ADDRESS BY THE HON. LAWRENCE GONZI, PRIME MINISTER, AT THE SIGNING OF THE TEXT OF THE DOUBLE TAXATION TREATY WITH THE U.S.A. – AUBERGE DE CASTILLE, VALLETTA – 8TH AUGUST 2008
Your Excellency, Distinguished Guests, Ladies and Gentlemen, Good morning.
It is with great personal satisfaction that I stand here today announcing that we have reached another milestone through the signing of the text of the Double Taxation Treaty with the USA.
As you may recall, this issue was high on the agenda in the meeting I had with President Bush in Washington in 2005. Since then teams from our Ministry of Finance and the US Treasury have been working painstakingly to conclude this agreement.
The discussions, negotiations and the follow-up work have been successful and we look forward to having this treaty in operation in the not too distant future.
The USA makes a welcome addition to our tax treaty network. In fact, some 12 years ago we already had a similar agreement in place that is why it was important that we re-establish our relationship with the US at this level.
We now have treaties with about 50 countries, with some in the pipeline at various stages of negotiation. These ensure the removal of any potential trade barriers between our respective countries by establishing internationally accepted provisions for the avoidance of double taxation on the same income. They also establish appropriate channels for exchange of information between our respective countries in our mutual efforts to prevent fiscal evasion.
In the face of international developments, my Government will continue in its endeavour to negotiate tax treaties with other jurisdictions making this a central pillar of our increasingly diversified economy.
Malta and the United States established full diplomatic relations upon Malta’s independence in 1964. Over the years this relationship has developed, although there where some difficult times. However, what is certain is that under my government, this relationship has continued to strengthen and can currently be described as both active and cordial.
Today, Malta and the United States enjoy a good relationship on a number of levels.
Minister Fenech has already highlighted the good trade relations we have with the US. Through this agreement we hope to improve quality trade even further, strengthen our communication and encourage investment.
We always believed that our country has the potential to attract high quality investment from the USA. Recently, Foreign Direct Investment into Malta has been strong as a result of our highly educated, English-speaking population, excellent reputation for back-office and financial services and the significant investment going into such diverse areas as aviation, pharmaceuticals and Information and Communication Technology (ICT). The advent of SmartCity is another area where there is potential benefit for both countries.
The number of 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.