Another important step in the process leading to a Double Taxation Treaty between Malta and the United States of America was taken in the first week of August 2008. The Treaty has been signed by the respective officials in Malta and the United States and will now go before the United States Senate for ratification before coming into force. It will also be published by both the US Treasury and the Government of Malta to become a public document prior to ratification.

A Treaty for the Avoidance of Double Taxation with the United States is of significant importance to Malta for a number of reasons. Cross border trade, commerce and investment can only foster and grow if businesses are allowed to transact with a degree of certainty, double tax treaties are economic instruments that benefit individuals and corporate entities, as well as of the partner states involved.

Double Taxation treaties have played an integral role in the development of Malta’s economy since it became independent. These international agreements have allowed tax issues with partner countries to be clarified, international double taxation to be avoided, and fiscal evasion to be curtailed. In the local context, they have helped Malta develop trade relations with other countries, assisted the flow of inward direct investment and served as an important platform for Maltese residents doing business in partner countries.

Double tax treaties have thus become a vital tool in Malta’s drive to increase the level of cross-border business not just in the export of goods but also in services and capital movement, which are good growth areas for Malta.

The addition of the Malta / United States Double Taxation treaty is a welcome addition to strengthening Malta’s relationship with the United States. The removal of any potential trade barriers between Malta and the United States through establishing internationally accepted provisions for the avoidance of double taxation on the same income will benefit both countries. The treaty also establishes appropriate channels for exchange of information in the mutual efforts of both countries to prevent fiscal evasion.

Malta has a number of other treaties at negotiation stage. When these are concluded they will further strengthen Malta’s increasingly diversified economy.

Malta and the United States established full diplomatic relations upon Malta's independence in 1964. Over the years this relationship developed into good trade relations between Malta and the United States. This agreement will further improve quality of trade even further, strengthen communication and encourage investment.

US firms participating in the Maltese economy has always been significant in relative terms. Firms operating in Malta that have US ownership or investment include major hotels, manufacturing and repair facilities, and some offices servicing local and regional operations.

Malta’s proximity to North Africa, EU membership, the island’s safety, the capability of professional staff, the application of international standards and high quality of life make Malta an attractive proposition. US participation is therefore expected to grow over time and this will be beneficial to both countries as economic ties expand.