DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 1
SUBSIDIARY LEGISLATION 123.10
DOUBLE TAXATION RELIEF ON TAXES ON 
INCOME WITH THE KINGDOM OF THE 
NETHERLANDS ORDER 
31st October, 1980
 LEGAL NOTICE 90 of 1980, as amended by Legal Notice 146 of 1999.
Title.
on Income with the Kingdom of the Netherlands 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 the Kingdom of the Netherlands
with a view to affording relief from double taxation
and preventing fiscal evasion in relation to the
following taxes imposed by the laws of the Kingdom
of the Netherlands:
(i) income tax (de inkomstenbelasting);
(ii) wages tax (de loonbelasting);
(iii) company tax (de vennootschapsbelasting);
(iv) dividend tax (de dividendbelasting); and
(v) capital tax (de vermogensbelasting);
( b ) that it is expedient that those arrangements should
have effect.
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SCHEDULE
AGREEMENT BETWEEN MALTA 
AND THE KINGDOM OF THE NETHERLANDS
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
Malta and the Kingdom of the Netherlands, desiring to conclude an agreement for
the avoidance of double taxation and the prevention of fiscal evasion with respect to
taxes on income and on capital, have agreed as follows:
CHAPTER I
Scope of the Agreement
ARTICLE 1
Personal Scope
This Agreement shall apply to persons who are residents of one or both of the
States.
ARTICLE 2
Taxes Covered
(1) This Agreement shall apply to taxes on income and on capital imposed on
behalf of each of the States or of its political subdivisions or local authorities,
irrespective of the manner in which they are levied.
(2) There shall be regarded as taxes on income and on capital all taxes imposed
on total income, on total capital, or on elements of income or of capital, including
taxes on gains from the alienation of movable or immovable property, taxes on the
total amounts of wages or salaries paid by enterprises, as well as taxes on capital
appreciation.
(3) The existing taxes to which this Agreement shall apply are, in particular:
( a ) in the case of the Netherlands:
-  income tax (de inkomstenbelasting);
-  wages tax (de loonbelasting);
-  company tax (de vennootschapsbelasting);
-  dividend tax (de dividendbelasting);
-  capital tax (de vermogensbelasting);
(hereinafter referred to as "Netherlands tax");
( b ) in the case of Malta:
the income tax and surtax, including prepayments of tax whether made
by deduction at source or otherwise,
(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 States shall notify
to each other any substantial changes which have been made in their respective
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WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 3
taxation laws.
(5) Where under any provision of this Agreement income is relieved from tax in
one of the States, either in full or in part, and, under the law in force in the other
State, a person, in respect of the said 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 under this
Agreement in the first-mentioned State shall apply to so much of the income as is
remitted to or received in the other State.
CHAPTER II
Definitions
ARTICLE 3
General Definitions
(1) In this Agreement, unless the context otherwise requires:
( a ) the term "State" means the Netherlands or Malta, as the context requires; the
term "States" means the Netherlands and Malta;
( b ) the term "the Netherlands" comprises the part of the Kingdom of the
Netherlands that is situated in Europe and the part of the sea-bed and its subsoil
under the North-Sea, over which the Kingdom of the Netherlands has sovereign
rights in accordance with international law;
( c ) the term "Malta" means the Republic of Malta, and, when used in a
geographical sense, means the Island of Malta, the Island of Gozo and the other
islands of the Maltese archipelago, including the territorial waters thereof, and any
area outside the territorial sea of Malta which, in accordance with international law,
has been or may hereafter be designated, under the laws 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" comprises 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 one of the States" and "enterprise of the other State"
mean respectively an enterprise carried on by a resident of one of the States and an
enterprise carried on by a resident of the other State;
( g ) the term "national" means:
(i) in respect of the Netherlands, any individual possessing the nationality
of the Netherlands and any legal person, partnership or association
deriving its status as such from the law in force in the Netherlands;
(ii) in respect of Malta, any citizen of Malta as provided for in Chapter III
of the Constitution of Malta and in the Maltese Citizenship Act, and any
legal person, partnership or association deriving its status as such from
the law in force in Malta;
( h ) the term "international traffic" means any transport by a ship or aircraft
operated by an enterprise which has its place of effective management in one of the
States, except when the ship or aircraft is operated solely between places in the other
State;
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( i ) the term "competent authority" means:
(i) in the case of the Netherlands, the Minister of Finance or his authorized
representative;
(ii) in the case of Malta, the Minister responsible for finance or his
authorized representative.
(2) As regards the application of this Agreement by either of the States, any
term not otherwise defined shall, unless the context otherwise requires, have the
meaning which it has under the laws of that State relating to the taxes which are the
subject of this Agreement.
ARTICLE 4
Fiscal Domicile
(1) For the purposes of this Agreement, the term "resident of one of the States"
means any person who, under the law of that State, is liable to taxation therein by
reason of his domicile, residence, place of management or any other criterion of a
similar nature. The term does not include any person who is liable to tax in that State
in respect only of income from sources therein or capital situated in that State.
(2) For the purposes of this Agreement an individual, who is a member of a
diplomatic or consular mission of one of the States in the other State or in a third
State and who is a national of the sending State, shall be deemed to be a resident of
the sending State if he is submitted therein to the same obligations in respect of taxes
on income and capital as are residents of that State.
(3) Where by reason of the provisions of paragraph (1) an individual is a
resident of both States, then his status shall be determined as follows:
( a ) he shall be deemed to be a resident of the State in which he has a
permanent home available to him. If he has a permanent home available
to him in both States, he shall be deemed to be a resident of the State
with which his personal and economic relations are closest (centre of
vital interests);
( b ) if the State in which he has his centre of vital interests cannot be
determined, or if he has not a permanent home available to him in either
State, he shall be deemed to be a resident of the State in which he has an
habitual abode;
( c ) if he has an habitual abode in both States or in neither of them, he shall
be deemed to be a resident of the State of which he is a national;
( d ) if he is a national of both States or of neither of them the competent
authorities of the States shall settle the question by mutual agreement.
(4) Where by reason of the provisions of paragraph (1), a person other than an
individual is a resident of both States, then it shall be deemed to be a resident of the
State in which its place of effective management is situated.
ARTICLE 5
Permanent Establishment
(1) For the purposes of this Agreement, the term "permanent establishment"
means a fixed place of business in which the business of the enterprise is wholly or
partly carried on.
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(2) The term "permanent establishment" shall include especially:
( a ) a place of management; 
( b ) a branch;
( c ) an office;
( d ) a factory; 
( e ) a workshop;
( f ) a mine, quarry or other place of extraction of natural resources;
( g ) a building site or construction or assembly project or supervisory
activities in connection therewith, where such site, project or activity
continues for more than twelve months.
(3) The term "permanent establishment" shall not be deemed 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 for collecting information, for the
enterprise;
( e ) the maintenance of a fixed place of business solely for the purpose of
advertising, for the supply of information, for scientific research or for
similar activities which have a preparatory or auxiliary character, for
the enterprise.
(4) A person acting in one of the States on behalf of an enterprise of the other
State - other than an agent of an independent status to whom paragraph (5) applies -
shall be deemed to be a permanent establishment in the first-mentioned State if he
has, and habitually exercises in that State, an authority to conclude contracts in the
name of the enterprise, unless his activities are limited to the purchase of goods or
merchandise for the enterprise.
(5) An enterprise of one of the States shall not be deemed to have a permanent
establishment in the other 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.
(6) The fact that a company which is a resident of one of the States controls or is
controlled by a company which is a resident of the other State, or which curries 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.
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CHAPTER III
Taxation of income
ARTICLE 6
Income from Immovable Property
(1) Income from immovable property may be taxed in the State in which such
property is situated.
(2)  The term "immovable property" shall be defined in accordance with the law
of the State in which the property in question is situated. The term shall in any case
include property accessory to immovable property, 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, mineral deposits, sources and other natural resources; ships 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.
(4) The provisions of paragraphs (1) and (2) shall also apply to the income from
immovable property of an enterprise and to income from immovable property used
for the performance of professional services.
ARTICLE 7
Business Profits
(1) The profits of an enterprise of one of the States shall be taxable only in that
State unless the enterprise carries on business in the other 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 one of the
States carries on business in the other State through a permanent establishment
situated therein, there shall in each 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 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 one of the States 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 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 embodied
in this Article.
(5) No profits shall be attributed to a permanent establishment by reason of the
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mere purchase by that permanent establishment of goods or merchandise for the
enterprise.
(6) For the purposes of the preceding paragraphs, the profits to be attributed to
the permanent establishment shall be determined by the same method year by year
unless there is good and sufficient reason to the contrary.
(7) Where profits include items of income which are dealt with separately in
other Articles of this Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article.
ARTICLE 8
Shipping and Air Transport
(1) Profits from the operation of ships or aircraft in international traffic shall be
taxable only in the 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, then it shall be deemed to be situated in the State in which the home harbour of
the ship is situated, or, if there is no such home harbour, in the State of which the
operator of the ship is a resident.
(3) The provisions of paragraph (1) shall also apply to profits derived from the
participation in a pool, a joint business or in an international operating agency.
ARTICLE 9
Associated Enterprises
(1) Where -
( a ) an enterprise of one of the States participates directly or indirectly in
the management, control or capital of an enterprise of the other State, or
( b ) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of one of the States and an enterprise
of the other 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 profits on which an enterprise of one of the States has been charged
to tax in that State are also included in the profits of an enterprise of the other State
and taxed accordingly and the profits so included are profits which would have
accrued to that enterprise of the other State if the conditions made between the
enterprises had been those which would have been made between independent
enterprises, then the first mentioned State shall make an appropriate adjustment to
the amount of tax charged on those profits in the first-mentioned State. In
determining such an adjustment due regard shall be had to the other provisions of
this Agreement in relation to the nature of the income, and for this purpose the
competent authorities of the States shall if necessary consult each other.
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ARTICLE 10
Dividends
(1) Dividends paid by a company which is a resident of one of the States to a
resident of the other State may be taxed in that other State.
(2) Dividends paid by a company which is a resident of the Netherlands to a
resident of Malta may also be taxed in the Netherlands, and according to Netherlands
law, but, if the recipient 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 recipient is a
company 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. 
This paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid.
(3) Dividends paid by a company which is a resident of Malta to a resident of
the Netherlands who is the beneficial owner thereof shall be exempt from any tax in
Malta which is chargeable on dividends in addition to the tax chargeable in respect
of the profits of the company. Furthermore, Malta tax chargeable with respect to
distributed profits of the company shall not exceed 15 per cent of the gross amount
thereof, if the distributed profits consist of gains or profits earned in any year in
respect of which that company is in receipt of any benefit under the provisions
regulating aids to industries in Malta, and the profits are distributed to a company
which is a resident of the Netherlands and which is not charged to Netherlands
company tax with respect to such profits: provided that the receiving company
submits returns and accounts to the taxation authorities of Malta in respect of its
income liable to Malta tax for the relative year of assessment.
This paragraph shall not affect the taxation of the company in respect of the
profits out of which distributions are made, but the recipient of any distributed
profits shall be entitled to any refund which may be available under the law of Malta
on account of the tax paid by the company, if the tax so paid is in excess of that
chargeable on the distributed profits in accordance with the provisions of this
paragraph or of the law of Malta.
(4) The term "dividends" as used in this Article means income from shares,
"jouissance" shares or "jouissance" rights, mining shares, founders' shares or other
rights 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 taxation law
of the State of which the company making the distribution is a resident.
(5) The provisions of paragraphs (1), (2) and (3) shall not apply if the recipient
of the dividends, being a resident of one of the States, carries on business in the
other State of which the company paying the dividends is a resident, through a
permanent establishment situated therein, or performs in that other State
professional 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 a case, the provisions of Article 7 or Article 15,
as the case may be, shall apply.
(6) Where a company which is a resident of one of the States derives profits or
income from the other 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
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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 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 one of the States and paid to a resident of the other State
may be taxed in that other State.
(2) However, such interest may be taxed in the State in which it arises and
according to the law 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 Netherlands Government, the
Central Bank of the Netherlands, the Nederlandse
Financieringsmaatschappij voor Ontwikkelingslanden N.V.
(Netherlands finance company for developing countries), and the
Nederlandse Investeringsbank voor Ontwikkelingslanden N.V.
(Netherlands investment bank for developing countries) shall be exempt
from Malta tax;
( b ) interest arising in the Netherlands and paid to the Malta Government,
the Central Bank of Malta or the Malta Development Corporation shall
be exempt from Netherlands tax;
( c ) the exemptions granted by this paragraph shall also apply to any other
statutory body of one of the States if such body possesses a distinct
legal personality.
(4) The term "interest" as used in this Article means income from Government
securities, income from bonds or debentures, whether or not secured by mortgage
but not carrying a right to participate in profits, and income from debt-claims of
every kind whether or not secured by mortgage, as well as all other income
assimilated to income from money lent by the taxation law of the State in which the
income arises. 
(5) The provisions of paragraphs (1) and (2) shall not apply if the recipient of
the interest, being a resident of one of the States, carries on business in the other
State in which the interest arises, through a permanent establishment situated
therein, or performs in that other State professional 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 a
case, the provisions of Article 7 or Article 15, as the case may be, shall apply.
(6) Interest shall be deemed to arise in one of the States when the payer is that
State itself, a political subdivision, a local authority or a resident of that State.
Where, however, the person paving the interest, whether he is a resident of one of
the States or not, has in one of the States a permanent establishment in connection
with which the indebtedness on which the interest is paid was incurred and such
interest is borne by such permanent establishment, then such interest shall be
deemed to arise in the State in which the permanent establishment is situated.
(7) Where, owing to a special relationship between the payer and the recipient
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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 recipient 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 law of each State, due regard being had to the other provisions of this
Agreement.
ARTICLE 12
Royalties
(1) Royalties arising in one of the States and paid to a resident of the other State
shall be taxable only in that other State if such resident is the beneficial owner of the
royalties and the royalties consist of payments of any kind received as consideration
for the use of, or the right to use, any copyright of literary, artistic or scientific work.
(2) Royalties arising in one of the States and paid to a resident of the other State
may be taxed in that other State if the royalties consist of payments of any kind
received as a consideration for the use of, or the right to use, cinematographic films
or tapes for television or broadcasting, any patent, trade mark, design, model, plan,
secret formula or process, industrial, commercial or scientific equipment, or
information concerning industrial, commercial or scientific experience. However,
such royalties may also be taxed in the State in which they arise, and according to
the law of that State, but if the recipient is the beneficial owner of the royalties, the
tax so charged shall not exceed 10 per cent of the gross amount of such royalties.
(3) The provisions of paragraphs (1) and (2) shall not apply if the recipient of
the royalties, being a resident of one of the States, carries on business in the other
State in which the royalties arise, through a permanent establishment situated
therein, or performs in that other State professional 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 a
case, the provisions of Article 7 or Article 15, as the case may be, shall apply.
(4) Royalties shall be deemed to arise in one of the States 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 one of
the States or not, has in one of the States a permanent establishment in connection
with which the liability to pay the royalties was incurred, and such royalties are
borne by such permanent establishment, then such royalties shall be deemed to arise
in the State in which the permanent establishment is situated.
(5) Where, owing to a special relationship between the payer and the recipient
or between both of them and some other person, the amount of the royalties paid,
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 recipient 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 law of each State, due regard being had to the other
provisions of this Agreement.
ARTICLE 13
Limitation of Articles 10, 11 and 12
International organizations, organs and officials thereof and members of a
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diplomatic or consular mission of a third State, being present in one of the States, are
not entitled, in the other State, to the reductions or exemptions from tax provided for
in Articles 10, 11 and 12 in respect of the items of income dealt with in these
Articles and arising in that other State, if such items of income are not subject to a
tax on income in the first-mentioned State.
ARTICLE 14
Capital Gains
(1) Gains from the alienation of immovable property, as defined in paragraph
(2) of Article 6, may be taxed in the State in which such property is situated.
(2) Gains from the alienation of movable property forming part of the business
property of a permanent establishment which an enterprise of one of the States has in
the other State, or of movable property pertaining to a fixed base available to a
resident of one of the States in the other State for the purpose of performing
professional services, including such gains from the alienation of such a permanent
establishment (alone or together with the whole enterprise) or of such a fixed base,
may be taxed in the other State.
(3) Notwithstanding the provisions of paragraph (2), gains from the alienation
of ships and aircraft operated in international traffic or of movable property
pertaining to the operation of such ships and aircraft, shall be taxable only in the
State in which the place of effective management of the enterprise is situated. For
the purposes of this paragraph the provisions of paragraph (2) of Article 8 shall
apply.
(4) Gains from the alienation of any property other than those mentioned in
paragraphs (1), (2) and (3), shall be taxed only in the State of which the alienator is a
resident.
(5) The provisions of paragraph (4) shall not affect the right of each of the
States to levy according to its own law a tax on gains from the alienation of shares or
"jouissance" rights in a company which is a resident of that State, derived by an
individual who is a resident of the other State but has been a resident of the first-
mentioned State in the course of the last five years preceding the alienation of the
shares or "jouissance" rights.
ARTICLE 15
Independent Personal Services
(1) Income derived by a resident of one of the States in respect of professional
services or other independent activities of a similar character shall be taxable only in
that State unless he has a fixed base regularly available to him in the other State for
the purpose of performing his activities. If he has such a fixed base, the income may
be taxed in the other State but only so much of it as is attributable to that fixed base.
A resident of one of the States performing such professional services or other
independent activities in the other State shall be deemed to have such a fixed base
available to him in that other State if he is present in that other State for a period or
periods exceeding in the aggregate 183 days in the calendar 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.
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ARTICLE 16
Dependent Personal Services
(1) Subject to the provisions of Articles 17, 19, 20 and 21, salaries, wages and
other similar remuneration derived by a resident of one of the States in respect of an
employment shall be taxable only in that State unless the employment is exercised in
the other 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 one of the States in respect of an employment exercised in the other 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 calendar year concerned; and
( b ) the remuneration is paid by, or on behalf of, an employer who is not a
resident of the other State; and
( c ) the remuneration is not borne by a permanent establishment or a fixed
base which the employer has in the other State.
(3) Notwithstanding the preceding provisions of this Article remuneration
derived by a resident of one of the States in respect of an employment exercised
aboard a ship or aircraft in international traffic shall be taxable only in that State.
ARTICLE 17
Directors’ Fees
(1) Directors’ fees and similar payments derived by a resident of the
Netherlands in his capacity as a member of the board of directors of a company
which is a resident of Malta may be taxed in Malta.
(2) Remuneration and other payments derived by a resident of Malta in his
capacity as a "bestuurder" or a "commissaris" of a company which is a resident of
the Netherlands may be taxed in the Netherlands.
ARTICLE 18
Artistes and Athletes
(1) Notwithstanding the provisions of Articles 15 and 16, income derived by
entertainers, such as theatre, motion picture, radio or television artistes, and
musicians, and by athletes, from their personal activities as such, may be taxed in the
State in which these activities are exercised.
(2) Where income in respect of personal activities as such of an entertainer or
athlete accrues not to that entertainer or athlete himself but to another person, that
income may, notwithstanding the provisions of Articles 7, 15 and 16, be taxed in the
State in which the activities of the entertainer or athlete are exercised.
ARTICLE 19
Pensions, Annuities and Social Security Payments
(1) Subject to the provisions of paragraph (2) of Article 20, pensions and other
similar remuneration paid to a resident of one of the States in consideration of past
employment and any annuity shall be taxable only in that State.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 13
(2) However, where such remuneration is not of a periodical nature and it is
paid in consideration of past employment exercised in the other State, or where
instead of the right to annuities a lump sum is paid, this remuneration or this lump
sum may be taxed in the State in which it arises.
(3) Any pension and other payment paid out under the provisions of a social
security system of one of the States to a resident of the other State may be taxed in
the first-mentioned State.
(4) The term, "annuity" means a stated sum paid periodically at stated times
during life or during a specified or ascertainable period of time under an obligation
to make the payments in return for adequate and full consideration in money or
money’s worth.
ARTICLE 20
Government Service
(1) ( a ) Remuneration, other than a pension, paid by one of the States or a
political subdivision or a local authority thereof to any individual in respect of
services rendered to that State or subdivision or local authority thereof may be taxed
in that State.
( b ) However, such remuneration shall be taxable only in the other State if
the services are rendered in that State and the recipient is a resident of that other
State who -
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of
performing the services.
(2) ( a ) Any pension paid by, or out of funds created by, one of the States or a
political subdivision or a local authority thereof to any individual in respect of
services rendered to that State or subdivision or local authority thereof may be taxed
in that State.
( b ) However, such pension shall be taxable only in the other State if the
recipient is a national of and a resident of that State.
(3) The provisions of Articles 16, 17 and 19 shall apply to remuneration or
pensions in respect of services rendered in connection with any trade or business
carried on by one of the States or a political subdivision or a local authority thereof.
ARTICLE 21
Professors and Teachers
(1) Payments which a professor or teacher who is a resident of one of the States
and who is present in the other State for the purpose of teaching or scientific
research for a maximum period of two years in a university, college or other
establishment for teaching or scientific research in that other State, receives for such
teaching or research, shall be taxable only in the first-mentioned State.
(2) This Article shall not apply to income from research if such research is
undertaken not in the public interest but primarily for the private benefit of a specific
person or persons.
14 ġ S.L.123.10
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ARTICLE 22
Students and Trainees
(1) An individual who was a resident of one of the States immediately before
visiting the other State and is temporarily present in that other State solely as a
student at a university, college, school or other similar educational institution in that
other State or as a business apprentice shall, from the date of his first arrival in that
other State in connection with that visit, be exempt from tax in that other State -
( a ) on all remittances from abroad for purposes of his maintenance,
education or training; and
( b ) for a period not exceeding in the aggregate five years, on any
remuneration not exceeding 5000 guilders, or the equivalent in Malta
currency, for each calendar year for personal services rendered in that
other State with a view to supplementing the resources available to him
for such purposes.
(2) An individual who was a resident of one of the States immediately before
visiting the other State and is temporarily present in that other State solely for the
purpose of study, research or training as a recipient of a grant, allowance or award
from a scientific, educational, religious or charitable organisation or under a
technical assistance programme entered into by the Government of one of the States
shall, from the date of his first arrival in that other State in connection with that visit,
be exempt from tax in that other State -
( a ) on the amount of such grant, allowance or award, and
( b ) on all remittances from abroad for the purposes of his maintenance,
education or training.
ARTICLE 23
Other Income
(1) Items of income of a resident of one of the States, wherever arising, not
dealt with in the foregoing Articles of this Agreement shall be taxable only in that
State.
(2) The provisions of paragraph (1) shall not apply if the recipient of the
income, being a resident of one of the States, carries on business in the other State
through a permanent establishment situated therein, or performs in that other State
professional 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 a case, the provisions of Article 7 or Article 15,
as the case may be, shall apply.
CHAPTER IV 
Taxation and Capital
ARTICLE 24 
Capital
(1) Capital represented by immovable property, as defined in paragraph (2) of
Article 6, may be taxed in the State in which such property is situated.
(2) Capital represented by movable property forming part of the business
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 15
property of a permanent establishment of an enterprise, or by movable property
pertaining to a fixed base used for the performance of professional services, may be
taxed in the State in which the permanent establishment or fixed base is situated.
(3) Notwithstanding the provisions of paragraph (2), ships and aircraft operated
in international traffic and movable property pertaining to the operation of such
ships and aircraft shall be taxable only in the State in which the place of effective
management of the enterprise is situated. For the purposes of this paragraph the
provisions of paragraph (2) of Article 8 shall apply.
(4) All other elements of capital of a resident of one of the States shall be
taxable only in that State.
CHAPTER V
Elimination of Double Taxation
ARTICLE 25
Elimination of Double Taxation
(1) The Netherlands, when imposing tax on its residents, may include in the
basis upon which such taxes are imposed the items of income or capital which,
according to the provisions of this Agreement, may be taxed in Malta.
(2) Without prejudice to the application of the provisions concerning the
compensation of losses in the unilateral regulations for the avoidance of double
taxation, the Netherlands shall allow a deduction from the amount of tax computed
in conformity with paragraph (1) of this Article equal to such part of that tax which
bears the same proportion to the aforesaid tax, as the part of the income or capital
which is included in the basis referred to in paragraph (1) of this Article and may be
taxed in Malta according to Articles 6 and 7, paragraph (5) of Article 10, paragraph
(5) of Article 11, paragraph (3) of Article 12, paragraphs (1) and (2) of Article 14,
Article 15, paragraph (1) of Article 16, paragraph (3) of Article 19, Article 20,
paragraph (2) of Article 23, and paragraphs (1) and (2) of Article 24 of this
Agreement, bears to the total income or capital which forms the basis referred to in
paragraph (1) of this Article.
(3) Further the Netherlands shall allow a deduction from the tax computed in
accordance with the preceding paragraphs of this Article with respect to the items of
income which may be taxed in Malta according to paragraph (2) of Article 11,
paragraph (2) of Article 12, paragraph (1) of Article 17, Article 18 and paragraph (2)
of Article 19 and are included in the basis referred to in paragraph (1) of this Article.
The amount of this deduction shall be the lesser of the following amounts:
(i) the amount equal to the Malta tax;
(ii) the amount of the Netherlands tax which bears the same proportion to
the amount of tax computed in conformity with paragraph (1) of this
Article, as the amount of the said items of income bears to the amount
of income which forms the basis referred to in paragraph (1) of this
Article.
(4) Notwithstanding the provisions of paragraph (2), the Netherlands shall allow
a deduction from the tax computed in accordance with the preceding paragraphs of
this Article with respect to income which may be taxed in Malta according to Article
7, if such income is subject in Malta to a special regime as meant in Article 30.
The amount of this deduction shall be the lesser of the following amounts:
16 ġ S.L.123.10
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(i) the amount equal to the Malta tax;
(ii) the amount of the Netherlands tax which bears the same proportion to
the amount of tax computed in conformity with paragraph (1) of this
Article, as the amount of the said items of income bears to the amount
of income which forms the basis referred to in paragraph (1) of this
Article.
(5) Where, by reason of special incentive measures designed to promote
economic development in Malta, the Malta tax actually levied on interest and
royalties (other than royalties in respect of cinematographic films or tapes for
television and broadcasting) arising in Malta is lower than the tax Malta may levy
according to paragraph (2) of Article 11 and paragraph (2) of Article 12,
respectively, then the amount equal to the Malta tax referred to in sub-paragraph (i)
of paragraph (3) on such interest and royalties shall be deemed to be 10 per cent of
the gross amount thereof.
(6) Subject to the provisions of the law of Malta regarding the allowance of a
credit against Malta tax in respect of foreign tax (which shall not affect the general
principle hereof) and saving the provisions of paragraph (7), where there is included
in a Malta assessment income or capital which, in accordance with the provisions of
this Agreement, may be taxed in the Netherlands, the Netherlands tax on such
income or capital, as the case may be, shall be allowed as a credit against the relative
Malta tax payable thereon.
(7) Where a resident of one of the States derives gains which may be taxed in
the other State in accordance with paragraph (5) of Article 14, that other State shall
allow a deduction from its tax on such gains to an amount equal to the tax levied in
the first-mentioned State on the said gains.
CHAPTER VI
Special Provisions
ARTICLE 26
Non-discrimination
(1) The nationals of one of the States, whether they are residents of that State or
not, shall not be subjected in the other 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 one of the
States has in the other 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 one of the States to grant
to residents of the other 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 one of the States to a resident of the other
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. Similarly, any debts of an enterprise of one of the States to a
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 17
resident of the other State shall, for the purpose of determining the taxable capital of
such enterprise, be deductible as if they had been contracted to a resident of the first-
mentioned State.
(4) Enterprises of one of the States, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the other
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) In this Article the term "taxation" means taxes of every kind and description.
ARTICLE 27
Mutual Agreement Procedure
(1) Where a resident of one of the States considers that the actions of one or
both of the States result or will result for him in taxation not in accordance with this
Agreement, he may, notwithstanding the remedies provided by the national laws of
those States, present his case to the competent authority of the State of which he is a
resident, or, in any case referred to in paragraph (1) of Article 26, to that of the State
of which he is a national. This case must be presented within three years from the
first notification of the action giving rise to taxation not in accordance with the
Agreement.
(2) The competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at an appropriate solution, to resolve the
case by mutual agreement with the competent authority of the other State, with a
view to the avoidance of taxation not in accordance with the Agreement. Any
agreement reached shall be implemented notwithstanding any time limits in the
national laws of the States.
(3) The competent authorities of the 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 States may communicate with each other
directly for the purpose of reaching an agreement in the sense of the preceding
paragraphs.
ARTICLE 28
Exchange of Information
(1) The competent authorities of the States shall exchange such information as
is necessary for the carrying out of this Agreement or of the domestic laws of the
States concerning taxes covered by this Agreement insofar as the taxation thereunder
is not contrary to this Agreement. The exchange of information is not restricted by
Article 1. Any information received by one of the States 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 which are the
subject of the Agreement. Such persons or authorities shall use the information only
for such purposes. These persons or authorities may disclose the information in
public court proceedings or in judicial decisions.
18 ġ S.L.123.10
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS
(2) In no case shall the provisions of paragraph (1) be construed so as to impose
on one of the States the obligation -
( a ) to carry out administrative measures at variance with the laws or the
administrative practice of that or of the other State;
( b ) to supply particulars which are not obtainable under the laws or in the
normal course of the administration of that or of the other 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.
ARTICLE 29
Diplomatic and Consular Officials
Nothing in this Agreement shall affect the fiscal privileges of diplomatic or
consular officials under the general rules of international law or under the provisions
of special agreements.
ARTICLE 30
Exclusion of Certain Companies or Other Persons
(1) This Agreement is not applicable to companies or other persons which are
wholly or partly exempted from tax by a special regime under the laws of either one
of the States. It is also not applicable to income from such companies or other
persons derived by a resident of the other State, nor to shares, ''jouissance'' rights or
interests in such companies or other persons.
(2) The provisions of paragraph (1) of this Article are also applicable in case a
company or other person is treated under the administrative practice of that State in
the same or similar way as a company or person as meant in that paragraph.
(3) The competent authorities of the States shall by mutual agreement decide
which special regime is meant in the provisions of paragraph (1) of this Article.
The provisions of paragraph (1) are also applicable to any identical or
substantially similar legislation in addition to or replacing such a special regime
enacted after 1 January 1993 unless the competent authorities of the States decide
otherwise by mutual agreement.
ARTICLE 31
Regulations
(1) The competent authorities of the States shall by mutual agreement settle the
mode of application of paragraphs (2) and (3) of Article 10, of paragraphs (2) and (3)
of Article 11, and of paragraphs (1) and (2) of Article 12.
(2) The competent authorities of each of the States, in accordance with the
practices of that State, may prescribe regulations necessary to carry out the other
provisions of this Agreement.
ARTICLE 32
Territorial extension
(1) This Agreement may be extended, either in its entirety or with any necessary
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 19
modifications, to the Netherlands Antilles, or Aruba, if the country concerned
imposes taxes substantially similar in character to those to which this Agreement
applies. Any such extension shall take effect from such date and subject to such
modifications and conditions, including conditions as to termination, as may be
specified and agreed in notes to be exchanged through diplomatic channels.
(2) Unless otherwise agreed the termination of the Agreement shall not of itself
also terminate any extension of the Agreement to the Netherlands Antilles, or Aruba.
CHAPTER VII 
Final Provisions
ARTICLE 33 
Entry into Force
(1) The Governments of the States shall notify to each other that the
constitutional requirements for the entry into force of this Agreement have been
complied with.
(2) The 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 -
( a ) in respect of taxes on income derived on or after the first day of
January, 1976;
( b ) in respect of taxes on capital levied as from the first day of January,
1976.
ARTICLE 34
Termination
This Agreement shall remain in force until terminated by the Government of one
of the States. Either State may terminate the Agreement through diplomatic
channels, by giving notice of termination at least six months before the end of any
calendar year after the year 1981. In such event the Agreement shall cease to have
effect -
( a ) in respect of taxes on income derived on or after the first day of January
next following the year during which notice of termination has been
given.
( b ) in respect of taxes on capital levied as from the first day of January next
following the year during which notice of termination has been given.
IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed
this Agreement.
DONE at The Hague this 18th day of May, 1977, in duplicate, in the Netherlands
and English languages, both texts being equally authentic.
FOR THE GOVERNMENT OF THE 
REPUBLIC OF MALTA,
(sd.) G. AGIUS
FOR THE GOVERNMENT OF THE
KINGDOM OF THE 
NETHERLANDS,
(sd.) M. VAN DER STOEL
20 ġ S.L.123.10
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS
PROTOCOL
At the moment of signing the Agreement for the avoidance of double taxation and
the prevention of fiscal evasion with respect to taxes on income and on capital, this
day concluded between the Kingdom of the Netherlands and the Republic of Malta,
the undersigned have agreed that the following provisions shall form an integral part
of the Agreement.
I. AD ARTICLE 4
An individual living aboard a ship without having a permanent home in either of
the States shall be deemed to be a resident of the State in which the ship has its home
harbour.
II.  AD ARTICLES 5 AND 7
Except with regard to re-insurance, the provisions of Articles 5 and 7 of the
Agreement shall not affect the provisions of the law of either State regarding the
taxation of profits from the business of insurance
III.  AD ARTICLES 8, 14 AND 24
(1) Notwithstanding the provisions of Article 8, profits from the operation of
ships in international traffic derived by a company which is a resident of Malta, may
be taxed in the Netherlands, unless the company proves that such profits are not
relieved from Malta tax under the provisions of the Merchant Shipping Act, or under
any identical or similar provision. The foregoing sentence, however, shall not apply
if the company proves that not more than 25 per cent of its capital is owned, directly
or indirectly, by persons who are not residents of Malta.
(2) The provisions of paragraph (1) shall apply accordingly to capital gains
referred to in paragraph (3) of Article 14 and to capital referred to in paragraph (3)
of Article 24.
IV.  AD ARTICLE 10
(1) The provisions of sub-paragraph ( a ) of paragraph (2) of Article 10 shall not
apply if the relation between the two companies has been arranged or is maintained
primarily with the intention of securing this reduction.
(2) It is understood that the reference in the second sentence of paragraph (3) of
Article 10 to the provisions of the Netherlands law to the effect that the receiving
company is not charged to Netherlands company tax in respect of the profits
distributed by a Malta company, is to the application of the so called "holding
privilege" in the Netherlands Company Tax Act. Subject to the provisions of the said
Act and to future amendments thereto, this "holding privilege" leads to the result that
a company which is a resident of the Netherlands can leave out of account, in the
computation of its taxable profits, dividends it receives from a company which is a
resident of Malta, if it owns at least 5 per cent of the paid-up capital of the latter
company.
V.  AD ARTICLES 10, 11 AND 12
Applications for the repayment of tax levied contrary to the provisions of Articles
10, 11 and 12 have to be lodged with the competent authority of the State, which has
levied the tax, within a period of three years after the expiration of the calendar year
in which the tax has been levied.
DOUBLE TAXATION RELIEF ON TAXES ON INCOME 
WITH THE KINGDOM OF THE NETHERLANDS ġ S.L.123.10 21
VI. AD ARTICLES 24 AND 25
The provisions on the taxation of capital in Article 24 and the provisions with
respect to the elimination of double taxation with respect to capital in paragraph (2)
of Article 25 of the Agreement will not apply as long as Malta does not levy a tax on
capital.
VII.  AD ARTICLE 25
It is understood that, insofar as the Netherlands income tax or company tax is
concerned, the basis referred to in paragraph (1) of Article 25 is the "onzuivere
inkomen" or "winst" in terms of the Netherlands Income Tax Law or Company Tax
Law, respectively.
VIII. AD ARTICLE 25
Notwithstanding Article 34 of the Agreement the provision of paragraph (5) of
Article 25 shall cease to have effect after the last day of December, 1997, unless the
competent authorities decide otherwise in mutual agreement.
IX. AD ARTICLES 28 AND 30
(1) It is understood that provisions on confidentiality in a special regime as
meant in Article 30 or such provisions in any identical or substantially similar
enactment in addition to or replacing this special regime, shall not impose any
restrictions on the exchange of information as meant in Article 28 of the Agreement
in those cases where the Maltese competent authority and the relative authority
vested with the administration of such special regime agree that sufficient evidence
exists to warrant criminal proceedings.
(2) It is also understood that provisions in legislation enacted after 1 January,
1994 on confidentiality, identical to or replacing provisions on confidentiality in the
special regime as meant in Article 30 of the Agreement, shall not impose any
restrictions on the exchange of information as meant in Article 28 of the Agreement
in case of suspicion of tax avoidance or tax evasion.
IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed
this Protocol.
DONE at The Hague this 18th day of May, 1977, in duplicate, in the Netherlands
and English languages, both texts being equally authentic.
FOR THE GOVERNMENT OF THE 
REPUBLIC OF MALTA,
(SD.) G. AGIUS
FOR THE GOVERNMENT OF THE
KINGDOM OF THE 
NETHERLANDS,
(SD.) M. VAN DER STOEL
