site.btaCabinet Approves Revision to Draft Double Taxation Treaty between Bulgaria, Malta

The caretaker Government Wednesday approved an amendment to a draft Double Taxation Treaty between Bulgaria and Malta and authorized the Minister of Finance to sign the treaty on behalf of Bulgaria, subject to ratification by Parliament.

The initial draft agreement was approved by a Council of Ministers decision of July 8, 2020, as a basis for negotiations. Following the negotiations held by both countries in October 2022 and November 2023, revisions were made to the initial draft in order to reach a common draft agreement. These changes constitute a substantial departure from the draft treaty pursuant to Article 11(2) of the International Treaties of the Republic of Bulgaria Act, which is subject to approval by the Council of Ministers.

The current Treaty between Bulgaria and Malta was signed in 1986 in the context of different socio-economic relations and a different tax system.

The new Treaty will create clearer, more balanced, and up-to-date rules for the allocation of taxing powers between the two countries. In addition to rules for double taxation avoidance, it will introduce more effective mechanisms to limit the misuse of its provisions and both countries’ national tax laws. This will provide an appropriate legal framework to counter tax avoidance.