DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 1
SUBSIDIARY LEGISLATION 123.46
DOUBLE TAXATION RELIEF ON TAXES ON 
INCOME WITH THE REPUBLIC OF KOREA ORDER
21st March, 1998
LEGAL NOTICE 18 of 1999. 
Title.
on Income with the Republic of Korea Order.
Arrangements to 
have effect.
2. It is hereby declared -
( a ) that the arrangements specified in the Convention set
out in the Schedule to this Order have been made with
the Government of the Republic of Korea with a view
to affording relief from double taxation in relation to
the following taxes imposed by the laws of the
Republic of Korea:
(i) the income tax;
(ii) the corporation tax;
(iii) the inhabitant tax; and
(iv) the special tax for rural development;
( b ) that it is expedient that those arrangements should
have effect.
2 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
SCHEDULE
CONVENTION
BETWEEN THE REPUBLIC OF MALTA 
AND 
THE REPUBLIC OF KOREA 
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION 
WITH RESPECT TO TAXES ON INCOME
The Government of the Republic of Malta and the Government of the Republic of
Korea, desiring to conclude a Convention for the avoidance of double taxation and
the prevention of fiscal evasion with respect to taxes on income, have agreed as
follows:
ARTICLE 1
Personal Scope
This Convention shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2
Taxes Covered
1. The existing taxes to which this Convention shall apply are:
( a ) in the case of Korea:
(i) the income tax;
(ii) the corporation tax;
(iii) the inhabitant tax; and
(iv) the special tax for rural development;
(hereinafter referred to as "Korean tax");
( b ) in the case of Malta: 
the income tax;
(hereinafter referred to as "Malta tax").
2. This Convention shall apply also to any identical or substantially similar
taxes which are imposed after the date of signature of the Convention in addition to,
or in place of, the existing taxes. The competent authorities of the Contracting States
shall notify each other of any substantial changes which have been made in their
respective taxation laws.
ARTICLE 3
General Definitions
1. For the purposes of this Convention, unless the context otherwise requires:
( a ) the term "Korea" means the territory of the Republic of Korea including any
area adjacent to the territorial sea of the Republic of Korea which, in accordance
with international law, has been or may hereafter be designated under the laws of the
Republic of Korea as an area within which the sovereign rights of the Republic of
Korea with respect to the sea-bed and sub-soil and their natural resources may be
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 3
exercised;
( b )  the term "Malta", 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 sea of the Republic
of Malta which, in accordance with international law, has been or may hereafter be
designated, under the law of the Republic of Malta concerning the Continental Shelf,
as an area within which the rights of the Republic of Malta with respect to the sea-
bed and sub-soil and their natural resources may be exercised;
( c ) the terms "a Contracting State" and "the other Contracting State" mean the
Republic of Korea or the Republic of Malta, as the context requires;
( d ) the term "tax" means Korean tax or Malta tax, as the context requires;
( 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 "national" means:
(i) in respect of Korea, all individuals possessing the nationality of Korea
and all legal persons, partnerships, associations and other entities
deriving their status as such from the laws in force in Korea;
(ii) in respect of Malta, all individuals who are citizens of Malta and all
legal persons, partnerships, associations and other entities deriving their
status as such from the laws in force in Malta;
( i ) the term "international traffic" means any transport by a ship, aircraft or
road vehicle operated by an enterprise of a Contracting State, except when the ship,
aircraft or road vehicle is operated solely between places in the other Contracting
State;
( j ) the term "competent authority" means:
(i) in the case of Korea, the Minister of Finance and Economy or his
authorised representative;
(ii) in the case of Malta, the Minister responsible for fmance or his
authorised representative.
2. As regards the application of the Convention 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
Convention applies.
ARTICLE 4
Resident
1. For the purposes of this Convention, 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 head or main office, 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.
4 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
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 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 solely 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 solely 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 solely 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 solely of the State in which its place of effective management is situated.
ARTICLE 5
Permanent Establishment
1. For the purpose of this Convention, 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 including an offshore drilling site.
3. A building site or construction or installation project, or supervisory
activities in connection therewith, shall constitute a permanent establishment
provided that such site, project or activities last for 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;
( 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
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 5
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. An enterprise of a Contracting State shall be deemed to have a permanent
establishment in the other Contracting State if, for more than nine months:
( a ) substantial equipment is in that other State being used or installed by,
for or under contract with, the enterprise;
( b ) it carries on supervisory activities in that State in connection with the
use of equipment referred to in sub-paragraph ( a ).
6. Notwithstanding the provisions of paragraphs 1 and 2, where a person -
other than an agent of independent status to whom paragraph 7 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.
7. 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.
8. 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.
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.
6 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
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 or with other enterprises
with which it deals.
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 Convention, then the provisions of those Articles shall not be
affected by the provisions of this Article.
ARTICLE 8
International Traffic
1. Profits of an enterprise of a Contracting State from the operation of ships,
aircraft or road vehicles in international traffic shall be taxable only in that State.
2.  The provisions of paragraph 1 shall also apply to profits derived from the
participation in a pool, a joint business or an international operating agency.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 7
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 that 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
Convention 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 where the dividends are paid by a company which is a resident of
Korea to a resident of Malta who is the beneficial owner of the dividends the tax so
charged shall not exceed:
( a ) 5 per cent of the gross amount of the dividends if the beneficial owner is
a company (other than a partnership) which holds directly at least 25 per
cent of the capital of the company paying the dividends;
( b ) 15 per cent of the gross amount of the dividends in all other cases.
3. Where the dividends are paid by a company which is a resident of Malta to a
resident of Korea 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.
4. Paragraphs 2 and 3 shall not affect the taxation of the company in respect of
the profits out of which the dividends are paid.
5. The term "dividends" as used in this Article means income from shares,
" jouissance " shares or " jouissance " rights, mining shares, founders’ shares or other
8 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
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.
6. 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.
7. 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 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 10 per cent of the gross
amount of the interest.
3. Notwithstanding the provisions of paragraph 2:
( a ) interest arising in Malta and paid to the Korean Government, the local
Government, the Bank of Korea, the Export Import Bank of Korea or
the Korea Development Bank shall be exempt from Malta tax;
( b ) interest arising in Korea and paid to the Malta Government, the Central
Bank of Malta or the Malta Development Corporation shall be exempt
from Korean tax;
( c ) interest arising in a Contracting State and paid to any financial
institution of the other Contracting State performing functions of a
governmental nature as may be specified and agreed upon in letters
exchanged between the competent authorities of the Contracting States
shall be exempt from tax in the first-mentioned State;
( d ) interest paid in connection with the sale on credit of any industrial,
commercial or scientific equipment or paid in connection with the sale
on credit of any merchandise by one enterprise to another enterprise
shall be taxable only in the Contracting State of which the beneficiary is
a resident.
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
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 9
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.
5. The provisions of paragraphs 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 14, 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 political subdivision, a local authority 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 speciaI 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
Convention.
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 cinematograph films, any patent, trade
mark, design or model, plan, secret formula or process, or for the use of, or the right
to use, industrial, commercial, or scientific equipment, or for information concerning
industrial, commercial or scientific experience.
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. Royalties shall be deemed to arise in a Contracting State when the payer is
that State itself, a political subdivision, a local authority or a resident of that State.
Where, however, the person paying the royalties, whether he is a resident of a
10 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
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.
5. 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 Convention.
ARTICLE 13
Alienation of Property
1. Income or 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. Income or 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. 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 with the whole
enterprise) or of such fixed base, may be taxed in that other State.
4. Income or gains from the alienation of ships, aircraft or 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 of which
the enterprise is a resident.
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 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. 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
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 11
( b ) if his stay in the other Contracting State is for a period or periods
amounting to or exceeding in the aggregate 183 days during any
calendar year.
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, 19 and 21, 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 exercisec
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 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.
3. Notwithstanding the preceding provisions of this Article, remuneration in
respect of an employment exercised aboard a ship, aircraft or road vehicle operated
in international traffic by an enterprise of a Contracting State may be taxed in that
State.
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, or other comparable body
however described, of a company which is a resident of the other Contracting State
may be taxed in that other Contracting State.
ARTICLE 17
Artistes and Athletes
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 an athlete, 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
an athlete in his capacity as such accrues not to the entertainer or athlete 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
athlete are exercised.
3. The provisions of paragraphs 1 and 2 shall not apply to remuneration or
12 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
profits, salaries, wages and similar income derived from activities performed in a
Contracting State by entertainers or athletes if their visit to that State is substantially
supported from the public funds of the other Contracting State, including those of
any political subdivision, a local authority or statutory body thereof, nor to income
derived by a non-profit making organisation in respect of such activities provided no
part of its income is payable to, or is otherwise available for the personal benefit of
its proprietors, members or shareholders.
ARTICLE 18
Pensions
1.  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.
2. Notwithstanding the provisions of paragraph 1, pensions and other payments
made under the social security legislation of a Contracting State may be taxed in that
State.
ARTICLE 19
Government Service
1. ( a ) Remuneration, other than a pension, paid by a Contracting State or a
political subdivision or a local authority or a statutory body thereof to an individual
in respect of services rendered to that State or subdivision or authority or statutory
body, 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
political subdivision or a local authority or a statutory body thereof to an individual
in respect of services rendered to that State or subdivision or authority or statutory
body 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 political subdivision or a local authority or a statutory body
thereof.
4. The provisions of paragraphs 1 and 2 of this Article shall likewise apply in
respect of remuneration or pensions paid, in the case of Korea, by the Bank of Korea,
the Export-Import Bank of Korea, the Korea Development Bank, the Korea Trade
Promotion Corporation and other Government owned institutions performing
functions of a governmental nature.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 13
ARTICLE 20
Students and Trainees
Payments which a student or business apprentice 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 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 21
Professors and Teachers
1. Remuneration which a professor or teacher 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 State for a period not exceeding two years for the
purpose of carrying out advanced study or research or for teaching at a university,
college, school or other educational institution receives for such work shall not be
taxed in that State, provided that such remuneration is derived by him from outside
that State.
2. This Article shall not apply to income from reasearch if such research is
undertaken primarily for the private benefit of a specific person or persons.
ARTICLE 22
Other Income
1. Items of income of a resident of a Contracting State, wherever arising, not
dealt with in the foregoing Articles of this Convention 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 23
Elimination of Double Taxation
1. In the case of Korea, double taxation shall be eliminated as follows:
Subject to the provisions of Korean tax law regarding the allowance as a credit
against Korean tax of tax payable in any country other than Korea (which shall not
affect the general principle hereof), the Malta tax payable (excluding in the case of a
dividend, tax payable in respect of the profits out of which the dividend is paid)
under the laws of Malta and in accordance with this Convention, whether directly or
by deduction, in respect of income from sources within Malta shall be allowed as a
credit against Korean tax payable in respect of that income. The credit shall not,
however, exceed that proportion of Korean tax which the income from sources
within Malta bears to the entire income subject to Korean tax.
14 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
2. In the case of Malta, double taxation shall be eliminated as follows:
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 Convention, there is included in a Malta assessment income from sources
within Korea, the Korean tax payable on such income shall be allowed as a credit
against the relative Malta tax payable thereon.
3. For the purposes of credit referred to in paragraphs 1 and 2, the terms "Malta
tax payable" in paragraph 1 and "Korean tax payable" in paragraph 2 in respect of
dividends in Article 10 or interest in Article 11 shall be deemed to include the
amount of tax which would have been payable under the taxation laws of the
Contracting States and in accordance with this Convention but for the legal
provisions concerning tax exemption, reduction or other tax incentives of the
Contracting States for the promotion of economic development.
4. Where the Convention provides that income arising in a Contracting State
shall be relieved from tax in that State, either in full or in part and, under the law in
force in the other Contracting State, such income is subject to tax by reference to the
amount thereof which is remitted to or received in that other State and not by
reference to the full amount thereof, then the relief to be allowed in the first-
mentioned State shall apply only to so much of the income as is remitted to or
received in the other State.
ARTICLE 24
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 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. 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.
3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of
Article 11, or paragraph 5 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.
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 the first-
mentioned State are or may be subjected.
5. The provisions of this Article shall, notwithstanding the provisions of
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 15
Article 2, apply to taxes of every kind and description.
ARTICLE 25
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 Convention, 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 24,
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 Convention.
2. The competent authority of a Contracting State 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 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 Convention. 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 Convention. They may also consult together for
the elimination of double taxation in cases not provided for in the Convention.
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.
ARTICLE 26
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 Convention or of
the domestic laws of the Contracting States concerning taxes covered by the
Convention insofar as the taxation thereunder is not contrary to the Convention. 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 Convention. 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 of the other Contracting
State;
16 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
( 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 27
Diplomatic Agents and Consular Officers
Nothing in this Convention shall affect the fiscal privileges of diplomatic agents
or consular officers under the general rules of international law or under the
provisions of special agreements.
ARTICLE 28
Entry into Force
1. This Convention shall be ratified and the instruments of ratification shall be
exchanged at Valletta as soon as possible. The Convention shall enter into force on
the thirtieth day after the date of exchange of the instruments of ratification.
2. This Convention shall have effect:
( a ) in Korea:
(i) in respect of taxes withheld at source on or after the first day of
January in the year next following that in which this Convention
enters into force; and
(ii) in respect of other taxes for taxation years beginning on or after
the first day of January in the year next following that in which
this Convention enters into force.
( b ) in Malta:
in respect of Malta tax for any year of assessment beginning on or after
the first day of January in the second year immediately following the
year in which this Convention enters into force.
ARTICLE 29
Termination
This Convention shall remain in force indefinitely but either Contracting State
may, on or before the thirtieth day of June in any calendar year from the fifth year
following that in which this Convention entered into force, give to the other
Contracting State through diplomatic channels, written notice of termination and, in
such event, this Convention shall cease to have effect:
( a ) in Korea:
(i) in respect of taxes withheld at source on or after the first day of
January in the calendar year next following that in which the
notice is given; and
(ii) in respect of other taxes for taxation years beginning on or after
the first day of January in the calendar year next following that in
which the notice is given.
( b ) in Malta:
in respect of Malta tax in any year of assessment beginning on or after
the first day of January in the second calendar year next following that
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA [ S.L.123.46 17
in which the notice is given.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their
respective Governments, have signed this Convention.
DONE in duplicate at Valletta this 25th day of March of the year one thousand
nine hundred and ninety-seven in the Korean and English languages, both texts being
equally authentic.
PROTOCOL
At the moment of signing the Convention between the Government of the
Republic of Korea and the Government of the Republic of Ma1ta for the avoidance
of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on
Income, the undersigned have agreed that the following provisions shall form an
integral part of the Convention.
1. In respect of Article 2 "Taxes Covered", it is understood that the Convention
shall not apply to tax paid or payable in Malta at the rate provided for in 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.
2. In respect of Article 7 "Business Profits", it is understood that the provisions
of Article 7 shall not affect the provisions of the law of a Contracting State regarding
the taxation of profits from the business of insurance.
3. In respect of Article 8 "International Traffic":
( a ) in respect of paragraph 1, profits from the operation of vessels engaged
in fishing, dredging or hauling activities in international waters, shall be
treated as income falling under this paragraph; and
( b ) it is understood that Korea shall exempt the value added tax on the
operation of ships, aircraft or road vehicles in international traffic by an
enterprise of Malta insofar as Malta shall not impose any tax in Malta
similar to the value added tax of Korea on the operation of ships,
aircraft or road vehicles in international traffic by an enterprise of
Korea.
4. In respect of Article 10 "Dividends", it is understood that, 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. It is also understood that
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.
5. In respect of paragraph 3 of Article 23 "Elimination of Double Taxation" it
is understood that the provisions of that paragraph shall apply during a period of 10
years starting from the first day of the year next following that in which the
JOSEPH P. PORTELLI 
FOR THE GOVERNMENT OF 
THE REPUBLIC OF MALTA
DOO BYONG SHIN
FOR THE GOVERNMENT OF 
THE REPUBLIC OF KOREA
18 [ S.L.123.46
DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE REPUBLIC OF KOREA
Convention enters into force in accordance with the provisions of Article 28. The
competent authorities of the Contracting States will consult each other to determine
whether the period of application shall be extended.
IN WITNESS WHEREOF, the undersigned have signed this ProtocoI which shall
have the same force and validity as if it were inserted word by word in the
Convention.
DONE in duplicate at Valletta this 25th day of March of the year one thousand
nine hundred and ninety-seven in the Korean and English languages, both texts being
equally authentic.
JOSEPH P. PORTELLI 
FOR THE GOVERNMENT OF 
THE REPUBLIC OF MALTA
DOO BYONG SHIN
FOR THE GOVERNMENT OF 
THE REPUBLIC OF KOREA
