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SUBSIDIARY LEGISLATION 123.42
DOUBLE TAXATION RELIEF ON TAXES ON 
INCOME WITH ROMANIA ORDER
16th August, 1996
LEGAL NOTICE 65 of 1997. 
Title.
on Income with Romania 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 Government of Romania with a view to affording
relief from double taxation in relation to the following
taxes imposed by the laws of Romania:
(i) the tax on income derived by individuals;
(ii) the tax on profit;
(iii) the tax on salaries and other similar
remuneration;
(iv) the tax on dividends;
(v) the tax on agricultural income;
( b ) that it is expedient that those arrangements should
have effect.
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SCHEDULE
AGREEMENT BETWEEN THE GOVERNMENT OF MALTA
AND THE GOVERNMENT OF ROMANIA 
FOR THE AVOIDANCE OF DOUBLE TAXATION 
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of Malta and the Government of Romania, desiring to conclude
an Agreement for the avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income, and to promote and strengthen the
economic relations between the two countries on the basis of national sovereignty
and respect of independence, full equal rights, mutual advantage and non-
interference in the internal affairs, 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 by each of the
Contracting States or by its territorial - administrative units, 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 gains from the alienation of
movable or immovable property.
3. The existing taxes to which this Agreement shall apply are in particular:
( a ) in the case of Romania:
(i) the tax on income derived by individuals;
(ii) the tax on profit;
(iii) the tax on salaries and other similar remuneration;
(iv) the tax on dividends; and
(v) the tax on agricultural income;
(hereinafter referred to as "Romanian tax");
( b ) in the case of Malta:
the income tax;
(hereinafter referred to as "Malta tax").
4. This Agreement shall also apply to any identical or substantially similar
taxes which are imposed after the date of signature of this Agreement in addition to,
or in place of, the existing taxes. The competent authorities of the Contracting States
shall notify each other of any significant changes which have been made in their
respective taxation laws.
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ARTICLE 3
General Definitions
1. For the purposes of this Agreement, unless the context otherwise requires:
( a ) the terms "a Contracting State" and "the other Contracting State" mean
Romania or Malta as the context requires;
( b ) the term "Romania" means Romania and, used in a geographical sense,
indicates the territory of Romania including its territorial sea as well as the exclusive
economic zone over which Romania exercises sovereignty, sovereign rights and
jurisdiction in accordance with its internal law and with the international law,
concerning the exploration and exploitation of the natural, biological and mineral
resources existing in the sea waters, sea bed and subsoil of these waters;
( c ) the term "Malta" means the Republic of Malta and, when used in a
geographical sense, the term "Malta" 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, in accordance
with international law, has been or may hereafter be designated, under the law of
Malta concerning the Continental Shelf, as an area within which the rights of Malta
with respect to the sea bed and subsoil and their natural resources may be exercised;
( d ) the term "person" includes an individual, a company and any other body of
persons;
( e ) the term "company" means any body corporate or any entity which is treated
as a body corporate for tax purposes;
( f ) the terms "enterprise of a Contracting State" and/or "enterprise of the other
Contracting State" mean, respectively, an enterprise carried on by a resident of a
Contracting State and/or an enterprise carried on by a resident of the other
Contracting State;
( g ) the term "nationals" means:
(i) in respect of Romania, all individuals possessing the citizenship of
Romania and all legal persons or other entities set up under its own
legislation;
(ii) in respect of Malta, any citizen of Malta and any legal person,
partnership or association deriving its status as such in accordance with
its own legislation;
( h ) the term "international traffic" means any transport by a ship, boat, aircraft,
railway or road vehicle operated by an enterprise which has its place of effective
management in a Contracting State, except when the ship, boat, aircraft, railway or
road vehicle is operated solely between places in the other Contracting State;
( i ) the term "competent authority" means:
(i) in the case of Romania, the Minister of Finance or his authorized
representative;
(ii) in the case of Malta, the Minister responsible for finance or his
authorized representative.
2. In the application of this Agreement by a Contracting State any term not
otherwise defined shall, unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the taxes to which this
Agreement applies.
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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.
2. Where by reason of the provisions of paragraph 1 an individual is a resident
of both Contracting States, then his status shall be determined as follows:
( a ) he shall be deemed to be a resident solely of the Contracting State in
which he has a permanent home available to him; if he has a permanent
home available to him in both Contracting States, he shall be deemed to
be a resident solely of the Contracting State with which his personal and
economic relations are closer (centre of vital interests);
( b ) if the Contracting 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 Contracting State, he shall be deemed to be a resident
solely of the Contracting State in which he has an habitual abode;
( c ) if he has an habitual abode in both Contracting States or in neither of
the Contracting States, he shall be deemed to be a resident solely of the
Contracting State of which he is a national;
( d ) if he is a national of both Contracting States or of neither of the
Contracting States, 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 solely of the Contracting 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;
( f ) a mine, an oil or gas well, a quarry or any other place of extraction of
natural resources;
( g ) a building site or construction or assembly project or supervisory
activities in connection therewith which continues for more than 12
months;
( h ) the furnishing of services, including consultancy services, by an
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enterprise of a Contracting State through its employees or other
personnel, where activities of that nature continue in the other
Contracting State for a period or periods aggregating more than 183
days within any twelve-month period.
3. 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;
( 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
advertising, for supply of information, for scientific research or for
similar activities which have a preparatory or auxiliary character for the
enterprise;
( f ) the maintenance of goods or merchandise exposed by the enterprise in a
fair or an exhibition which are sold after the closing of the said fair or
exhibition.
4. Notwithstanding the provisions of paragraphs 1 and 2, where a person -
other than an agent of an independent status to whom paragraph 5 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 3 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.
5. An enterprise of a Contracting State shall not be deemed to have a
permanent establishment in the other Contracting State merely because it carries on
business in that other State through a broker, general commission agent or any other
agent of an independent status, where 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 the enterprise, he shall not be considered an agent of
an independent status within the meaning of this paragraph, if it is shown that the
transactions between the agent and the enterprise were not made under arm’s length
conditions.
6. 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
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property (including income from agriculture and 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 immovable 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, aircraft, railway and road vehicles shall not be regarded as
immovable property.
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 the determination of the profits of a permanent establishment, there shall
be allowed as deductions expenses of the enterprise, being expenses which are
incurred for the purposes of the permanent establishment (including executive and
general administrative expenses so incurred) and which would be deductible if the
permanent establishment were an independent entity which paid those expenses,
whether incurred in the Contracting State in which the permanent establishment is
situated or elsewhere.
4. The profits to be attributed to a permanent establishment shall be determined
on the basis of separate business books kept by the permanent establishment. If such
books do not constitute an adequate basis for the purposes of determining the profits
of the permanent establishment, then such profits may be determined on the basis of
an apportionment of the total profits of the enterprise to its various parts. The
method of apportionment adopted shall, however, be such that the result shall be in
accordance with the principles embodied in this Article. If necessary, the competent
authorities of the Contracting States shall endeavour to agree on the method for
apportioning the profits of the enterprise.
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
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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.
ARTICLE 8
International Traffic
1. Profits from the operation of ships, boats, aircraft, railway or road vehicles
in international traffic shall be taxable only in the Contracting State in which the
place of effective management of the enterprise is situated.
2. If the place of effective management of a shipping enterprise is aboard a
ship or boat, then it shall be deemed to be situated in the Contracting State in which
the home harbour of the ship or boat is situated, or, if there is no such home harbour,
in the Contracting State of which the operator of the ship or boat is a resident.
3. The provisions of paragraph 1 shall also apply to profits from the
participation in a pool, a joint business or an international operating agency.
4. Notwithstanding the provisions of paragraph 1 of this Article and of Article
7, the profits derived by an enterprise of a Contracting State from the operation of
ships, boats, aircraft, railway or road vehicles used mainly for transport exclusively
between places situated in a Contracting State are taxable in that State.
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 shall 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
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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 law of
that State, but:
( a ) where the dividends are paid by a company resident of Romania to a
resident of Malta who is the beneficial owner thereof, the Romanian tax
so charged shall not exceed 5 per cent 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 Romania who is the beneficial owner thereof, the Malta
tax so charged shall not exceed that chargeable on the company paying
the dividends in respect of the profits so distributed and in any case
shall not exceed 30 per cent of the gross amount of the dividends.
The competent authorities of the Contracting States shall by mutual
agreement settle the mode of application of these limitations.
This paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid.
3. The term "dividends" as used in this Article means income from shares,
" jouissance " shares, or " jouissance " rights, mining shares, founders’ 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 15, 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.
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ARTICLE 11
Interest
1. Interest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State in which
it arises and according to the laws of that State, but if the recipient is the beneficial
owner of the interest, the tax so charged shall not exceed 5 per cent of the gross
amount of the interest.
3. Notwithstanding the provisions of paragraph 2, interest arising in a
Contracting State shall be exempt from tax in that State if it is derived and
beneficially owned by the Government of the other Contracting State, or a
territorial-administrative unit thereof or any agency or bank unit or institution of that
Government, or a territorial administrative unit or if the debt-claims of a resident of
the other Contracting State are warranted, insured, or directly or indirectly financed
by a financial institution wholly owned by the Government of the other Contracting
State.
4. 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.
5. The provisions of paragraph 1 and 2 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 15, as the case may be,
shall apply.
6. Interest shall be deemed to arise in a Contracting State when the payer is
that State itself, a territorial-administrative unit or a resident of that State. Where,
however, the person paying the interest, whether he is a resident of a Contracting
State or not, has in a Contracting State a permanent establishment or fixed base in
connection with which the indebtedness on which the interest is paid was incurred,
and such interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the permanent establishment or
fixed base is situated.
7. 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 paid, 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
Commission
1. Commission arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.
2. However, such commission may also be taxed in the Contracting State in
which it arises and according to the laws of that State, but if the recipient is the
beneficial owner of the commission, the tax so charged shall not exceed 10 per cent
of the gross amount of the commission.
3. The term "commission" as used in this Article means a payment made to a
broker, a general commission agent or to any other person assimilated to a broker or
agent by the taxation law of the Contracting State in which such commission arises.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner
of the commission, being a resident of a Contracting State, has, in the other
Contracting State in which the commission arises, a permanent establishment or a
fixed base with which the activity giving rise to the commission is effectively
connected. In such case, the provisions of Article 7 or Article 15, as the case may be,
shall apply.
5. Commission shall be deemed to arise in a Contracting State when the payer
is that State itself, a territorial-administrative unit or a resident of that State. Where,
however, the person paying the commission, whether he is a resident of a
Contracting State or not, has in a Contracting State a permanent establishment in
connection with which the activities for which the payment is made was incurred,
and such commission is borne by such permanent establishment, then such
commission shall be deemed to arise in the Contracting State in which the permanent
establishment is situated.
6. 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
commission, having regard to the activities 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 that 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
Royalties
1. Royalties arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.
2. However, such royalties may also be taxed in the Contracting State in which
they arise and according to the laws of that State, but if the recipient is the beneficial
owner of the royalties, the tax so charged shall not exceed 5 per cent of the gross
amount of the royalties.
3. The term "royalties" as used in this Article means payments or credits,
whether periodical or not, and however described or computed, to the extent to
which they are made as consideration for:
( a ) the use of, or the right to use, any copyright, patent, design or model,
plan, secret formula or process, trademark or other like property or
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right;
( b ) the supply of scientific, technical, industrial or commercial knowledge
or information;
( c ) the supply of any assistance that is ancillary and subsidiary to, and is
furnished as a means of enabling the application or enjoyment of, any
such property or right as is mentioned in sub-paragraph ( a ), or any such
knowledge or information as is mentioned in sub-paragraph ( b );
( d ) the use of, or the right to use:
(i) motion picture films;
(ii) films or video tapes for use in connection with television; or
(iii) tapes for use in connection with radio broadcasting; or
( e ) total or partial forbearance in respect of the use or supply of any
property or right referred to in this paragraph.
4. The provisions of paragraphs 1 and 2 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 15, as
the case may be, shall apply.
5. Royalties shall be deemed to arise in a Contracting State when the payer is
that State itself, a territorial-administrative unit or a resident of that State. Where,
however, the person paying the royalties, whether he is a resident of a Contracting
State or not, has in a Contracting State a permanent establishment or a fixed base in
connection with which the liability to pay the royalties was incurred, and such
royalties are borne by such permanent establishment or fixed base, then such
royalties shall be deemed to arise in the State in which the permanent establishment
or fixed base is situated.
6. 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 14
Income from the Alienation of Property
1. Income or gains from the alienation of immovable property, as defined in
paragraph 2 of Article 6, may be taxed in the Contracting State in which such
property is situated.
2. Income or 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 income or
gains from the alienation of such a permanent establishment (alone or together with
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the whole enterprise) or of such fixed base, may be taxed in the other State.
3. Income or gains from the alienation of ships, boats, aircraft, railway and
road vehicles operated in international traffic or movable property pertaining to the
operation of such means of transportation shall be taxable only in the Contracting
State in which the place of effective management of the enterprise is situated.
4. Income or gains from the alienation of shares 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.
5. Income or gains from the alienation of any property other than that referred
to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which
the alienator is a resident.
ARTICLE 15
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. However, such income may be taxed in the other Contracting State
in the following circumstances:
( a ) if he has a fixed base regularly available to him in the other Contracting
State for the purpose of performing his activities (in which case, only so
much of the income as is attributable to that fixed base may be taxed in
that other Contracting State); or
( b ) if his stay in the other Contracting State is for a period or periods
amounting to or exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the fiscal year concerned.
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 16
Dependent Personal Services
1. Subject to the provisions of Articles 17, 19, 20, 21 and 22, salaries 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 twelve-month period
commencing or ending in the fiscal 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.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH ROMANIA g S.L.123.42 13
3. Notwithstanding the preceding provisions of this Article, remuneration
derived by a resident of a Contracting State in respect of an employment exercised
aboard a ship, boat, aircraft, railway or road vehicle operated in international traffic
may be taxed in the Contracting State in which the place of effective management of
the enterprise is situated.
ARTICLE 17
Directors’ Fees
Directors’ fees and other similar payments derived by a resident of one of the
Contracting States 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 18
Entertainers and Sportsmen
1. Notwithstanding the provisions of Articles 15 and 16, 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, 15 and 16, be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.
3. Income derived from the activities performed within the framework of
exchanges established under cultural or sports agreements concluded between the
two Contracting States shall be exempt from tax.
ARTICLE 19
Pensions
1. Subject to the provisions of paragraph 2 of Article 20, 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 of which he is a resident.
2. Notwithstanding the provisions of paragraph 1, pensions paid and other
payments made under the social security legislation of a Contracting State shall be
taxable only in that State.
ARTICLE 20
Government Service
1. ( a ) Remuneration, other than a pension, paid by a Contracting State or a
territorial-administrative unit thereof to an individual in respect of services rendered
to that State or unit 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:
14 g S.L.123.42
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH ROMANIA
(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
territorial-administrative unit thereof to an individual in respect of services rendered
to that State or unit 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 16, 17 and 19 shall apply to remuneration and
pensions in respect of services rendered in connection with any business carried on
by a Contracting State or a territorial-administrative unit thereof.
ARTICLE 21
Professors, Teachers and Researchers
1. A professor, a teacher or a researcher who makes a temporary visit to a
Contracting State for a period not exceeding two years for the purpose of teaching or
conducting research at a university, college, school or other educational institution,
and who is, or immediately before such visit was, a resident of the other Contracting
State shall be exempt from tax in the first-mentioned Contracting State in respect of
remuneration for such teaching or research.
2. This Article shall not apply to income from research if such research is
undertaken primarily for the private benefit of a specific person or persons.
ARTICLE 22
Students and Trainees
Payments which a student or a trainee who is or was immediately before visiting a
Contracting State a resident of the other Contracting State and who is present in the
first-mentioned Contracting State solely for the purpose of his education or training
receives for the purpose of his maintenance, education or training shall not be taxed
in that State, provided that such payments arise from sources outside that State.
ARTICLE 23
Other Income
1. Items of income of a resident of a Contracting State which are not expressly
mentioned in the foregoing Articles of this Agreement in respect of which he is
subject to tax in that State 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 15, as the case may be, shall apply.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH ROMANIA g S.L.123.42 15
ARTICLE 24
Elimination of Double Taxation
Double taxation shall be eliminated as follows:
1  In the case of Romania, where a resident of Romania derives income or
items of income referred to in Articles 10, 11, 12 and 13, or profits, or gains or
income from the alienation of property which under the law of Malta and in
accordance with this Agreement may be taxed in Malta, Romania shall allow as a
credit against its tax on the income, items of income, profits, gains or on income
from the alienation of property an amount equal to the tax paid in Malta.
The amount of credit, however, shall not exceed the amount of Romanian tax on
that income, items of income, profits or gains, or on income from the alienation of
property computed in accordance with the taxation laws and regulations of Romania.
2. In the case of Malta, 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 Romania, the Romanian tax on such income
shall be allowed as a credit against the relative Malta tax payable thereon.
3. For the purposes of allowance as a credit, the tax payable in Romania or
Malta, as the context requires, shall be deemed to include the tax which is otherwise
payable in a Contracting State but has been reduced or waived by that State under its
legal provisions for tax incentives.
ARTICLE 25
Non-Discrimination
1. The nationals of a Contracting State, whether or not residents of the
mentioned 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 are or may be subjected.
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. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of
Article 11, paragraph 6 of Article 12, or paragraph 6 of Article 13 apply, interest,
commission, 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.
4. 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 that first-
mentioned State are or may be subjected.
5. Nothing in this Article shall be construed as obliging a Contracting State to
grant to individuals who are residents of the other Contracting State any personal
allowances, reliefs and reductions for tax purposes on account of civil status, family
16 g S.L.123.42
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH ROMANIA
responsibilities or any other personal circumstances which it grants to its own
residents.
ARTICLE 26
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 a resident or, if his case comes under paragraph 1 of Article 25,
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 it is not itself able to arrive at a
satisfactory solution, to resolve the 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 27
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
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 or the prevention of fiscal evasion in relation to, the taxes covered by the
Agreement. Such 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
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH ROMANIA g S.L.123.42 17
normal course of the administration of that or of 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 28
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.
ARTICLE 29
Entry into Force
1. The Contracting States shall notify each other that the constitutional
requirements 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 the later of
the notifications referred to in paragraph 1 and its provisions shall have effect 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 30
Termination
This Agreement shall remain in force until terminated by a Contracting State.
Either Contracting State may terminate the Agreement, through diplomatic channels,
by giving notice of termination at least six months before the end of any calendar
year beginning after the expiration of a period of five years from the date of its entry
into force. In such event, the Agreement shall cease to have effect 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 is given.
IN WITNESS WHEREOF the undersigned, being duly authorised by their
respective Governments, have signed this Agreement.
DONE at Bucharest on the 30th November, 1995, in two original copies in the
Romanian and English languages, both texts being equally authentic. In case there is
any divergence of interpretation of the provisions of this Agreement, the English text
shall prevail.
JOHN DALLI
FOR THE GOVERNMENT OF 
MALTA
FLORIN GEORGESCU
FOR THE GOVERNMENT OF 
ROMANIA 
18 g S.L.123.42
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH ROMANIA
PROTOCOL
At the moment of signing the Agreement between the Government of Romania
and the Government of Malta for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income, the two parties have
agreed upon the following provisions, which will form an integral part of the
Agreement:
With reference to Article 2, article 76 of the Income Tax Act in Malta provides
that no double taxation agreement concluded by Malta shall apply to tax paid or
payable in Malta in accordance with the provisions of sub-article (13) of article 56 of
the Income Tax Act concerning the chargeable income of any person engaged in the
production of petroleum produced in Malta or any substantially similar provision
which is imposed after the date of signature of this Agreement.
With reference to Article 7, each Contracting State shall tax the profits from the
business of insurance in accordance with the provisions of its own law.
With reference to Article 10, under the Malta law in force, income tax paid or
payable by a company, as is referable to that part of its profits which is distributed
by way of dividends, is assimilated with the personal income tax of the shareholder
in receipt of such a dividend. In the shareholder’s hands the dividend is charged to
tax gross and the relevant amount of tax, so assimilated, is set off against the
shareholder’s tax liability on his income from all liable sources.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their
respective Governments, have signed this Protocol.
DONE in duplicate at Bucharest this 30th day of November, 1995, in the
Romanian and English languages, all texts being equally authentic. In case there is
any divergence of interpretation of the provisions of this Protocol, the English text
shall prevail.
JOHN DALLI
FOR THE GOVERNMENT OF 
MALTA
FLORIN GEORGESCU
FOR THE GOVERNMENT OF 
ROMANIA 
