VALETTA - On October 9, representatives from the finance ministries of Curaçao and Malta met in Malta's capital to discuss important agreements affecting both countries. One of the key topics was the tax treaty between Curaçao and Malta. This treaty aims to prevent companies from being taxed twice while also ensuring they cannot exploit loopholes to avoid paying any taxes altogether.
The tax treaty between the two countries has been in place since 2015, but both countries have deemed the rules outdated. Since then, new, stricter global agreements have been established to combat tax avoidance. These new regulations, known as BEPS (Base Erosion and Profit Shifting), are designed to prevent companies from relocating their profits to countries where they face little to no tax obligations.
To align the tax treaty with the new international rules, Curaçao and Malta are currently collaborating on a so-called "notification" to the Organization for Economic Co-operation and Development (OECD). This is an important step to officially implement the new agreements and ensure that the treaty meets the latest standards.
Curaçao's Minister of Finance, Javier Silvania, has established a special team to expand and update the network of tax treaties. This is significant because tax treaties can help stimulate international trade and investment. Companies gain more confidence to invest in Curaçao, knowing that the tax regulations are clear and fair.
During the meeting, discussions also focused on a joint ship registration. This means that Curaçao and Malta intend to collaborate on rules for vessels sailing under their flags, with taxes calculated based on the size of the ship. Additionally, both countries explored the possibility of cooperating in the stock exchange sector to further strengthen their economic ties.
Online Gambling Sector
The tax treaty between Curaçao and Malta could have significant implications for the online gambling sector in both countries, as both Curaçao and Malta are recognized hubs for online gaming.
Curaçao has long had a thriving online gambling sector, with many companies based on the island due to favorable tax regulations and licenses for online gaming. The tax treaty with Malta could affect how these companies pay taxes. Firms operating in both Curaçao and Malta could benefit from a clearer framework regarding their tax obligations, thus avoiding double taxation.
This means that a company would not have to pay taxes on the same income in both countries. At the same time, the treaty ensures that companies cannot abuse the differing tax regulations to pay too little or no taxes at all. With the introduction of international standards like BEPS, the sector must prepare for stricter regulations.