Malta and the USA have agreed on the text of a Treaty for the Avoidance of Double Taxation.

Tonio Fenech, Minister of Finance, Economy and Investment, initialled the text in the presence of US Ambassador Molly Bordonaro on March 27, the government said yesterday.

Michael Mundaca headed the US Treasury delegation in Malta and initialled the document on behalf of the United States.

The government said this is the latest milestone reached in a process which commenced with a meeting between Prime Minister Lawrence Gonzi and President George Bush in 2005.

"It ends formal negotiations and prepares the treaty text agreed between the two countries for ratification through a United States Senate for Foreign Relations review.

"The treaty text is published on ratification as agreed between both governments," the government said.

Mr Fenech expressed his satisfaction at the achievement of such a treaty with the US. Malta has a network of over 46 such treaties.

A double taxation agreement with the US is considered to be crucial to attract more American investment into Malta.

It will also allow for the establishment of channels for exchange of tax information between countries in their efforts to prevent fiscal evasion.

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