Pharmaceutical firm to benefit from double tax agreement

Malta and Iceland have signed a double taxation agreement that will enable nationals from both countries to avoid paying taxation twice.

Maltese nationals having business interests in Iceland and Icelandic nationals having business interests in Malta will now be allowed to pay tax due on income in one country only.

Before this agreement, Maltese enterprises registered in Iceland and Icelandic enterprises registered in Malta would pay income tax on profits in the country where the business operation was based and the equivalent tax in their country of origin, unless unilateral tax release was applied.

Foreign Affairs Minister Michael Frendo said that such agreements provided an improved climate between two countries to foster business opportunities.

Similar agreements between Malta and other countries exist. Since gaining Independence in 1964, Malta has signed 44 double taxation agreements with different countries, and the Foreign Affairs Ministry is negotiating another 17 such agreements.

The double taxation agreement will especially benefit Actavis Ltd, the pharmaceutical company formerly known as Pharmamed. "We believe this agreement is a very positive step toward enhancing commercial trade between Malta and Iceland and creates opportunities to invest in Malta, which already boasts a well educated and skilled workforce," Actavis Ltd managing director Steinthor Palsson told The Times.

"We look forward to expanding our production facilities in this region and increasing our exports. This will lead to the creation of more jobs and further benefit the overall growth of the Maltese economy," he said.

Established in 1976, Actavis now employs close to 300 staff. Its original focus was on the supply of essential pharmaceuticals to aid agencies such as Unicef. Today the majority of its manufactured products are sold within the highly regulated and competitive EU markets.