Long-awaited US-Malta tax agreement to be signed tomorrow

The long awaited double taxation avoidance agreement between Malta and the United States is to be signed tomorrow.

The agreement will be signed by Finance Minister Tonio Fenech and US ambassador Molly Bordanaro in the presence of the Prime Minister. It will have to be ratified by the US Senate before it can come into force.

The agreement was initialled in April and had been welcomed by the American Chamber of Commerce in Malta (AmCham Malta), which hailed it as a major milestone in Malta's longstanding diplomatic and economic relations with the US.

It expressed confidence that the agreement would be conducive to the right conditions for US companies to invest in Malta and envisaged significant positive developments in this regard.

Likewise, it added, such a measure considerably eased the tax impact for Maltese businesses interested in doing business in the US.

The talks on the agreement started years ago and received a boost in 2005 following a meeting at the White House between Prime Minister Lawrence Gonzi and President George Bush.

The talks were conducted in parallel with talks on a request by Malta for the US to waive visa requirements for Maltese travellers.

In April the two countries signed a memorandum of understanding which was described as the first step for Malta to obtain visa exempt status.

Malta will first have to introduce biometric passports - which use enhanced identification parameters such as fingerprints, before the status is granted. The passports are expected to start being introduced at the end of the year.

The EU had been criticial of the MoU, arguing that the visa waiver status should be granted to all EU countries.