The State of Israel recently signed a double tax treaty with Malta as part of the Ministry of Finance's policy to expand the number of treaties signed by Israel. At the same time, Israel's signing of a treaty with another country has led to an expansion of the network of treaties that facilitate the payment of double taxation and serve as a convenient basis for investment and provision of services. Furthermore, the Convention contains a clause that allows the exchange of information between the tax authorities of Israel and Malta, based on the OECD model convention to which Israel has recently joined. The Convention shall enter into force upon ratification.
It should be noted that the rates of withholding tax in the country in which the payment is made (source country) were set at 5% of interest payments and 0% -15% of dividends. With regard to capital gains, the tax shall be in the country of residence of the seller. Malta's outstanding advantage stems from the fact that Malta is a party to many treaties to prevent double taxation and can serve as a convenient basis for investments and services throughout Europe and the world.
Eli Ellis, CPA and Managing Director of BDO Ziv Haft International (www.bdo.co.il), an accountancy firm that is part of the international network BDO, which operates in more than 110 countries and ranks among the five largest firms in Israel, added that Malta A unique tax method that allows for the payment of a full corporate tax that is partly or fully refunded when the profits are distributed to the foreign shareholder as a dividend This method of taxation may be advantageous to investors from various policies that may, for example, avoid implementing the provisions of a foreign controlled company [CFC] Using this tax method.The fact that Malta is part of the European Union allows Malta to benefit from the tax [arrangements] of the consolidation Thus making it attractive to various investors, no less than Cyprus - its spiritual sister.
Published in Afik News 082 17.08.2011