Finance Minister Tonio Fenech has announced that a new double-taxation agreement with Libya had come into effect from basis year 2011.

Answering a question in Parliament by Labour MP Charles Mangion, the minister said the new agreement was based on the OECD model. It had replaced the previous agreement with Libya, which had a different format in that in practice it was only the country of income that could tax workers. Now it was both the country of income and the worker’s country of residence which could impose tax before the double-taxation relief came into force in the latter.

Minister Fenech said Maltese workers in Libya were taxed 15 per cent in Malta when they qualified under the dispositions of overseas employment. The double-taxation relief came into effect if tax was also being paid in Libya.