DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE KINGDOM OF SWEDEN ġ S.L.123.38 1
SUBSIDIARY LEGISLATION 123.38
DOUBLE TAXATION RELIEF ON TAXES ON 
INCOME WITH THE KINGDOM OF SWEDEN 
ORDER
3rd February, 1996
LEGAL NOTICE 104 of 1996. 
Title.
on Income with the Kingdom of Sweden Order.
Arrangement 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 the Kingdom of Sweden with a
view to affording relief from double taxation in
relation to the following taxes imposed by the laws of
the the Kingdom of Sweden:
(i) the national income tax, including the tax on
employees at sea and the withholding tax on
dividends;
(ii) the income tax on non-residents;
(iii) the income tax on non-resident artistes and
athletes; and
(iv) the municipal income tax;
( b ) that it is expedient that those arrangements should
have effect.
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SCHEDULE
CONVENTION 
BETWEEN MALTA
AND SWEDEN
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of Malta and the Government of Sweden, 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 taxes to which this Convention shall apply are:
( a ) in Malta:
the income tax
(hereinafter referred to as "Malta tax");
( b ) in Sweden:
(i) the national income tax (den statliga inkomstskatten), including
the tax on employees at sea (sjomansskatten) and the withholding
tax on dividends (kupongskatten);
(ii) the income tax on non-residents (den sarskilda inkomstskatten for
utomlands bosatta);
(iii) the income tax on non-resident artistes and athletes (den sarskilda
inkomstskatten for utomlands bosatta artister m.fl.); and
(iv) the municipal income tax (den kommunala inkomstskatten) 
(hereinafter referred to as "Swedish tax").
2. The 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 taxes referred to in paragraph 1. The competent authorities of the
Contracting States shall notify each other of any substantial changes which have
been made in their respective taxation laws.
3. Notwithstanding the other provisions of this Article, the Convention shall
not apply to tax paid or payable in Malta in accordance with the provisions of sub-
article (13) of article 56 of the Income Tax Act, concerning the chargeable income of
any person engaged in the production of petroleum produced in Malta, or any
substantially similar provision which is imposed after the date of signature of this
Convention.
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WITH THE KINGDOM OF SWEDEN ġ S.L.123.38 3
ARTICLE 3
General Definitions
1. For the purposes of this Convention, unless the context otherwise requires: 
( a ) the term "Malta" means the Republic of Malta and, when used in a
geographical sense, means the Island of Malta, the Island of Gozo and the other
islands of the Maltese archipelago including the territorial waters thereof, and any
area outside the territorial waters of Malta which has been or may hereafter be
designated, in accordance with international law and under the law of Malta
concerning the continental shelf, as an area within which the rights of Malta with
respect to the seabed and subsoil and their natural resources may be exercised;
( b ) the term "Sweden" means the Kingdom of Sweden and, when used in a
geographical sense, includes the national territory, the territorial sea of Sweden as
well as other maritime areas over which Sweden in accordance with international
law exercises sovereign rights or jurisdiction;
( c ) the terms "a Contracting State" and "the other Contracting State" mean
Malta or Sweden, as the context requires;
( d ) the term "person" includes an individual, a company and any other body of
persons;
( e ) the term "company" means any body corporate or any entity which is treated
as a body corporate for tax purposes;
( f ) the terms "enterprise of a Contracting State" and "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;
( g ) the term "international traffic" means any transport by a ship or aircraft
operated by an enterprise of a Contracting State, except when the ship or aircraft is
operated solely between places in the other Contracting State;
( h ) the term "national" means:
(i) any individual possessing the nationality of a Contracting State;
(ii) any legal person, partnership or association deriving its status as such
from the laws in force in a Contracting State;
( i ) the term "competent authority" means:
(i) in Malta, the Minister responsible for finance or his authorised
representative;
(ii) in Sweden, the Minister of Finance, his authorised representative or the
authority which is designated as a competent authority for the purposes
of this Convention.
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
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State" means any person who, under the laws of that State, is liable to tax therein by
reason of his domicile, residence, place of management or any other criterion of a
similar nature. But this term does not include any person who is liable to tax in that
State in respect only of income from sources in that State.
2. Where by reason of the provisions of paragraph 1 an individual is a resident
of both Contracting States, then his status shall be determined as follows:
( a ) he shall be deemed to be a resident of the State in which he has a
permanent home available to him; if he has a permanent home available
to him in both States, he shall be deemed to be a resident of the State
with which his personal and economic relations are closer (centre of
vital interests);
( b ) if the State in which he has his centre of vital interests cannot be
determined, or if he has not a permanent home available to him in either
State, he shall be deemed to be a resident of the State in which he has an
habitual abode;
( c ) if he has an habitual abode in both States or in neither of them, he shall
be deemed to be a resident of the State of which he is a national;
( d ) if he is a national of both States or of neither of them, the competent
authorities of the Contracting States shall settle the question by mutual
agreement.
3. Where by reason of the provisions of paragraph 1 a person other than an
individual is a resident of both Contracting States, then it shall be deemed to be a
resident of the State in which its place of effective management is situated.
ARTICLE 5
Permanent Establishment
1. For the purposes of this 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 a construction, assembly or installation project or
supervisory activities in connection therewith constitutes a permanent establishment
only if such site, project or activities continue for a period of more than six months.
4. Notwithstanding the preceding provisions of this Article, the furnishing of
services, including consultancy services, by an enterprise through employees or
other personnel engaged by the enterprise for such purpose shall be considered to
constitute a permanent establishment where activities of that nature continue (for the
same or a connected project) within a Contracting State for a period or periods
aggregating more than six months within any twelve-month period.
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5. Notwithstanding the preceding provisions of this Article, the term
"permanent establishment" shall be deemed not to include:
( a ) the use of facilities solely for the purpose of storage, display or delivery
of goods or merchandise belonging to the enterprise;
( b ) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;
( c ) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;
( d ) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise or of collecting information, for the
enterprise;
( e ) the maintenance of a fixed place of business solely for the purpose of
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.
6. Notwithstanding the provisions of paragraphs 1 and 2, where a person -
other than an agent of an 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 5 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 of a Contracting State shall not be deemed to have a
permanent establishment in the other Contracting State merely because it carries on
business in that other State through a broker, general commission agent or any other
agent of an independent status, provided that such persons are acting in the ordinary
course of their business. However, when the activities of such an agent are devoted
wholly or almost wholly on behalf of that enterprise, he will not be considered to be
an agent of an independent status within the meaning of this paragraph.
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, rights to which the provisions of general law
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respecting landed property apply, buildings, 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, 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.
4.  The provisions of paragraphs 1 and 3 shall also apply to the income from
immovable property of an enterprise and to income from immovable property used
for the performance of independent personal services.
ARTICLE 7
Business Profits
1. The profits of an enterprise of a Contracting State shall be taxable only in
that State unless the enterprise carries on business in the other Contracting State
through a permanent establishment situated therein. If the enterprise carries on
business as aforesaid, the profits of the enterprise may be taxed in the other State but
only so much of them as is attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a
Contracting State carries on business in the other Contracting State through a
permanent establishment situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it might be expected to
make if it were a distinct and separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing wholly independently
with the enterprise of which it is a permanent establishment.
3. In the determination of the profits of a permanent establishment, there shall
be allowed as deductions expenses which are incurred for the purposes of the
business 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.
8. The provisions of this Article shall not affect the provisions of the law of a
Contracting State regarding the taxation of profits from the business of insurance.
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ARTICLE 8
Shipping and Air Transport
1. Profits of an enterprise of a Contracting State from the operation of ships or
aircraft in international traffic shall be taxable only in that State.
2. With respect to profits derived by the air transport consortium Scandinavian
Airlines System (SAS) the provisions of paragraph 1 shall apply only to such part of
the profits as corresponds to the participation held in that consortium by AB
Aerotransport (ABA), the Swedish partner of Scandinavian Airlines System (SAS).
3. The provisions of paragraph 1 shall also apply to profits from the
participation in a pool, a joint business or an international operating agency.
ARTICLE 9
Associated Enterprises
1. Where - 
( a ) an enterprise of a Contracting State participates directly or indirectly in
the management, control or capital of an enterprise of the other
Contracting State, or
( b ) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of a Contracting State and an
enterprise of the other Contracting State,
and in either case conditions are made or imposed between the two enterprises in
their commercial or financial relations which differ from those which would be made
between independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of those conditions,
have not so accrued, may be included in the profits of that enterprise and taxed
accordingly.
2. Where a Contracting State includes in the profits of an enterprise of that
State - and taxes accordingly - profits on which an enterprise of the other
Contracting State has been charged to tax in that other State and the profits so
included are profits which would have accrued to the enterprise of the first-
mentioned State if the conditions made between the two enterprises had been those
which would have been made between independent enterprises, then that other State
shall make an appropriate adjustment to the amount of the tax charged therein on
those profits. In determining such adjustment, due regard shall be had to the other
provisions of this 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:
( a ) Where the dividends are paid by a company which is a resident of
Sweden to a resident of Malta who is the beneficial owner thereof, the
Swedish tax so charged shall not exceed 15 per cent of the gross amount
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of the dividends. However, if the beneficial owner is a company which
holds at least 10 per cent of the voting power of the company paying the
dividends, the dividends shall be exempt from tax in Sweden.
( b ) (i) Where the dividends are paid by a company which is a resident of
Malta to a resident of Sweden 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.
(ii) Notwithstanding the provisions of sub-paragraph (i) hereof, Malta
tax shall not exceed 15 per cent of the dividends if such dividends
are paid out of gains or profits earned in any year in respect of
which the company is in receipt of any tax benefit under the
provisions regulating aids to industries in Malta, and the
shareholder submits returns and accounts to the taxation
authorities of Malta in respect of his income liable to Malta tax
for the relative year of assessment.
The provisions of sub-paragraph ( b )(ii) of this paragraph shall apply for
the first ten years during which this Convention is effective. This period
may be extended by a mutual agreement between the competent
authorities.
This paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid.
3.  The term "dividends" as used in this Article means income from shares or
other rights, not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company making the distribution is
a resident.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner
of the dividends, being a resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the holding in
respect of which the dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or Article 14, as
the case may be, shall apply.
5. Where a company which is a resident of a Contracting State derives profits
or income from the other Contracting State, that other State may not impose any tax
on the dividends paid by the company, except insofar as such dividends are paid to a
resident of that other State or insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or a fixed base
situated in that other State, nor subject the company’s undistributed profits to a tax
on the company’s undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income arising in such
other State.
ARTICLE 11
Interest
1. Interest arising in a Contracting State and paid to a resident of the other
Contracting State shall be taxable only in that other State, if such resident is the
beneficial owner of the interest.
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2. The term "interest" as used in this Article means income from debt-claims of
every kind, whether or not secured by mortgage and whether or not carrying a right
to participate in the debtor’s profits, and in particular, income from government
securities and income from bonds or debentures, including premiums and prizes
attaching to such securities, bonds or debentures. Penalty charges for late payment
shall not be regarded as interest for the purpose of this Article.
3. The provisions of paragraph 1 shall not apply if the beneficial owner of the
interest, being a resident of a Contracting State, carries on business in the other
Contracting State in which the interest arises, through a permanent establishment
situated therein, or performs in that other State independent personal services from a
fixed base situated therein, and the debt-claim in respect of which the interest is paid
is effectively connected with such permanent establishment or fixed base. In such
case the provisions of Article 7 or Article 14, as the case may be, shall apply.
4. Where, by reason of a special relationship between the payer and the
beneficial owner or between both of them and some other person, the amount of the
interest, having regard to the debt-claim for which it is paid, exceeds the amount
which would have been agreed upon by the payer and the beneficial owner in the
absence of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments shall remain
taxable according to the laws of each Contracting State, due regard being had to the
other provisions of this 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 and films or tapes
for radio or television broadcasting, any patent, trade mark, design or model, plan,
secret formula or process, 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. 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.
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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 the other State.
4. Income or gains derived by a resident of a Contracting State from the
alienation of ships or aircraft operated in international traffic or movable property
pertaining to the operation of such ships or aircraft, shall be taxable only in that
State.
With respect to income or gains derived by the air transport consortium
Scandinavian Airlines System (SAS), the provisions of this paragraph shall apply
only to such portion of the income or gains as corresponds to the participation held
in that consortium by AB Aerotransport (ABA), the Swedish partner of Scandinavian
Airlines System (SAS).
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 that case, only so
much of the income as is attributable to that fixed base may be taxed in
that other Contracting State; or
( b ) if his stay in the other Contracting State is for a period or periods
amounting to or exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the fiscal year concerned; in
that case, only so much of the income as is derived from the activity
exercised in the other Contracting State may be taxed in that other State;
or
( c ) if the remuneration for his activities in the other Contracting State is
paid by a resident of that Contracting State or is borne by a permanent
establishment or fixed base situated in that Contracting State and
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exceeds in the fiscal year the equivalent of 25,000 United States dollars.
2. The term "professional services" includes especially independent scientific
literary, artistic, educational or teaching activities as well as the independent
activities of physicians, lawyers, engineers, architects, dentists and accountants.
ARTICLE 15
Dependent Personal Services
1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other
similar remuneration derived by a resident of a Contracting State in respect of an
employment shall be taxable only in that State unless the employment is exercised in
the other Contracting State. If the employment is so exercised, such remuneration as
is derived therefrom may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a
resident of a Contracting State in respect of an employment exercised in the other
Contracting State shall be taxable only in the first-mentioned State if:
( a ) the recipient is present in the other State for a period or periods not
exceeding in the aggregate 183 days in any twelve-month period
commencing or ending in the fiscal year concerned; and
( b ) the remuneration is paid by, or on behalf of, an employer who is not a
resident of the other State; and
( c ) the remuneration is not borne by a permanent establishment or a fixed
base which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration
derived in respect of an employment exercised aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting State may be taxed in that
State. Where a resident of Sweden derives remuneration in respect of an employment
exercised aboard an aircraft operated in international traffic by the air transport
consortium Scandinavian Airlines System (SAS), such remuneration shall be taxable
only in Sweden.
ARTICLE 16
Directors’ Fees
Directors’ fees and other similar payments derived by a resident of a Contracting
State in his capacity as a member of the board of directors of a company which is a
resident of the other Contracting State may be taxed in that other State.
ARTICLE 17
Entertainers and Sportsmen
1. Notwithstanding the provisions of Articles 14 and 15, income derived by a
resident of a Contracting State as an entertainer, such as a theatre, motion picture,
radio or television artiste, or a musician, or as a sportsman, from his personal
activities as such exercised in the other Contracting State, may be taxed in that other
State.
2. Where income in respect of personal activities exercised by an entertainer or
a sportsman in his capacity as such accrues not to the entertainer or sportsman
himself but to another person, that income may, notwithstanding the provisions of
Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the
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entertainer or sportsman are exercised.
ARTICLE 18
Pensions and Social Security Payments
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 paid and other
payments made under the social security legislation of a Contracting State shall be
taxable only in that State.
ARTICLE 19
Government Service
1. ( a )  Remuneration, other than a pension, paid by a Contracting State or a
political subdivision or a local authority thereof to an individual in respect of
services rendered to that State or subdivision or authority shall be taxable only in
that State.
( b ) However, such remuneration shall be taxable only in the other Contracting
State if the services are rendered in that other State and the individual is a resident of
that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for the purpose of rendering
the services.
2. ( a ) Any pension paid by, or out of funds created by, a Contracting State or a
political subdivision or a local authority thereof to an individual in respect of
services rendered to that State or subdivision or authority shall be taxable only in
that State.
( b ) However, such pension shall be taxable only in the other Contracting State if
the individual is a resident of, and a national of, that State.
3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and
pensions in respect of services rendered in connection with a business carried on by
a Contracting State or a political subdivision or a local authority thereof.
ARTICLE 20
Students and Business Apprentices
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
Other Income
1. Items of income of a resident of a Contracting State, wherever arising, not
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WITH THE KINGDOM OF SWEDEN ġ S.L.123.38 13
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 22
Elimination of Double Taxation
1. In the case of Malta, double taxation shall be avoided 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 Sweden, the Swedish tax on such income shall be allowed as a credit against
the relative Malta tax payable thereon.
2. In the case of Sweden, double taxation shall be avoided as follows:
( a ) Where a resident of Sweden derives income which under the laws of
Malta and in accordance with the provisions of this Convention may be
taxed in Malta, Sweden shall allow - subject to the provisions of the
laws of Sweden concerning credit for foreign tax (as it may be amended
from time to time without changing the general principle hereof) - as a
deduction from the tax on such income, an amount equal to the Malta
tax paid in respect of such income.
( b ) Where a resident of Sweden derives income which, in accordance with
the provisions of this Convention, shall be taxable only in Malta,
Sweden may, when determining the graduated rate of Swedish tax, take
into account the income which shall be taxable only in Malta.
( c ) Notwithstanding the provisions of sub-paragraph ( a ) of this paragraph,
dividends paid by a company which is a resident of Malta to a company
which is a resident of Sweden shall be exempt from Swedish tax
according to the provisions of Swedish law governing the exemption of
tax on dividends paid to Swedish companies by subsidiaries abroad.
( d ) For the purposes of sub-paragraph ( a ) of this paragraph the term "Malta
tax paid" shall be deemed to include the Malta tax which would have
been paid but for any time-limited exemption or reduction of tax
granted under incentive provisions contained in the Malta law designed
to promote economic development to the extent that such exemption or
reduction is granted for profits from industrial or manufacturing
activities or from agriculture, fishing or tourism (including restaurants
and hotels) provided that the activities have been carried out within
Malta. For the purposes of sub-paragraph ( c ) of this paragraph a tax of
15 per cent calculated on a Swedish tax base shall be considered to have
been paid for such activities under those conditions mentioned in the
previous sentence.
The competent authorities may agree to extend the application of this
provision also to other activities.
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DOUBLE TAXATION RELIEF ON TAXES ON INCOME
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( e ) The provisions of sub-paragraph ( d ) of this paragraph shall apply for the
first ten years during which this convention is effective. This period
may be extended by a mutual agreement between the competent
authorities.
3. Where the Convention provides that income (including capital gains) 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 such portion of the income as remitted
to or received in the other State.
ARTICLE 23
Non-Discrimination
1. Nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected therewith, which is
other or more burdensome than the taxation and connected requirements to which
nationals of that other State in the same circumstances 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 4 of
Article 11, or paragraph 4 of Article 12 apply, interest, royalties and other
disbursements paid by an enterprise of a Contracting State to a resident of the other
Contracting State shall, for the purpose of determining the taxable profits of such
enterprise, be deductible under the same conditions as if they had been paid to a
resident of the first-mentioned State.
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 apply to the taxes which are the subject
of this Convention.
ARTICLE 24
Mutual Agreement Procedure
1. Where a person considers that the actions of one or both of the Contracting
States result or will result for him in taxation not in accordance with the provisions
of this 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 23,
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WITH THE KINGDOM OF SWEDEN ġ S.L.123.38 15
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 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 25
Exchange of Information
1. The competent authorities of the Contracting States shall exchange such
information as is necessary for carrying out the provisions of this 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;
( c ) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or
information, the disclosure of which would be contrary to public policy
( ordre public ).
ARTICLE 26
Limitation of Relief
The provisions of this Convention shall not apply to persons entitled to any
special tax benefit under:
( a ) a law of either one of the Contracting States which has been identified
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DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH THE KINGDOM OF SWEDEN
in an Exchange of Notes between the Contracting States; or
( b ) any substantially similar law subsequently enacted.
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.  The Contracting States shall notify each other that the constitutional
requirements for the entry into force of this Convention have been complied with.
2. This Convention 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 Sweden, on income derived on or after the first day of January
immediately following the date on which the Convention enters into
force; and
( b ) in Malta, on income derived during any calendar year or accounting
period, as the case may be, beginning on or after the first day of January
immediately following the date on which the Convention enters into
force.
3. Upon the coming into effect of this Convention, the Agreement and
accompanying Protocol between Malta and Sweden for the avoidance of double
taxation with respect to taxes on income, signed at Stockholm on May 30, 1975, as
modified by a Protocol signed at Valletta on June 25, 1986, shall terminate. The
provisions of the 1975 Agreement, as modified, shall cease to have effect from the
date on which the corresponding provisions of this Convention shall, for the first
time, have effect according to the provisions of paragraph 2 of this Article. With
regard to the provisions of Articles 5 and 14 of the 1975 Agreement, where any
greater relief from tax would have been offered by the application of those
provisions, any such provision as aforesaid shall continue to have effect:
( a ) in Sweden, on income derived on or before the last day of the second
calendar year next following that in which this Convention came into
effect; and
( b ) in Malta, on income derived on or before the last day of the second
calendar year or accounting period, as the case may be, next following
the calendar year in which this Convention came into effect.
ARTICLE 29
Termination
This Convention shall remain in force until terminated by a Contracting State.
Either Contracting State may terminate the Convention, through diplomatic
channels, by giving notice of termination at least six months before the end of any
calendar year beginning after the expiration of a period of five years from the date of
its entry into force. In such event, the Convention shall cease to have effect:
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WITH THE KINGDOM OF SWEDEN ġ S.L.123.38 17
( a ) in Sweden, on income derived on or after the first day of January of the
calendar year next following the date on which the notice is given; and
( b ) in Malta, on income derived during any calendar year or accounting
period, as the case may be, beginning on or after the first day of January
immediately following the date on which the notice is given.
IN WITNESS WHEREOF the undersigned being duly authorised thereto have
signed this Convention.
DONE at Washington D.C. this 9th day of October, 1995, in duplicate in the
English language.
PROTOCOL
At the signing of the Convention between Sweden and Malta 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 shall form an integral part of the
Convention:
Notwithstanding the provisions of paragraph 5 of Article 13, gains from the
alienation of shares or other corporate rights derived by an individual who has been
resident of a Contracting State and who has become a resident of the other
Contracting State, may be taxed in the first-mentioned State if the alienation of the
shares or other corporate rights occur at any time during the five years next
following the date on which the individual has ceased to be a resident of the first
mentioned State.
In witness whereof the undersigned being duly authorised thereto have signed this
Protocol.
Done at Washington, this 9th day of October 1995, in duplicate in the English
language.
JOHN DALLI 
FOR THE GOVERNMENT OF 
MALTA 
GÖRAN PERSSON
FOR THE GOVERNMENT OF 
SWEDEN
JOHN DALLI 
FOR THE GOVERNMENT OF 
MALTA 
GÖRAN PERSSON
FOR THE GOVERNMENT OF 
SWEDEN
