Malta-Serbia sign double taxation agreement

Malta signed its 12th bilateral double taxation agreement with Serbia on Wednesday 9th September 2009, following talks between the Maltese Deputy Prime Minister and Minister of Foreign Affairs Hon. Dr. Tonio Borg and the Serbian Minister of Foreign Affairs Vuk Jeremic.

This agreement flows from Malta’s recognition of the pro-European coalition government in Serbia that was formed on 7th July 2008, following a period of troubles in the Balkans between 1992 and 1995. In this respect Malta will urge the Serbian leaders in moving Serbia closer to the EU and become part of the eurozone, in view of hope of enhancing cooperation in the fields of trade, investment opportunities, financial interactions, culture, education and future bilateral trade relations.

This is particularly important in view of the fact that in 2008 the total trade dropped from just over €2M in 2007 to €1.2M. Currently, trade is restricted to a few items: cereals (50%), printed materials (25%), rubber products, furniture and aircraft spare parts are imported, whilst organic chemicals, pharmaceutical products and clothing are exported. This sharp drop is majorly attributed to the deterioration of the Serbian Dinar by 15% against the Euro.

Apart from aiding in the increase of trade flows, Maltese and Serbian businessmen could also take advantage of the respective regional expertise to assist each other in undertaking projects in neighbouring countries. From the Maltese perspective, in view of the country's emphasis in attracting more knowledge-based industries such as healthcare, pharmaceuticals and medical related products, ICT, including electronics, mechanical engineering, knowledge-based services and renewable sources of energy, it is highly appropriate to encourage Serbian companies to take this opportunity and invest in Malta. This is particularly true in the IT industry where the quality of graduates is high and IT companies have been very successful. This success is mainly attributed to foreign owned companies, thus Malta is an excellent location for investment by information technology and telecommunications companies.

Culturally, this double taxation agreement opens up the possibility of establishing town twinning arrangements between Maltese and Serbian villages, and subsequently increasing tourism between the two countries. Additionally, certain sectors such as the English Language Schools can be further exploited by Serbian students.

Currently, approximately 3000 Serbian nationals reside in Malta. Their employment is mainly in the construction and tourism sector, which is positively contributing towards expansion of the Maltese economy. Other Serbian nationals wishing to visit Malta for tourism, education or business purposes require a visa. Since Malta does not have an embassy in Belgrade, this is made possible through collaboration with the Spanish authorities (the Maltese Visa Office is inside the Spanish Embassy in Belgrade). Currently there are 300 visa applications, the majority of which were approved and issued.


Comparative Indicators 2008