Malta ratifies convention on mutual tax support

The Joint Council of Europe/OECD Convention on Mutual Administrative Assistance in Tax Matters was developed jointly by the Council of Europe and the OECD and opened for signature by the member states of both organisations on 25 January 1988. 

In April 2009, the G20 called for action “to make it easier by developing countries to secure the benefits of the new cooperative tax environment, including a multilateral approach for the exchange of information”.  In response the OECD and the Council of Europe developed a Protocol amending the Convention to bring it in line with the international standard on exchange of information for tax purposes and to open it up to all countries.  Previously, it was only open to members of the OECD and the Council of Europe.    

The Convention is a freestanding multilateral agreement designed to promote international co-operation for a better operation of national tax laws, while respecting the fundamental rights of taxpayers. The Convention provides for all possible forms of administrative co-operation between the parties in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. The Convention has been amended by a Protocol which entered into force on 1 June 2011. This Protocol brought the Convention in line with the international standard and opened it for signature by all countries.  Already 39 countries have signed the Convention including emerging and developing economies, and many more have expressed interest in signing it.

In relation to direct taxation and VAT, Malta already provides administrative co-operation through its wide network of tax treaties and relevant EU directives (albeit to EU Member States only). Considering this fact and that signing this Convention would give more credibility to Malta in the current international scenario where transparency and exchange of information on tax matters is concerned, the Government of Malta has decided to sign this Convention as amended by the Protocol.

The signing of the Convention is also expected to be beneficial to Malta in the ongoing review by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. Although Malta is already placed on the OECD’s white list, it also serves to elevate Malta to white list status with jurisdictions that have already signed to it. Such status is important in Malta's efforts to continue attracting further direct investment, thus creating more jobs on our shores