Double taxation treaty between Malta and Switzerland

Double taxation often crops up for companies doing business internationally and can be such a headache to the modern business world. Maltese citizens contemplating of doing business in Switzerland and Swiss citizens who want to do business in Malta vice versa will be relieved to know of the June 2012 standing treaty that prevents double taxation for legal entities carrying out taxable activities in either of the two states.
The Malta-Switzerland double taxation agreement benefits Maltese and Swiss businesses and natural persons who partake in taxable activities in either Malta or Switzerland. 
The treaty between Malta and Switzerland allows:

  • Attractive limitation of withholding taxes on dividends and,
  • An elimination of withholding taxes on royalties

The legal framework of the treaty targets income taxes in the following brackets:
Malta Tax 

  • The income tax

Income tax is charged on the gross income earned by an entity from its business activities within Malta
Swiss Tax Regime

  • Federal tax
  • Capital gains
  • Cantonal tax

Each canton has a different applicable tax rate with cantons such as Geneva and Basel having higher tax rates. Special taxes and other benefits also apply as per canton.

  • Communal tax

Communal tax on(total income, income from capital, earned income, industrial and commercial profits)
Under the treaty, Irish based businesses with operations in Switzerland are liable to taxation on these three levels. Tax on income and investments on foreign businesses are subject to double taxation treaties.
How to avoid double taxation 

  • In Malta

It can be avoided by granting a credit against the tax in Malta related to the imposition of the Swiss tax.

  • In Switzerland

-Residents of Switzerland paying taxes in Malta can get tax deductions, lump sums or even full exemptions in Switzerland.
-Residents of Switzerland can be taxed for tax returns in Malta but apply for tax returns in their home country.
-Swiss-resident companies paying taxes in Malta can also get tax relief equivalent to the tax the company would pay in Switzerland.
Professional Assistance
The Double taxation agreement between Malta and Switzerland follows the guidelines of the Organization for Economic Co-operation and Development Model Tax Convention.  For a deeper and more detailed explanation of the Malta-Switzerland DTA, feel free to get in touch with our team at SIGTAX . Our expert team of lawyers, accountants and consultants is ready to assist you in each step.  Our lawyers can provide you with finer details on the legal aspects pertaining to the double taxation system in Malta so that you don’t skip any necessary steps.


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