividends shall not exceed that chargeable on
the profits out of which the dividends are paid.
This paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid.
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3. The term “dividends” as used in this Article means income from shares or
other rights, not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company making the distribution is
a resident.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner
of the dividends, being a resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the holding in
respect of which the dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or Article 14, as
the case may be, shall apply.
5. Where a company which is a resident of a Contracting State derives profits
or income from the other Contracting State, that other State may not impose any tax
on the dividends paid by the company, except insofar as such dividends are paid to a
resident of that other State or insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or a fixed base
situated in that other State, nor subject the company’s undistributed profits to a tax
on the company’s undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income arising in such
other State.
Article 11
INTEREST
1. Interest arising in a Contracting State and paid to a resident of the other
Contracting State shall be taxable only in that other State.
2. The term “interest” as used in this Article means income from debt-claims of
every kind, whether or not secured by mortgage and whether or not carrying a right
to participate in the debtor’s profits, and in particular, income from government
securities and income from bonds or debentures, including premiums and prizes
attaching to such securities, bonds or debentures. Penalty charges for late payment
shall not be regarded as interest for the purpose of this Article.
3. The provisions of paragraph 1 shall not apply if the beneficial owner of the
interest, being a resident of a Contracting State, carries on business in the other
Contracting State in which the interest arises, through a permanent establishment
situated therein, or performs in that other State independent personal services from a
fixed base situated therein, and the debt-claim in respect of which the interest is paid
is effectively connected with such permanent establishment or fixed base. In such
case the provisions of Article 7 or Article 14, as the case may be, shall apply.
4. Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the amount of the
interest, having regard to the debt-claim for which it is paid, exceeds the amount
which would have been agreed upon by the payer and the beneficial owner in the
absence of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments shall remain
taxable according to the laws of each Contracting State, due regard being had to the
other provisions of this Agreement.
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Article 12
ROYALTIES
1. Royalties arising in a Contracting State and paid to a resident of the other
Contracting State shall be taxable only in that other State if such resident is the
beneficial owner of the royalties.
2. The term “royalties” as used in this Article means payments of any kind
received as a consideration for the use of, or the right to use, any copyright of
literary, artistic or scientific work including cinematographic films, films or tapes or
other means for radio or television broadcasting, any patent, trade mark, design or
model, plan, secret formula or process, or industrial, commercial or scientific
equipment, or for information concerning industrial, commercial or scientific
experience (know-how).
3. The provisions of paragraph 1 shall not apply if the beneficial owner of the
royalties, being a resident of a Contracting State, carries on business in the other
Contracting State in which the royalties arise, through a permanent establishment
situated therein, or performs in that other State independent personal services from a
fixed base situated therein, and the right or property in respect of which the royalties
are paid is effectively connected with such permanent establishment or fixed base. In
such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
4. Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the amount of the
royalties, having regard to the use, right or information for which they are paid,
exceeds the amount which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case, the excess part of the
payments shall remain taxable according to the laws of each Contracting State, due
regard being had to the other provisions of this Agreement.
Article 13
CAPITAL GAINS
1. Gains derived by a resident of a Contracting State from the alienation of
immovable property referred to in Article 6 and situated in the other Contracting
State may be taxed in that other State.
2. Gains from the alienation of shares or comparable interests in a company,
the assets of which consist wholly or principally of immovable property, may be
taxed in the Contracting State in which the assets or the principal assets of the
company are situated.
3. Gains from the alienation of movable property forming part of the business
property of a permanent establishment which an enterprise of a Contracting State has
in the other Contracting State or of movable property pertaining to a fixed base
available to a resident of a Contracting State in the other Contracting State for the
purpose of performing independent personal services, including such gains from the
alienation of such a permanent establishment (alone or with the whole enterprise) or
of such fixed base, may be taxed in that other State.
4. Gains from the alienation of ships or aircraft operated in international traffic
by an enterprise of a Contracting State, or movable property pertaining to the
operation of such ships or aircraft shall be taxable only in that State.
5. Gains from the alienation of any property other than that referred to in
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paragraphs 1 to 4 shall be taxable only in the Contracting State of which the
alienator is a resident.
Article 14
INDEPENDENT PERSONAL SERVICES
1. Income derived by a resident of a Contracting State in respect of
professional services or other activities of an independent character shall be taxable
only in that State except in one of the following circumstances, when such income
may also be taxed in the other Contracting State:
( a ) if he has a fixed base regularly available to him in the other Contracting
State for the purpose of performing his activities. In that case only so
much of the income may be taxed in that other State as is attributable to
that fixed base;
( b ) if his stay in the other Contracting State is for a period or periods
exceeding in the aggregate 183 days in any 12-month period
commencing or ending in the calendar year concerned. In that case only
so much of the income may be taxed in that other State as is derived
from his activities performed in that other State.
2. The term “professional services” includes especially independent scientific,
literary, artistic, educational or teaching activities as well as the independent
activities of physicians, lawyers, engineers, architects, dentists and accountants.
Article 15
DEPENDENT PERSONAL SERVICES
1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other
similar remuneration derived by a resident of a Contracting State in respect of an
employment shall be taxable only in that State unless the employment is exercised in
the other Contracting State. If the employment is so exercised, such remuneration as
is derived therefrom may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a
resident of a Contracting State in respect of an employment exercised in the other
Contracting State shall be taxable only in the first-mentioned State if:
( a ) the recipient is present in the other State for a period or periods not
exceeding in the aggregate 183 days in any 12-month period
commencing or ending in the calendar year concerned, and
( b ) the remuneration is paid by, or on behalf of, an employer who is not a
resident of the other State, and
( c ) the remuneration is not borne by a permanent establishment or a fixed
base which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration
derived in respect of an employment exercised aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting State may be taxed in that
State.
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Article 16
DIRECTORS’ FEES
Directors’ fees and other similar payments derived by a resident of a Contracting
State in his capacity as a member of the board of directors of a company which is a
resident of the other Contracting State may be taxed in that other State.
Article 17
ARTISTES AND SPORTSMEN
1. Notwithstanding the provisions of Articles 14 and 15, income derived by a
resident of a Contracting State as an entertainer, such as a theatre, motion picture,
radio or television artiste, or a musician, or as a sportsman, from his personal
activities as such exercised in the other Contracting State, may be taxed in that other
State.
2. Where income in respect of personal activities exercised by an entertainer or
a sportsman in his capacity as such accrues not to the entertainer or sportsman
himself but to another person, that income may, notwithstanding the provisions of
Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.
Article 18
PENSIONS
Subject to the provisions of paragraph 2 of Article 19, pensions and other similar
remuneration paid to a resident of a Contracting State in consideration of past
employment shall be taxable only in that State.
Article 19
GOVERNMENT SERVICE
1. ( a ) Remuneration, other than a pension, paid by a Contracting State or a
local authority thereof to an individual in respect of services rendered to that State or
local authority shall be taxable only in that State.
( b ) However, such remuneration shall be taxable only in the other
Contracting State if the services are rendered in that State and the individual is a
resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of
rendering the services.
2. ( a ) Any pension paid by, or out of funds created by, a Contracting State or a
local authority thereof to an individual in respect of services rendered to that State or
local authority shall be taxable only in that State.
( b ) However, such pension shall be taxable only in the other Contracting
State if the individual is a resident of, and a national of, that State.
3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and
pensions in respect of services rendered in connection with a business carried on by
a Contracting State or a local authority thereof.
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Article 20
STUDENTS AND BUSINESS APPRENTICES
A student or business apprentice who is present in a Contracting State solely for
the purpose of his education or training and who is, or immediately before being so
present was, a resident of the other Contracting State shall be exempt from tax in the
first-mentioned State on payments received from outside that first-mentioned State
for the purposes of his maintenance, education or training.
Article 21
OTHER INCOME
1. Items of income of a resident of a Contracting State, wherever arising, not
dealt with in the foregoing Articles of this Agreement shall be taxable only in that
State.
2. The provisions of paragraph 1 shall not apply to income, other than income
from immovable property as defined in paragraph 2 of Article 6, if the recipient of
such income, being a resident of a Contracting State, carries on business in the other
Contracting State through a permanent establishment situated therein, or performs in
that other State independent personal services from a fixed base situated therein, and
the right or property in respect of which the income is paid is effectively connected
with such permanent establishment or fixed base. In such case the provisions of
Article 7 or Article 14, as the case may be, shall apply.
Article 22
AVOIDANCE OF DOUBLE TAXATION
1. In the case of a resident of Croatia, double taxation shall be avoided as
follows:
Where a resident of Croatia derives income which, in accordance with the
provisions of this Agreement, may be taxed in Malta, Croatia shall allow as a
deduction from the tax on the income of that resident an amount equal to the income
tax paid in Malta. Such deduction shall not, however, exceed that part of the income
tax, as computed before the deduction is given, which is attributable to the income
which may be taxed in Malta. 
2. In the case of a resident of Malta, double taxation shall be avoided as
follows:
( a ) subject to the provisions of the law of Malta regarding the allowance of
a credit against Malta tax in respect of foreign tax, where, in accordance
with the provisions of this Agreement, there is included in a Malta
assessment income from sources within Croatia, the Croatian tax on
such income shall be allowed as a credit against the relative Malta tax
payable thereon; 
( b ) where a company which is a resident of Croatia pays a dividend to a
resident of Malta, the Croatian tax payable by the company paying the
dividend in respect of the profits out of which such dividend is paid
shall be allowed as a credit against the Malta tax payable in respect of
that dividend.
3. Where in accordance with any provision of the Agreement income derived
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by a resident of a Contracting State is exempt from tax in that State, such State may
nevertheless, in calculating the amount of tax on the remaining income of such
resident, take into account the exempted income.
Article 23
NON-DISCRIMINATION
1. Nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected therewith which is
other or more burdensome than the taxation and connected requirements to which
nationals of that other State in the same circumstances, in particular with respect to
residence, are or may be subjected. This provision shall, notwithstanding the
provisions of Article 1, also apply to persons who are not residents of one or both of
the Contracting States.
2. The taxation on a permanent establishment which an enterprise of a
Contracting State has in the other Contracting State shall not be less favourably
levied in that other State than the taxation levied on enterprises of that other State
carrying on the same activities.
3. This provision shall not be construed as obliging a Contracting State to grant
to residents of the other Contracting State any personal allowances, reliefs and
reductions for taxation purposes on account of civil status or family responsibilities
which it grants to its own residents.
4. Except where the provisions of paragraph 1 of Article 9, paragraph 4 of
Article 11, or paragraph 4 of Article 12 apply, interest, royalties and other
disbursements paid by an enterprise of a Contracting State to a resident of the other
Contracting State shall, for the purpose of determining the taxable profits of such
enterprise, be deductible under the same conditions as if they had been paid to a
resident of the first-mentioned State.
5. Enterprises of a Contracting State, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the first-mentioned State to any taxation
or any requirement connected therewith which is other or more burdensome than the
taxation and connected requirements to which other similar enterprises of the first-
mentioned State are or may be subjected.
6. The provisions of this Article shall, notwithstanding the provisions of
Article 2, apply to taxes of every kind and description which are the subject of this
Agreement.
Article 24
MUTUAL AGREEMENT PROCEDURE
1. Where a person considers that the actions of one or both of the Contracting
States result or will result for him in taxation not in accordance with the provisions
of this Agreement, he may, irrespective of the remedies provided by the domestic
law of those States, present his case to the competent authority of the Contracting
State of which he is resident or, if his case comes under paragraph 1 of Article 23, to
that of the Contracting State of which he is a national. The case must be presented
within three years from the first notification of the action resulting in taxation not in
accordance with the provisions of the Agreement.
2. The competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at a satisfactory solution, to resolve the
14 g S.L.123.48
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF CROATIA
case by mutual agreement with the competent authority of the other Contracting
State, with a view to the avoidance of taxation which is not in accordance with the
Agreement. Any agreement reached shall be implemented notwithstanding any time
limits in the domestic law of the Contracting States.
3. The competent authorities of the Contracting States shall endeavour to
resolve by mutual agreement any difficulties or doubts arising as to the
interpretation or application of the Agreement. They may also consult together for
the elimination of double taxation in cases not provided for in the Agreement.
4. The competent authorities of the Contracting States may communicate with
each other directly for the purpose of reaching an agreement in the sense of the
preceding paragraphs. When it seems advisable in order to reach agreement to have
an oral exchange of opinions, such exchange may take place through a Commission
consisting of representatives of the competent authorities of the Contracting States.
Article 25
EXCHANGE OF INFORMATION
1. The competent authorities of the Contracting States shall exchange such
information as is necessary for carrying out the provisions of this Agreement or of
the domestic laws of the Contracting States concerning taxes covered by the
Agreement insofar as the taxation thereunder is not contrary to the Agreement. The
exchange of information is not restricted by Article 1. Any information received by a
Contracting State shall be treated as secret in the same manner as information
obtained under the domestic laws of that State and shall be disclosed only to persons
or authorities (including courts and administrative bodies) involved in the
assessment or collection of, the enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes covered by the Agreement. Such
persons or authorities shall use the information only for such purposes. They may
disclose the information in public court proceedings or in judicial decisions.
2. In no case shall the provisions of paragraph 1 be construed so as to impose
on a Contracting State the obligation:
( a ) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other Contracting State;
( b ) to supply information which is not obtainable under the laws or in the
normal course of the administration of that or the other Contracting
State;
( c ) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or
information, the disclosure of which would be contrary to public policy
( ordre public ).
Article 26
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS
Nothing in this Agreement shall affect the fiscal privileges of members of
diplomatic missions or consular posts under the general rules of international law or
under the provisions of special agreements.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF CROATIA g S.L.123.48 15
Article 27
ENTRY INTO FORCE
1. The Contracting States shall notify each other, through diplomatic channels,
that the internal legal procedures necessary for the entry into force of this Agreement
have been complied with.
2. This Agreement shall enter into force thirty days after the date of receipt of
the later of the notifications referred to in paragraph 1 and its provisions shall have
effect:
( a ) in the case of Croatia, in respect of taxes on income derived during the
taxable years beginning on or after the first day of January immediately
following the date on which the Agreement enters into force;
( b ) in the case of Malta, in respect of taxes on income derived during any
calendar year or accounting period, as the case may be, beginning on or
after the first day of January immediately following the date on which
the Agreement enters into force.
Article 28
DENUNCIATION
This Agreement shall remain in force indefinitely but either of the Contracting
States may, on or before the 30th day of June in any calendar year beginning after
the expiration of a period of five years from the date of its entry into force, give
written notice of denunciation to the other Contracting State through diplomatic
channels. In such event this Agreement shall cease to have effect:
( a ) in the case of Croatia, in respect of taxes on income derived during the
taxable years beginning on or after the first day of January immediately
following the date on which the notice of denunciation is given;
( b ) in the case of Malta, in respect of taxes on income derived during any
calendar year or accounting period, as the case may be, beginning on or
after the first day of January immediately following the date on which
the notice of denunciation is given.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have
signed this Agreement.
DONE at Rome, on the 21st day of October, 1998, in duplicate in the Croatian and
English languages, both texts being equally authentic. 
Henry G. De Gabriele Dr Davorin Rudolf
For the Republic of Malta For the Republic of Croatia
16 g S.L.123.48
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF CROATIA
PROTOCOL
At the moment of signing the Agreement between the Republic of Croatia and
Malta for the Avoidance of Double Taxation with respect to Taxes on Income, the
undersigned have agreed that the following provisions shall form an integral part of
the Agreement.
Concerning Article 10, it is understood that dividends are not subject to Croatian
tax. Should there be any change in this system or in the full imputation system
presently applied in Malta regarding the taxation of company profits in Malta and
the subsequent distribution of such profits to the company’s shareholders, the
Contracting States shall consult each other to reconsider the provisions of that
Article.
IN WITNESS WHEREOF, the undersigned, being duly authorised thereto, have
signed this Protocol.
Done at Rome on the 21st day of October 1998 in duplicate in the Croatian and
English languages, both texts being equally authentic.
Henry G. De Gabriele Dr Davorin Rudolf
For the Republic of Malta For the Republic of Croatia
