Malta expands tax treaty network with Uruguay agreement
Malta and Uruguay have concluded negotiations on a double taxation agreement between the two countries, which is expected to be signed later on this year.
This announcement assumes particular importance in consideration of the fact that despite Malta’s extensive tax treaty network of over fifty agreements, so far, it has not yet signed a double taxation agreement with any South American country.
Efforts have been made and are still being made to strengthen economic relations with South America and, for this reason, an attempt is being made to conclude tax treaties with a number of South American countries with a view to remove the obstacles that double taxation presents to the development of economic relations between countries.
This DTA seeks to create attractive conditions for Uruguayan and Maltese investors but, at the same time, contains some provisions intended to prevent tax avoidance through improper use of the treaty. The Exchange of Information article in this treaty is in line with internationally agreed standards and establishes the proper channels for exchange of information in a mutual effort to prevent tax evasion.
Minister of Finance, the Economy and Investment Tonio Fenech expressed his satisfaction that a South American country will be added to Malta’s tax treaty network. “This agreement with Uruguay signals the government’s intention to strengthen economic relations with South American countries and, hopefully, will lead the way to the conclusion of a number of double taxation agreements with other South American countries. South America is a region with a number of very important emergent markets that are experiencing important growth rates and in the context of widening our horizons in terms of attracting trade and investment, such agreements assume paramount importance.”
Economic growth for Uruguay averaged 8% annually during the period 2004-08. The 2008-09 global financial crisis slowed Uruguay's previously strong growth, which decelerated to below 2% in 2009. Nevertheless, the country managed to avoid a recession and keep positive growth rates. This was achieved particularly through higher public expenditure and investment.
