On May 22 2014 the double taxation agreement (DTA) between Malta and Russia is to enter into force. Under the agreement, withholding tax on dividends paid from Russia is restricted to 5% where the recipient company has a 25% shareholding in the payer, and in other cases the withholding tax is restricted to 10%. The withholding tax charged by Russia on interest and royalties is restricted to 5%. Malta does not impose withholding tax on dividends, interest or royalties paid to companies abroad, subject to certain conditions.
It should be noted that under the agreement a permanent establishment may be created where an enterprise provides services in the other contracting state though individuals who are present in the other contracting state for at least 183 days in any twelve month period.
