On the 10th of April 2014 Malta and Moldova signed the first income tax treaty and an accompanying protocol.
The treaty provides for withholding at source, at the following rates:
– A 5% rate will apply where dividends are paid by a resident of Moldova to a resident of Malta that is the beneficial owner of the dividends. In the case of Malta, no withholding tax effectively will be levied, since any withholding tax on dividends may not exceed the tax chargeable on the distributable profits.
– The rate on interest and royalties generally will be 5%.
However, the term “royalties” does not include payments for the use of, or the right to use, industrial, commercial or scientific equipment (e.g. leasing income).
The source state may tax gains derived by a resident of the other state from the alienation of shares deriving more than 50% of their value, directly or indirectly, from immovable property situated in the source state.
The above DTT is similar to the Cyprus and Moldova, although Cyprus is superior as it is the old OECD model without exchange of information or any capital gains tax in the case of sale of shares of companies with more than 50% of their value in real estate.