Quantity vs quality : an analysis of selected Maltese double taxation treaties

Abstract

Purpose: The purpose of this dissertation is to evaluate quantity and quality issues arising in Malta's double taxation treaties and determine whether Malta's competitiveness improves as a result of having a large treaty network or/and having treaties of good quality. Design: Primary data was gathered through semi-structured interviews. This technique was chosen as it enables the author to discuss and obtain explanations and examples to support the arguments brought forward by the interviewees. The interviews were designed to obtain an understanding from local practitioners and the representative of the International Tax Unit, relating to quality and quantity issues arising from Malta's treaty network. Findings: Having a large treaty network is important to promote Malta for investment purposes; however, quantity alone will not lead to more investment. Negotiating good quality treaties is fundamental. This is achieved by: - Negotiating better terms than Malta's tax competitors, - Making sure that treaties are up-to-date, properly drafted and easy to access, - Creating opportunities for tax planning and - Using the Organisation for Economic Co-operation and Development Model. Conclusion Considering Malta's size, resources and limited bargaining power, Malta has an extensive tax treaty network and compares well within the EU, with major non-European countries and its tax competitors. The network includes treaties which contain advantageous terms; however, it also includes treaties which contain several restrictions. The extent of these restrictions is limiting the use of these treaties. Malta's treaty network can be improved through negotiating better treaties, renegotiating existing treaties and improving the negotiation process. Value: This research is motivated by the need to improve Malta’s competitiveness when negotiating future treaties.