DOUBLE TAXATION RELIEF ON TAXES ON INCOME
WITH AUSTRALIA ġ S.L.123.15 1
SUBSIDIARY LEGISLATION 123.15
DOUBLE TAXATION RELIEF ON TAXES ON 
INCOME WITH AUSTRALIA ORDER 
5th November, 1985
LEGAL NOTICE 41 of 1985.
Title.
on Income with Australia 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 Australia with a view to affording
relief from double taxation in relation to the following
taxes imposed by the laws of Australia:
the Australian income tax, including the additional tax
upon the undistributed amount of the distributable
income of a private company;
( b ) that it is expedient that those arrangements should
have effect.
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SCHEDULE
AGREEMENT BETWEEN
MALTA AND AUSTRALIA FOR THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION WITH RESPECT
TO TAXES ON INCOME
Malta and Australia desiring to conclude an Agreement for the avoidance of
double taxation and the prevention of fiscal evasion with respect to taxes on income,
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 at the
Contracting States.
ARTICLE 2
Taxes Covered
(1) The existing taxes to which this Agreement shall apply are:
( a ) in Australia:
the Australian income tax, including the additional tax upon the
undistributed amount of the distributable income of a private company;
( b ) in Malta:
the income tax, including prepayments of tax whether made by
deduction at source or otherwise.
(2) This Agreement shall also apply to any identical or substantially similar
taxes which are imposed by either Contracting State after the date of signature of
this Agreement in addition to, or in place of, the existing taxes. As soon as possible
after the end of each calendar year, the competent authority of each Contracting
State shall notify the competent authority of the other Contracting State of any
substantial changes which have been made in the laws of his State relating to the
taxes to which this Agreement applies.
CHAPTER II
Definitions
ARTICLE 3
General Definitions
(1) In this Agreement, unless the context otherwise requires:
( a ) the term "Australia" means the Commonwealth of Australia and, when used
in a geographical sense, includes:
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(i) the Territory of Norfolk Island; 
(ii) the Territory of Christmas Island;
(iii) the Territory of Cocos (Keeling) Islands;
(iv) the Territory of Ashmore and Cartier Islands; 
(v) the Coral Sea Islands Territory; and
(vi) any area adjacent to the territorial limits of Australia or of the said
Territories in respect of which there is for the time being in force
consistently with international law, a law of Australia or of a State or
part of Australia or of a Territory aforesaid dealing with the exploitation
of any of the natural resources of the sea-bed and subsoil of the
continental shelf:
( b ) the term "Malta" means the Republic of Malta and when used in a
geographical sense, means the Island of Malta, the Island of Gozo and the other
islands of the Maltese archipelago, including the territorial waters thereof and any
area outside the territorial sea of Malta which in accordance with international law,
has been or may hereafter be designated under the law of Malta concerning the
continental shelf, as an area within the rights of Malta with respect to the sea-bed
and subsoil and their natural resources may be exercised;
( c ) the terms "Contracting State", "one of the Contracting States" and "other
Contracting State" mean Australia or Malta, 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 company or body corporate for tax purposes;
( f ) the terms "enterprise of one of the Contracting States" and "enterprise of the
other Contracting State" mean an enterprise carried on by a resident of Australia or
an enterprise carried on by a resident of Malta, as the context requires;
( g ) the term "international traffic" means any transport by a ship or aircraft
except where the ship or aircraft is operated solely between places within a
Contracting State;
( h ) the term "tax" means Australian tax or Malta tax, as the context requires;
( i ) the term "Australian tax" means tax imposed by Australia, being tax to
which this Agreement applies by virtue of Article 2;
( j ) the term "Malta tax" means tax imposed by Malta, being tax to which this
Agreement applies by virtue of Article 2;
( k ) the term "competent authority" means, in the case of Australia, the
Commissioner of Taxation or his authorised representative, and in the case of Malta,
the Minister responsible for finance or his authorised representative.
(2) In this Agreement, the terms "Australian tax" and "Malta tax" do not include
any penalty or interest imposed under the law of either Contracting State relating to
the taxes to which this Agreement applies by virtue of Article 2.
(3) In the application of this Agreement by a Contracting State, any term not
defined in this Agreement shall, unless the context otherwise requires, have the
meaning which it has under the laws of that State relating to the taxes to which this
Agreement applies.
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ARTICLE 4
Residence
(1) For the purposes of this Agreement, a person is a resident of one of the
Contracting States:
( a ) in the case of Australia, subject to the provisions of paragraph (2), if the
person is a resident of Australia for the purposes of Australian tax; and
( b ) in the case of Malta, if the person is liable to tax therein by reason of his
domicile, residence, place of management or any other criterion of a
similar nature. A person is not a resident of Malta if he is liable to tax in
Malta in respect only of income from sources therein.
(2) In relation to income from sources in Malta, a person who is subject to
Australian tax on income which is from sources in Australia shall not be treated as a
resident of Australia unless the income from sources in Malta is subject to Australian
tax or, if that income is exempt from Australian tax, it is so exempt solely because it
is subject to Malta tax.
(3) Where by reason of the preceding provisions of this Article an individual is
a resident of both Contracting States, then his status shall be determined in
accordance with the following rules:
( a ) he shall be deemed to be a resident solely of the Contracting State in
which he has a permanent home available to him;
( b ) if he has a permanent home available to him in both Contracting States,
or if he does not have a permanent home available to him in either of
them, he shall be deemed to be a resident solely of the Contracting State
with which his personal and economic relations are the closer.
(4) In determining for the purposes of paragraph (3) the Contracting State with
which an individual’s personal and economic relations are the closer, the matters to
which regard may be had shall include the citizenship of the individual.
(5) Where by reason of the provisions of paragraph (1), a person other than an
individual is a resident of both Contracting States, then it shall be deemed to be a
resident solely of the Contracting State in which its place of effective management is
situated.
ARTICLE 5
Permanent Establishment
(1) For the purposes of this Agreement, the term "permanent establishment", in
relation to an enterprise, means a fixed place of business through which the business
of the enterprise is wholly or partly carried on.
(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, an oil or gas well, a quarry or any other place of extraction of
natural resources;
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( g ) an agricultural, pastoral or forestry property;
( h ) a building site or construction, installation or assembly project which
exists for more than 183 days in any twelve-month period.
(3) An enterprise shall not be deemed to have a permanent establishment merely
by reason of -
( 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 at
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
activities which have a preparatory or auxiliary character for the
enterprise, such as advertising or scientific research.
(4) An enterprise shall be deemed to have a permanent establishment in one of
the Contracting States and to carry on business through that permanent establishment
if -
( a ) it carries on supervisory activities in that State for more than 183 days
in any twelve-month period in connection with a building site, or a
construction, installation or assembly project which is being undertaken
in that State;
( b ) there is being used in that State by, for or under contract with the
enterprise substantial equipment including, but not limited to, an
installation, drilling rig or ship used for, or in activities connected with,
the exploration for or exploitation of natural resources; or
( c ) it carries on supervisory activities in that State in connection with the
use of equipment referred to in sub-paragraph ( b ).
(5) A person acting in one of the Contracting States on behalf of an enterprise of
the other Contracting State - other than an agent of an independent status to whom
paragraph (6) applies - shall be deemed to be a permanent establishment of that
enterprise in the first-mentioned State -
( a ) in respect of his activities in that behalf, if he has, and habitually
exercises in that State, an authority to conclude contracts on behalf of
the enterprise, unless his activities are limited to those mentioned in
paragraph (3) and are such that, if exercised through a fixed place of
business, would not make that fixed place of business a permanent
establishment under the provisions of that paragraph; or
( b ) if, in so acting, he manufactures or processes in that State for the
enterprise goods or merchandise belonging to the enterprise.
(6) An enterprise of one of the Contracting States shall not be deemed to have a
permanent establishment in the other Contracting State merely because it carries on
business in that other State through a broker, general commission agent or any other
agent of an independent status, where that person is acting in the ordinary course of
his business as such a broker or agent.
(7) The fact that a company which is a resident of one of the Contracting States
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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 make either company a permanent
establishment of the other.
(8) The principles set forth in the preceding paragraphs of this Article shall be
applied in determining for the purposes of this Agreement whether there is a
permanent establishment outside both Contracting States; and whether an enterprise,
not being an enterprise of one of the Contracting States, has a permanent
establishment in one of the Contracting States.
CHAPTER III
Taxation of Income
ARTICLE 6
Income from Real Property
(1) Income from real property may be taxed in the Contracting State in which
the real property is situated.
(2) In this Article the term "real property" -
( a ) in the case of Australia, has the meaning which it has under the laws of
Australia, and shall also include -
(i) a lease of land and any other interest in or over land, whether
improved or not; and
(ii) a right to receive variable or fixed payments as consideration for
the working of, or the right to work or to explore for, mineral
deposits, oil or gas wells, quarries or other places of extraction or
exploitation of natural resources; and
( b ) in the case of Malta, means immovable property according to the laws
of Malta, and shall also include:
(i) property accessory to immovable property;
(ii) rights to which the provisions of the general law respecting
landed property apply;
(iii) usufruct of immovable property; and
(iv) rights to variable or fixed payments in respect of the operation of
mines or quarries or of the exploitation of or exploration for any
natural resources.
Ships, boats and aircraft shall not be regarded as real property.
(3) A lease of land, any other interest in or over land and any right referred to in
any of the sub-paragraphs of paragraph (2) shall be regarded as situated where the
land, mineral deposits, oil or gas wells, quarries or natural resources, as the case may
be, are situated or the exploration may take place.
(4) The provisions of paragraph (1) shall apply to income derived from the
direct use, letting or use in any other form of real property.
(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the income
from real property of an enterprise and to income from real property used for the
performance of professional services.
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ARTICLE 7
Business Profits
(1) The profits of an enterprise of one of the Contracting States 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 one of the
Contracting States carries on business in the other Contracting State through a
permanent establishment situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it might be expected to
make if it were a distinct and separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing wholly independently
with the enterprise of which it is a permanent establishment or with other enterprises
with which it deals.
(3) In the determination of the profits of a permanent establishment, there shall
be allowed as deductions expenses of the enterprise, being expenses which are
incurred for the purposes of the permanent establishment (including executive and
general administrative expenses so incurred) and which would be deductible if the
permanent establishment were an independent entry which paid those expenses,
whether incurred in the Contracting State in which the permanent establishment is
situated or elsewhere.
(4) 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.
(5) Nothing in this Article shall affect the application of any law of a
Contracting State relating to the determination of the tax liability of a person,
including the determination of such liability by the exercise of a discretion or the
making of an estimate by the competent authority of that State in cases in which,
from the information available to the competent authority of that State, it is not
possible or not practicable to ascertain the profits to be attributed to a permanent
establishment, provided that that law shall be applied, so far as the information
available to the competent authority permits, consistently with the principles of this
Article.
(6) For the purposes of the preceding paragraphs of this Article, the profits to be
attributed to the permanent establishment shall be determined by the same method
year by year unless there is good and sufficient reason to the contrary.
(7) Where profits include items of income which are dealt with separately in
other Articles of this Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article.
(8) Nothing in this Article shall affect the operation of any law of a Contracting
State relating to taxation of profits from insurance with non-residents provided that
if the relevant law in force in either Contracting State at the date of signature of this
Agreement is varied (otherwise than in minor respects so as not to affect its general
character) the Contracting States shall consult with each other with a view to
agreeing to any amendment of this paragraph that may be appropriate.
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ARTICLE 8
Shipping and Air Transport
(1) Profits from the operation of ships or aircraft derived by a resident of one of
the Contracting States shall be taxable only in that State.
(2) Notwithstanding the provisions of paragraph (1), such profits may be taxed
in the other Contracting State where they are profits from operations of ships or
aircraft confined solely to places in that other State.
(3) The provisions of paragraphs (1) and (2) shall apply in relation to the share
of the profits from the operation of ships or aircraft derived by a resident of one of
the Contracting States through participation in a pool service, in a joint transport
operating organization or in an international operating agency.
(4) For the purposes of this Article, profits derived from the carriage by ships or
aircraft of passengers, livestock, mail, foods or merchandise shipped in a
Contracting State for discharge at another place in that State shall be treated as
profits from operations of ships or aircraft confined solely to places in that State.
(5) Notwithstanding the provisions of this Article, profits from the operation of
ships in international traffic derived by a company which is a resident of Malta may
be taxed in Australia 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 provisions. 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.
ARTICLE 9
Associated Enterprises
(1) Where -
( a ) an enterprise of one of the Contracting States 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 one of the Contracting States and
an enterprise of the other Contracting State,
and in either case conditions operate between the two enterprises in their commercial
or financial relations which differ from those which might be expected to operate
between independent enterprises dealing wholly independently with one another,
then any profits which, but for those conditions, might have been expected to accrue
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) Nothing in this Article shall affect the application of any law of a
Contracting State relating to the determination of the tax liability of a person,
including the determination of such liability by the exercise of a discretion or the
making of an estimate by the competent authority of that State in cases in which,
from the information available to the competent authority of that State, it is not
possible or not practicable to determine the income to be attributed to an enterprise,
provided that that law shall be applied, so far as the information available to the
competent authority permits, consistently with the principles of this Article.
(3) Where profits on which an enterprise of one of the Contracting States has
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been charged to tax in that State are also included, by virtue of paragraph (1) or (2),
in the profits of an enterprise of the other Contracting State and taxed accordingly,
and the profits so included are profits which might have been expected to have
accrued to that enterprise of the other State if the conditions operative between the
enterprises had been those which might have been expected to have operated
between independent enterprises dealing wholly independently with one another,
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 Contracting States shall if necessary consult each other.
ARTICLE 10
Dividends
(1) Dividends paid by a company which is a resident of one of the Contracting
States for the purposes of its tax, being dividends to which a resident of the other
Contracting State is beneficially entitled, may be taxed in that State.
(2) Such dividends may be taxed in the Contracting State of which the company
paying the dividends is a resident for the purposes of its tax, and according to the
law of that State, but -
( a ) in the case of tax charged by Australia:
that tax shall not exceed 15 per cent of the gross amount of the
dividends;
( b ) in the case of tax charged by Malta:
(i) such tax on the gross amount of the dividends shall not exceed
that chargeable on the profits out of which the dividends are paid;
(ii) where such dividends are paid out of profits of a company which
are subject to tax at a reduced rate of tax under special provisions
designed to promote investments necessary for the economic
development of Malta, the rate of Malta tax on the dividends shall
not exceed such reduced rate.
The provisions of this paragraph shall not affect the taxation of the company on the
profits out of which the dividends are paid.
(3) The term "dividends" in this Article means income from shares and other
income assimilated to income from shares by the taxation law of the Contracting
State of which the company making the distribution is a resident for the purposes of
its tax.
(4) The provisions of paragraph (2) shall not apply if the person beneficially
entitled to the dividends, being a resident of one of the Contracting States, 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 any such case the provisions of Article 7
or Article 14, as the case may be, shall apply.
(5) Dividends paid by a company which is a resident of one of the Contracting
States, being dividends to which a person who is not a resident of the other
Contracting State is beneficially entitled, shall be exempt from tax in that other State
except insofar as the holding in respect of which the dividends are paid is effectively
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connected with a permanent establishment or fixed base situated in that other State.
Provided that this paragraph shall not apply in relation to dividends paid by any
company which is a resident of Australia for the purposes of Australian tax and
which is also a resident of Malta for the purposes of Malta tax.
ARTICLE 11
Interest
(1) Interest arising in one of the Contracting States, being interest to which a
resident of the other Contracting State is beneficially entitled, may be taxed in that
other State.
(2) Such interest may be taxed in the Contracting State in which it arises, and
according to the law of that State, but the tax so charged shall not exceed 15 per cent
of the gross amount of the interest.
(3) The term "interest" in this Article includes interest from Government
securities or from bonds or debentures, whether or not secured by mortgage and
whether or not carrying a right to participate in profits, and interest from any other
form of indebtedness as well as all other income assimilated to income from money
lent by the taxation law of the Contracting State in which the income arises.
(4) The provisions of paragraph (2) shall not apply if the person beneficially
entitled to the interest, being a resident of one of the Contracting States, 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 indebtedness 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 14,
as the case may be, shall apply.
(5) Interest shall be deemed to arise in a Contracting State when the payer is
that State itself or a political subdivision or local authority of that State or a person
who is a resident of that State for the purposes of its tax. Where, however, the person
paying the interest, whether he is a resident of one of the Contracting States or not,
has in one of the Contracting States or outside both Contracting States a permanent
establishment or fixed base in connection with which the indebtedness on which the
interest is paid was incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be deemed to arise in the State in
which the permanent establishment or fixed base is situated.
(6) Where, owing to a special relationship between the payer and the person
beneficially entitled to the interest, or between both of them and some other person,
the amount of the interest paid, having regard to the indebtedness for which it is
paid, exceeds the amount which might have been expected to have been agreed upon
by the payer and the person so entitled 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 amount of the interest paid shall remain taxable according to
the law of each Contracting State, but subject to the other provisions of this
Agreement.
ARTICLE 12
Royalties
(1) Royalties arising in one of the Contracting States, being royalties to which a
resident of the other Contracting State is beneficially entitled, may be taxed in that
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other State.
(2) Such royalties may be taxed in the Contracting State in which they arise, and
according to the law of that State, but the tax so charged shall not exceed 10 per cent
of the gross amount of the royalties.
(3) The term "royalties" in this Article means payments or credits, whether
periodical or not, and however described or computed, to the extent to which they
are made as consideration for:
( a ) the use of, or the right to use, any copyright, patent, design or model,
plan, secret formula or process, trademark or other like property or
right;
( b ) the use of, or the right to use, any industrial, commercial or scientific
equipment;
( c ) the supply of scientific, technical, industrial or commercial knowledge
or information;
( d ) the supply of any assistance that is ancillary and subsidiary to, and is
furnished as a means of enabling the application or enjoyment of, any
such property or right as is mentioned in sub-paragraph ( a ), any such
equipment as is mentioned in sub-paragraph ( b ) or any such knowledge
or information as is mentioned in sub-paragraph ( c );
( e ) the use of, or the right to use - 
(i) motion picture films;
(ii) films or video tapes for use in connection with television; or 
(iii) tapes for use in connection with radio broadcasting; or
( f ) total or partial forbearance in respect of the use or supply of any
property or right referred to in this paragraph.
(4) The provisions of paragraph (2) shall not apply if the person beneficially
entitled to the royalties, being a resident of one of the Contracting States, 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 property or right in
respect of which the royalties are paid or credited is effectively connected with such
permanent establishment or fixed base. In such a case, the provisions of Article 7 or
Article 14, as the case may be, shall apply.
(5) Royalties shall be deemed to arise in a Contracting State when the payer is
that State itself or a political subdivision or local authority of that State or a person
who is a resident of that State for the purposes of its tax. Where, however, the person
paying the royalties, whether he is a resident of one of the Contracting States or not,
has in one of the Contracting States or outside both Contracting States a permanent
establishment or fixed base in connection with which the liability to pay the royalties
was incurred, and the royalties are borne by the permanent establishment or fixed
base, then the royalties shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
(6) Where, owing to a special relationship between the payer and the person
beneficially entitled to the royalties, or between both of them and some other person,
the amount of the royalties paid or credited, having regard to what they are paid or
credited for, exceeds the amount which might have been expected to have been
agreed upon by the payer and the person so entitled in the absence of such
relationship, the provisions of this Article shall apply only to the last-mentioned
amount.
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In that case, the excess part of the amount of the royalties paid or credited shall
remain taxable according to the law of each Contracting State, but subject to the
other provisions of this Agreement.
ARTICLE 13
Alienation of Property
(1) Income or gains from the alienation of real property may be taxed in the
Contracting State in which the real property is situated.
(2) Income or gains from the alienation of shares or comparable interests in a
company, the assets of which consist wholly or principally of real property, may be
taxed in the Contracting State in which the assets or the principal assets of the
company are situated.
(3) For the purposes of this Article -
( a ) the term "real property" has the same meaning that it has in Article 6;
and
( b ) any lease, interest or right referred to in any sub-paragraph of paragraph
(2) of that Article shall be regarded as situated where the land, mineral
deposits, oil, or gas wells, quarries or natural resources, as the case may
be, are situated or the exploration may take place.
ARTICLE 14
Independent Personal Services
(1) Income derived by an individual who is a resident of one of the Contracting
States in respect of professional services or other independent activities of a similar
character shall be taxable only in that State. However, if such an individual -
( a ) has a fixed base regularly available to him in the other Contracting State
for the purpose of performing his activities; or
( b ) in a year of income or in the year immediately preceding a year of
assessment, as the case may be, stays in the other Contracting State for a
period or periods aggregating more than 183 days for the purpose of
performing his activities; or
( c ) derives, in a year of income or in the year immediately preceding a year
of assessment, as the case may be, from residents of the other
Contracting State gross remuneration exceeding twelve thousand five
hundred Australian dollars or its equivalent in Malta liri from
performing his activities in that State,
so much of the income derived by him as is attributable to activities so performed
may be taxed in the other State.
(2) The Treasurer of Australia and the Minister responsible for finance in Malta
may agree in letters exchanged for the purpose to variations in the amount specified
in sub-paragraph ( c ) of paragraph (1) and any variations so agreed shall have effect
according to the tenor of the letters.
(3) The term "professional services" includes services performed in the exercise
of independent scientific, literary, artistic, educational or teaching activities, as well
as in the exercise of independent activities of physicians, lawyers, engineers,
architects, dentists and accountants.
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ARTICLE 15
Dependent Personal Services
(1) Subject to the provisions of Articles 16. 18 and 19, salaries, wages and other
similar remuneration derived by an individual who is a resident of one of the
Contracting States 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 from that exercise may be taxed in
that other State.
(2) Notwithstanding the provisions of paragraph (1), remuneration derived by an
individual who is a resident of one of the Contracting States 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 that other State for a period or periods not
exceeding in the aggregate 183 days in the year of income or in the year
immediately preceding the year of assessment, as the case may be, of
that other State; and
( b ) the remuneration is paid by, or on behalf of, an employer who is not a
resident of that other State; and
( c ) the remuneration is not deductible in determining taxable profits of a
permanent establishment or a fixed base which the employer has in that
other State; and
( d ) the remuneration is, or upon the application of this Article will be,
subject to tax in the first-mentioned State.
(3) Notwithstanding the preceding provisions of this Article, remuneration in
respect of an employment exercised aboard a ship or aircraft operated in
international traffic by a resident of one of the Contracting States may be taxed in
that State.
ARTICLE 16
Directors’ Fees
Directors’ fees and similar payments derived by a resident of one of the
Contracting States in his capacity as a member of the board of directors, or other
comparable body however described, of a company which is a resident of the other
Contracting State may be taxed in that other State.
ARTICLE 17
Entertainers
(1) Notwithstanding the provisions of Articles 14 and 15, income derived by
entertainers (such as theatrical, motion picture, radio or television artistes and
musicians and athletes) from their personal activities as such may be taxed in the
Contracting State in which these activities are exercised.
(2) Where income in respect of the personal activities of an entertainer as such,
accrues not to that entertainer but to another person, that income may,
notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting
State in which the activities of the entertainer are exercised.
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ARTICLE 18
Pensions and Annuities
(1) Pensions (including government pensions) and annuities paid to a resident
of one of the Contracting States shall be taxable only in that State.
(2) The term "annuity" means a stated sum payable 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.
(3) Notwithstanding anything in this Agreement, any pension or allowance that
is paid by one of the Contracting States in respect of wounds, disabilities or death
caused by war, or in respect of war service, and is exempt from tax under the law of
that State, to a resident of the other Contracting State shall be exempt from tax in
that other State.
ARTICLE 19
Government Service
(1) Remuneration, other than a pension or annuity, paid by one of the
Contracting States or a political sub-division or local authority of that State to any
individual in respect of services rendered in the discharge of governmental
functions, shall be taxable only in that State. However, such remuneration shall be
taxable only in the other Contracting State if the services are rendered in that other
State and the recipient is a resident of that other State who -
( a ) is a citizen of that State; or
( b ) did not become a resident of that State solely for the purpose of
performing the services.
(2) The provisions of paragraph (1) shall not apply to remuneration in respect of
services rendered in connection with any trade or business carried on by one of the
Contracting States or a political sub-division or local authority of that State. In such
a case, the provisions of Article 15 or Article 16, as the case may be, shall apply.
(3) Where remuneration is paid under a development assistance programme of a
Contracting State, out of funds exclusively supplied by that State, to a specialist or
volunteer seconded to the other Contracting State with the consent of that other
State, such remuneration shall be deemed to have been paid by the first-mentioned
State and shall be taxable only in that State.
ARTICLE 20
Students
Where a student, who is a resident of one of the Contracting States or who was a
resident of that State immediately before visiting the other Contracting State and
who is temporarily present in that other State solely for the purpose of his education
at a university, college, school or other similar educational institution, receives
pavements from sources outside that other State for the purpose of his maintenance
or education, those payments shall be exempt from tax in that other State.
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ARTICLE 21
Income Not Expressly Mentioned
(1) Items of income of a resident of one of the Contracting States which are not
expressly mentioned in the foregoing Articles of this Agreement shall be taxable
only in that State.
(2) However, any such income derived by a resident of one of the Contracting
States, from sources in the other Contracting State, may also be taxed in that other
State.
(3) The provisions of paragraph (1) shall not apply to income derived by a
resident of one of the Contracting States where that income is effectively connected
with a permanent establishment or fixed base situated in the other Contracting State.
In such a case, the provisions of Article 7 or Article 14, as the case may be, shall
apply.
ARTICLE 22
Sources of Income
Income derived by a resident of one of the Contracting States which, under any
one or more of Articles 6 to 8, Articles 10 to 19 and Article 21, may be taxed in the
other Contracting State shall, for the purposes of Article 23 and of the income tax
law of that other State, be deemed to be income from sources in that other State.
CHAPTER IV
Methods of Elimination of Double Taxation
ARTICLE 23
(1) Subject to the provisions of the law of Australia from time to time in force
which relate to the allowance of a credit against Australian tax of tax paid in a
country outside Australia (which shall not affect the general principle hereof), Malta
tax paid under the law of Malta and in accordance with this Agreement, whether
directly or by deduction, in respect of income derived by a person who is a resident
of Australia from sources in Malta (not including, in the case of a dividend, tax paid
in respect of the profits out of which the dividend is paid) shall be allowed as a credit
against Australian tax payable in respect of that income.
(2) A company which is a resident of Australia is, in accordance with the
provisions of the taxation law of Australia in force at the date of signature of this
Agreement, entitled to a rebate in its assessment at the average rate of tax payable by
the company in respect of dividends that are included in its taxable income and are
received from a company which is a resident of Malta. However, should the law so
in force be amended so that the rebate in relation to the dividends ceases to be
allowable under that law, Australia shall immediately advise Malta of the change
and enter into negotiations with Malta in order to establish new provisions
concerning the credit to be allowed by Australia against its tax on the dividends.
(3) For the purposes of paragraph (1) and of the income tax law of Australia:
( a ) a resident of Australia deriving income from sources in Malta consisting
of dividends to which sub-paragraph (2)( b )(ii) of Article 10 applies,
interest to which Article 11 applies or royalties to which Article 12
applies, being income in respect of which Malta tax has been wholly
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relieved or reduced for a limited period of time under the provisions of
the Aids to Industries Ordinance, so far as they were in force on, and
have not been modified since, the date of signature of this Agreement,
or have been modified only in minor respects so as not to affect their
general character, or under any other provisions which may
subsequently be agreed by the Contracting States in letters exchanged
for the purpose through the diplomatic channel to be of a substantially
similar character, shall be deemed to have paid Malta tax in an amount,
or the Malta tax paid shall be deemed to have been increased by an
amount, equal to the amount by which the Malta tax that otherwise
would have been payable (which tax, in the case of dividends, shall not
exceed 15 per cent and, in the case of royalties or interest, 10 per cent of
the gross amount thereof) is reduced by the exemption or reduction
granted; and
( b ) the amount of the said dividends, interests or royalties shall be deemed
to be the amount that would have been the amount of the dividends,
interest or royalties if no Malta tax had been paid, increased by the
amount by which the tax that otherwise would have been payable is
reduced by the said exemption or reduction.
(4) Paragraph (3) shall not apply in relation to income derived in any year of
income after the year of income that ends on 30 June 1989 or on any later date that
may be agreed by the Contracting States in letters exchanged for this purpose.
(5) ( a ) Subject to the provisions of the law of Malta from time to time in force
which relates to the allowance of a credit against Malta tax of tax paid in a country
outside Malta (which shall not affect the general principle hereof), Australian tax
paid under the law of Australia and in accordance with this Agreement, whether
directly or by deduction, in respect of income derived by a person who is a resident
of Malta from sources in Australia (not including, in the case of a dividend, tax paid
in respect of the profits out of which the dividend is paid) shall be allowed as a credit
against Malta tax payable in respect of that income.
( b ) Where a company which is a resident of Australia pays a dividend to a
company which is a resident of Malta and which controls directly or indirectly at
least 10 per cent of the voting power in the first-mentioned company, the credit shall
take into account (in addition to any Australian tax for which credit may be allowed
under sub-paragraph ( a )) the Australian tax payable by that first-mentioned company
in respect of the profits out of which such dividend is paid.
(6) Where under this Agreement income is to be relieved from tax in one of the
Contracting States and, under the law in force in the other Contracting 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 only to so much of the income as is remitted to or
received in the other State.
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CHAPTER V
Special Provisions
ARTICLE 24 
Mutual Agreement Procedure
(1) Where a resident of one of the Contracting States considers that the actions
of the competent authority of one or both of the Contracting 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 Contracting State of which he is a resident.
The case must be presented within three years from the first notification of the action
giving rise to taxation not in accordance with this Agreement.
(2) The competent authority shall endeavour, if the claim appears to it to be
justified and if it is not itself able to arrive at an appropriate solution, to resolve the
case with the competent authority of the other Contracting State, with a view to the
avoidance of taxation not in accordance with this Agreement. Any solution so
reached shall be implemented notwithstanding any time limits in the national laws of
the Contracting States.
(3) The competent authorities of the Contracting States shall jointly endeavour
to resolve any difficulties or doubts arising as to the interpretation or application of
this Agreement.
(4) The competent authorities of the Contracting States may communicate with
each other directly for the purpose of giving effect to the provisions of this
Agreement.
ARTICLE 25
Exchange of Information
(1) The competent authorities of the Contracting States shall exchange such
information as is necessary for the carrying out of this Agreement or of the domestic
laws of the Contracting States concerning the taxes to which this Agreement applies
insofar as the taxation thereunder is not contrary to this Agreement. The exchange of
information is not restricted by Article l. Any information received by the competent
authority of 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) concerned
with the assessment or collection of, enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes to which this Agreement applies
and shall be used only for such purposes.
(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 or the
administrative practice of that or of the other Contracting 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 Contracting
State;
( c ) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or to
supply information the disclosure of which would be contrary to public
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policy.
ARTICLE 26
Diplomatic and Consular Officials
(1) 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 international agreements.
(2) Notwithstanding Article 4, an individual who is a member of a diplomatic
mission, consular post or permanent mission of one of the Contracting States which
is situated in the other Contracting State or in a third State shall be deemed for the
purposes of this Agreement to be a resident of the sending state if he is liable in the
sending State to the same obligations in relation to tax on his total income as are
residents of that sending State.
(3) This Agreement shall not apply to International Organizations, to organs or
officials thereof or to persons who are members of a diplomatic mission, consular
post or permanent mission of a third State, being present in a Contracting State and
who are not liable in either Contracting State to the same obligations in relation to
tax on their total income as are residents thereof.
CHAPTER VI 
Final Provisions
ARTICLE 27 
Entry into Force
This Agreement shall enter into force on the date on which the Contracting States
exchange notes through the diplomatic channel notifying each other that the last of
such things has been done as is necessary to give this Agreement the force of law in
Australia and in Malta, as the case may be, and thereupon this Agreement shall have
effect:
( a ) in Australia:
(i) in respect of withholding tax on income that is derived by a non-
resident, in relation to income derived on or after 1 January in the
calendar year next following that in which the Agreement enters
into force;
(ii) in respect of other Australian tax, in relation to income of any
year of income beginning on or after 1 July in the calendar year
next following that in which the Agreement enters into force;
( b ) in Malta:
in relation to taxes which are levied for the year of assessment
beginning on 1 January in the second calendar year following that in
which the Agreement enters into force and for any subsequent year of
assessment.
ARTICLE 28
Termination
This Agreement shall continue in effect indefinitely, but either of the Contracting
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States may, on or before 30 June in any calendar year beginning after the expiration
of 5 years from the date of its entry into force, give to the other Contracting State
through the diplomatic channel written notice of termination and, in that event, this
Agreement shall cease to be effective:
( a ) in Australia:
(i) in respect of withholding tax on income that is derived by a non-
resident, in relation to income derived on or after 1 January in the
calendar year next following that in which the notice of
termination is given;
(ii) in respect of other Australian tax, in relation to income of any
year of income beginning on or after 1 July in the calendar year
next following that in which the notice of termination is given;
(b) in Malta:
in relation to taxes which are levied for the year of assessment
beginning on 1 January in the second calendar year following that in
which the notice of termination is given and for subsequent years of
assessment.
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed
this Agreement.
DONE in duplicate at Valletta, Malta, this ninth day of one thousand nine hundred
and eighty-four in the English language.
FOR MALTA
(sgd.) A. SCEBERRAS TRIGONA
FOR AUSTRALIA
(sgd.) N. ROSS SMITH
