United States-Malta Treaty on Income Taxes Message to the Senate Transmitting the Treaty.

To the Senate of the United States:

I transmit herewith, for Senate advice and consent to ratification, the Treaty between the United States of America and the Republic of Malta with Respect to Taxes on Income, together with a related exchange of notes, signed at Valletta on March 21, 1980. For the information of the Senate, I also transmit the report of the Department of State with respect to the Treaty.

For the most part, the Treaty follows the pattern of the United States model income tax convention, although there are some deviations from the model to accommodate Malta's status as a developing country. For example, in the Treaty, business profits of an enterprise of one country may be taxed by the other only if they are attributable to a permanent establishment in the other country. However, the definition of a permanent establishment is somewhat more broadly drawn in the Treaty than in the model convention.

The Treaty contains the usual rules relating to real property income, shipping income, capital gains, the treatment of entertainers, students, teachers, pensioners and governmental employees, and nondiscrimination and administrative cooperation.

The accompanying exchange of notes sets forth certain understandings between the two Governments.

I recommend that the Senate give early and favorable consideration to the Treaty and give advice and consent to its ratification.

JIMMY CARTER

The White House,

April 21, 1980.