India–Malta tax treaty — rates, PE and MLI

The rates, at a glance

Every figure below is taken from the article named beside it, not from a rates table. Read the condition in the same row before you use the rate — in this treaty the condition is usually the whole answer.

Income	Rate	The condition attached to it	Article
Dividends	10 per cent of the gross amount of the dividends — but only for dividends paid by an indian company to A maltese resident. Art. 10(2)(a): 'if the dividends are paid by a company that is a resident of India to a resident of Malta who is the beneficial owner thereof, the tax charged by India shall not exceed 10 per cent of the gross amount of the dividends'.	There is no shareholding threshold and no second tier. This is unusual and worth stating expressly, because the reflex is to look for a 5%/25% split. There is one Indian-source rate — 10 per cent — available…	Article 10, paragraph 2(a)
Interest	10 per cent of the gross amount of the interest — Art. 11(2), a single flat ceiling, conditional on the beneficial owner of the interest being a resident of the other Contracting State. Identical in both records.	The exemptions sit in the article itself, at art. 11(3), not in the protocol — and Malta's version is one of the more precise ones in the Indian network because it names the institutions. The chapeau is…	Article 11, paragraph 2 and 3
Royalties	10 per cent of the gross amount — Art. 12(2). Royalties and fees for technical services share one rate; there is no split, no lower tier for equipment royalties, no lower tier for copyright and no separate FTS rate. Conditional on beneficial ownership by a resident of the other Contracting State.	Art. 12(3)(a) royalty definition is the standard wide Indian form: copyright of literary, artistic or scientific work including cinematograph films or films or tapes used for television or radio broadcasting…	Article 12, paragraph 2
Fees for technical services	10 per cent of the gross amount — the same rate as royalties, under the same Art. 12(2).	There is an FTS article and IT has no make-available limb. Art. 12(3)(b) is short and wide: 'The term fees for technical services as used in this Article means payments of any kind, other than those mentioned…	Article 12, paragraph 2 and 3(b)

Status

In force	7 february 2014 — the Introduction states that 'the date of entry into force of the said Agreement and the Protocol is the 7th day of February, 2014, being the date of later of the notifications of completion of the procedures as required by the respective laws ... In accordance with paragraph 1 of article 29'. The Agreement and its Protocol were signed at malta on 8 april 2013 (testimonium of both instruments). Effect: Art. 29(3)(a) gives effect in India 'in respect of income derived in any fiscal year beginning on or after the first day of April next following the calendar year in which the Agreement enters into force', and the notification directs that it be given effect 'with effect from the 1ST day of april, 2015' — i.e. FY 2015-16 onwards in India. Art. 29(3)(b) gives effect in Malta for taxes on income derived during any calendar year or accounting period beginning on or after 1 January immediately following entry into force, i.e. From 1-1-2015. Critical transitional point: Art. 29(4) provides that 'The Agreement between the Republic of India and Malta for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed on 28TH september, 1994 shall terminate and cease to have effect from the date on which the provisions of this Agreement commence to have effect.' This is a replacement treaty, not an amendment. The 1994 Agreement — which is the one that made Malta a capital-gains conduit — governs periods up to and including FY 2014-15 in India; the 2013 Agreement governs from FY 2015-16. Anyone answering a Malta question for an older year must go to the 1994 text, which is not available here.
Given effect by	Notification no. 34/2014 [F. No. 504/06/2003-ftd-I], dated 5-8-2014 — issued under s.90 of the Income-tax Act 1961, directing that all the provisions of the Agreement and the protocol, as set out in the Annexure, be given effect to in the Union of India with effect from 1 April 2015. Note that the notification expressly covers the Protocol as well as the Agreement; the Protocol is not a separate instrument requiring its own notification. Art. 2 covers taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities.
Modified by the MLI	Yes — a synthesised text exists. Not dated on its face. It states that it 'was prepared in consultation with the competent authority of Malta and presents the shared understanding of the modifications made to the Agreement by the MLI', and records the MLI positions submitted on ratification by India on 25 june 2019 and by Malta on 18 december 2018, so it postdates 25-6-2019. MLI entry into force: 1 october 2019 for India, 1 april 2019 for Malta. Entry into effect — these are the dates that matter and Malta's are a full year earlier than Portugal's: in India, for taxes withheld at source where the event giving rise to the tax occurs on or after 1 april 2020, and for all other Indian taxes for taxable periods beginning on or after 1 april 2020; in Malta, for taxes withheld at source where the event occurs on or after 1 january 2020, and for all other Maltese taxes for taxable periods beginning on or after 1 january 2020.
Principal purpose test	Yes — MLI art. 7(1) — but the synthesised text is internally inconsistent about which paragraphs of article 27 IT replaces, and the inconsistency is exactly the hazard flagged for this batch. Two different answers appear on the same page. (i) the markup: paragraph 1 is printed normally; then the marker '[replaced by paragraph 1 of Article 7 of the MLI]' appears; then paragraphs 2 and 3 together are enclosed in a single square bracket as replaced text. On that rendering the PPT replaces paras 2 and 3, and para 1 survives. (ii) the prose: the sentence introducing the MLI box reads 'The following paragraph 1 of Article 7 of the MLI replaces paragraph 1 and 2 of Article 27 of this Agreement'. On that rendering the PPT replaces paras 1 and 2, and para 3 — the bare bona-fide-business-activities test — survives on its own. These cannot both be right. I take the markup as correct — paras 2 and 3 replaced, para 1 surviving — for two reasons grounded in the instruments rather than the typography. First, MLI Art. 7(1) applies 'in place of or in the absence of' provisions that deny A benefit where obtaining it was a principal purpose. Art. 27(2) is exactly such a provision. Art. 27(1) is not: it is a saving of domestic anti-evasion law, it denies nothing, and there is nothing in it for the PPT to displace. Second, Art. 27(3) is parasitic on Art. 27(2) — it says only that entities without bona fide business activities 'shall be covered by the provisions of this Article', which is meaningless once the operative denial rule in para 2 is gone. A reading that kills para 1 and leaves para 3 standing alone produces an orphaned, contentless test; a reading that kills paras 2 and 3 and leaves para 1 standing produces a coherent article. The practical difference is real and should be flagged to any user: on my reading, the surviving bilateral text is Art. 27(1) — domestic anti-evasion law, including Chapter X-A GAAR, is expressly preserved — plus the MLI PPT. On the alternative reading, a free-standing 'no bona fide business activities' test would remain in para 3 alongside the PPT, giving the revenue a second and vaguer denial ground. Either way the PPT applies, and either way Art. 27(1) or its equivalent leaves domestic GAAR untouched. Simplified LOB (MLI Art. 7(6)) was not adopted — no simplified-LOB text appears anywhere in the Synthesised Text. Effect dates: in India, source withholding where the event occurs on or after 1 april 2020, and other Indian taxes for taxable periods beginning on or after 1 april 2020.

Dividends

Rate	10 per cent of the gross amount of the dividends — but only for dividends paid by an indian company to A maltese resident. Art. 10(2)(a): 'if the dividends are paid by a company that is a resident of India to a resident of Malta who is the beneficial owner thereof, the tax charged by India shall not exceed 10 per cent of the gross amount of the dividends'.
The holding that unlocks it	There is no shareholding threshold and no second tier. This is unusual and worth stating expressly, because the reflex is to look for a 5%/25% split. There is one Indian-source rate — 10 per cent — available to any beneficial owner resident in Malta, individual or company, whatever the size of the holding and however long it has been held. The only condition is beneficial ownership. Because MLI Art. 8 (the 365-day holding requirement for dividend transfer transactions) was not applied to this treaty, there is no minimum holding period either.
Where this comes from	Article 10, paragraph 2(a)

The other direction is not A percentage at all, and a practitioner who assumes symmetry will get it wrong. Art. 10(2)(b) provides that where dividends are paid by a maltese company to an Indian beneficial owner, 'the tax charged by Malta on the gross amount of the dividends shall not exceed that malta tax chargeable on the profits out of which the dividends are paid'. That is a cap by reference to underlying corporate tax, not a rate. Protocol paragraph 1 explains why and must be read with IT: 'With reference to sub-paragraph (b) of paragraph 2 of Article 10, it is understood that, under the full imputation system adopted by malta, there is no withholding tax on dividends in addition to the tax chargeable in respect of the profits or income of the company out of which the dividends are paid.' So in practice Malta imposes no dividend withholding on outbound dividends to India. Art. 10(2) closes with the usual saving that it does not affect the taxation of the company on the profits out of which the dividends are paid. Art. 10(4) refers effectively-connected holdings to Art. 7 or Art. 14. Reconciliation: Art. 10 is word-for-word identical in the Comprehensive Agreement record and the Synthesised Text — verified by a normalised character-level comparison of the two renderings. No MLI box attaches to it.

Interest

Rate	10 per cent of the gross amount of the interest — Art. 11(2), a single flat ceiling, conditional on the beneficial owner of the interest being a resident of the other Contracting State. Identical in both records.
Exemptions	The exemptions sit in the article itself, at art. 11(3), not in the protocol — and Malta's version is one of the more precise ones in the Indian network because it names the institutions. The chapeau is 'Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, provided that IT is derived and beneficially owned by:' — note the double requirement, derived and beneficially owned; a nominee or collection agent does not qualify. Limb (a) — 'the Government, a political subdivision or a local authority of the other Contracting State'. Limb (b) — named institutions, and the list is closed: '(i) in the case of India, the reserve bank of india, the export-import bank of india, the national housing bank; and (ii) in the case of Malta, central bank of malta'. The central bank exemption is therefore express on both sides, and on the Indian side it extends beyond the central bank to two named development institutions. Note that this list does not include sidbi, nabard, iifcl or the lic, all of which appear in some other Indian treaties. Limb (c) — an extension mechanism: 'any other institution as may be agreed upon from time to time between the competent authorities of the Contracting States through exchange of letters'. Not self-executing; the sources used here reproduce no such exchange, so as the record stands only the four named institutions and the government limb operate. Penalty charges for late payment are excluded from the interest definition by the closing sentence of Art. 11(4), so they fall outside the article.
Where this comes from	Article 11, paragraph 2 and 3

Art. 11(6) contains a narrower-than-usual source rule: 'Interest shall be deemed to arise in a Contracting State when the payer is A resident of that state.' Unlike most Indian treaties it does not begin 'when the payer is that State itself, a political subdivision, a local authority or a resident of that State' — the government-payer limb is missing from the source rule, though it is present in the parallel royalty source rule at Art. 12(5)(a). The PE/fixed-base deeming override in the second sentence is standard. Reconciliation: Art. 11 is word-for-word identical in both records and carries no MLI box.

Royalties

Rate	10 per cent of the gross amount — Art. 12(2). Royalties and fees for technical services share one rate; there is no split, no lower tier for equipment royalties, no lower tier for copyright and no separate FTS rate. Conditional on beneficial ownership by a resident of the other Contracting State.
Where this comes from	Article 12, paragraph 2

Art. 12(3)(a) royalty definition is the standard wide Indian form: copyright of literary, artistic or scientific work including cinematograph films or films or tapes used for television or radio broadcasting (films are inside), patent, trade mark, design or model, plan, secret formula or process, use of or right to use industrial, commercial or scientific equipment, and information concerning industrial, commercial or scientific experience. The provision most likely to be missed is art. 12(5)(b), A second-limb source rule: where under sub-para (a) the royalties or FTS do not arise in either Contracting State, but the royalties relate to a right or property used, or the FTS relate to services performed, in one of the Contracting States, then they are deemed to arise in that state. This is a deliberate catch-all closing the gap that arises where a non-resident payer with no PE in either State pays for services performed in India, and it should be read alongside Explanation to s.9(1)(vii) of the Income-tax Act.

Fees for technical services

Rate	10 per cent of the gross amount — the same rate as royalties, under the same Art. 12(2).
Make-available requirement	No
Where this comes from	Article 12, paragraph 2 and 3(b)

There is an FTS article and IT has no make-available limb. Art. 12(3)(b) is short and wide: 'The term fees for technical services as used in this Article means payments of any kind, other than those mentioned in articles 14 and 15 of this agreement as consideration for managerial or technical or consultancy services, including the provision of services of technical or other personnel.' Three points a practitioner must take from it. First, there is no make-available condition — the words 'make available', 'enable', 'technical plan' and 'technical design' appear nowhere in Article 12, in the Protocol, or in the Synthesised Text. A Maltese service provider cannot argue that its services did not transmit technology; if the service is managerial, technical or consultancy in character, the fee is FTS and India may tax it at 10 per cent gross. Second, the definition expressly includes managerial services, which the US and UK treaties do not, so management fees, head-office charges characterised as management services, and secondment-type arrangements are squarely within it. Third, the only carve-out is the exclusion of payments 'mentioned in articles 14 and 15' — independent personal services and dependent personal services. There is no negative list of the US/Portugal kind: no exclusion for services ancillary to a sale of property, none for teaching, none for personal-use services, none for construction or natural-resources services. Because Art. 5(3)(b) also contains a 90-day service PE, technical services rendered in India by a Maltese enterprise are exposed on two independent fronts — 10 per cent gross under Art. 12 without any make-available filter, or net-basis PE taxation under Arts. 5 and 7 if the 90-day threshold is crossed; where a PE exists, Art. 12(4) refers the income to Art. 7. There is no MFN clause to import A make-available test from A later treaty (see practitioner_notes), so the absence is permanent unless the treaty is renegotiated. Reconciliation: Art. 12 is substantively identical in both records; a word-level comparison found only three ocr-level differences in the Comprehensive rendering ('permanent,' for 'permanent', 'resident-of' for 'resident of', 'thepermanent' for 'the permanent'). No MLI box attaches to Article 12.

Capital gains on shares

Treatment	Full source-state taxing right over share gains, and the MLI has not cut IT down. Art. 13(4) is one sentence: 'Gains from the alienation of shares in A company which is A resident of A contracting state may be taxed in that state.' There is no property-rich condition, no percentage test, no minimum holding, no listing carve-out and no de minimis. India may tax a Maltese resident's gain on shares of any Indian company. This is the 2013 treaty deliberately closing the conduit that the superseded 1994 Agreement had left open, and it did so from FY 2015-16 — two years before the Mauritius, Singapore and Cyprus protocols of 2016-17. Only gains falling outside paras 1 to 4 go to the residual Art. 13(5) (residence-only). The MLI adds to this right, IT does not subtract from IT. The Synthesised Text introduces MLI Art. 9(4) with the words 'The following paragraph 4 of Article 9 of the MLI applies to article 13 of this Agreement' — and, decisively, article 13(4) is reproduced in full and is not struck through. Compare Portugal in this same batch, where the identical MLI provision was introduced as 'replaces paragraph 4 of Article 13' and the existing paragraph was shown bracketed and struck out. The difference in the introductory formula is not cosmetic: in Malta the MLI supplies an additional basis for source taxation (shares or comparable interests, including partnership and trust interests, deriving more than 50 per cent of value from immovable property at any time in the preceding 365 days), sitting alongside the unrestricted Art. 13(4). Both records agree on art. 13(4) itself; the Synthesised Text simply adds the MLI box.
Grandfathering	None in the treaty. There is no grandfathering clause, no shares-acquired-before date, no transition-period rate and no limitation-of-benefits gateway attached to Art. 13 — nothing resembling the Mauritius/Singapore/Cyprus architecture. The only date that matters is the treaty-change date: alienations by a Maltese resident in Indian fiscal years up to and including FY 2014-15 fall under the superseded 1994 Agreement (terminated by Art. 29(4)); alienations from FY 2015-16 onwards fall under Art. 13(4) of the 2013 Agreement and are taxable in India.
Conditions	Art. 13(4) itself is unconditional. The MLI-added rule carries three conditions: shares or comparable interests (expressly including interests in a partnership or trust); more than 50 per cent of value derived directly or indirectly from immovable property; and a 365-day look-back, the test being met if satisfied at any time in the 365 days preceding the alienation. In Malta's case the MLI rule is of limited practical importance to India precisely because Art. 13(4) already reaches every share; it matters mainly for comparable interests — partnership and trust interests — which Art. 13(4) does not cover and which would otherwise have fallen into the residual Art. 13(5).
Where this comes from	Article 13, paragraph 4 (with MLI Art. 9(4) applied additionally to Article 13) and 5

Permanent establishment

Construction or installation PE	More than six months — Art. 5(3)(a): 'A building site or construction, installation or assembly project or supervisory activities in connection therewith constitutes a permanent establishment only if such site, project or activities last more than six months.' Installation, assembly and supervisory activity are all inside the six-month test. MLI Art. 14 (splitting-up of contracts) was not applied, so there is no anti-splitting aggregation rule and separate contracts are tested separately on their own facts.
Service PE	Yes — more than 90 days within any 12-month period. Art. 5(3)(b): 'The furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose constitutes a permanent establishment, but only where activities of that nature continue (for the same or connected project) within a Contracting State for a period or periods aggregating more than 90 days within any 12-month period.' Every element of that sentence is load-bearing: the personnel must be engaged by the enterprise for that purpose; the aggregation is limited to the same or connected project, so unconnected engagements are not added together; the measuring window is any 12-month period, not the fiscal year, so a rolling test applies; and the threshold is more than 90 days, so exactly 90 days does not create a PE. Ninety days is at the aggressive end of the indian network — compare 183 days in many treaties and 90 days in the US and UK treaties, but note that unlike those treaties Malta's Art. 12 has no make-available limb, so both the service PE and the FTS article bite at once.
Agency PE	Yes — Art. 5(5), a three-limb dependent-agent rule, and limb (c) is wider than the OECD model: (a) has and habitually exercises an authority to conclude contracts in the name of the enterprise, unless the person's activities are limited to those in para 4; (b) has no such authority but habitually maintains a stock of goods from which he regularly delivers on behalf of the enterprise; or (c) habitually secures orders in the first-mentioned state, wholly or almost wholly for the enterprise itself. Limb (c) catches an order-securing agent who never concludes a contract and holds no stock. Art. 5(7) is the independent-agent exclusion with the anti-exclusivity rider: 'when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status' — and, unlike the Philippines treaty, there is no additional requirement to show non-arm's-length dealing. Exclusivity alone defeats independence here. Art. 5(6) is a separate insurance PE (premiums collected or risks insured in the other State through a person other than an independent agent, except re-insurance). MLI Art. 12 was not applied, so the commissionnaire rule does not apply and Art. 5(5)(a) keeps its 'in the name of the enterprise' formulation.
Where this comes from	Article 5

Art. 5(2) includes two inclusive limbs beyond the usual list: '(g) A farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on' and '(h) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources including an offshore drilling site'. Neither carries a duration test — an offshore drilling site is a PE from day one, which is a materially harder rule than Portugal's 120-day test for natural-resources installations. Art. 5(4) exclusions are in the pre-beps unconditional form and, importantly, limbs (a) and (b) say 'storage, display or occasional delivery' — the word occasional narrows the delivery exclusion, so a regular delivery function is not excluded. MLI Art. 13 was not applied to this treaty, so there is no anti-fragmentation overlay on Art. 5(4) and no 'closely related enterprise' concept. Reconciliation: Art. 5 is substantively identical in both records; a word-level comparison found only two ocr artefacts in the Comprehensive rendering ('first-mentioned f State' for 'first-mentioned State', 'permanent establishment 01 otherwise' for 'or otherwise').

Anti-abuse: limitation of benefits, and the MLI

LOB	Yes — article 27, headed 'limitation of benefits', in the short Indian style rather than the American objective-tests style. As notified in 2014 it had three paragraphs: '1. Nothing in this Agreement shall affect the application of the domestic provisions to prevent tax evasion. 2. Benefits of this Agreement shall not be available to a resident of a Contracting State, or with respect to any transaction undertaken by such a resident, if the main purpose or one of the main purposes of the creation or existence of such a resident or of the transaction undertaken by him, was to obtain benefits under this Agreement that would not otherwise be available. 3. The case of legal entities not having bona fide business activities shall be covered by the provisions of this article.' There are no objective safe harbours — no listed-company test, no ownership-and-base-erosion test, no active-trade-or-business test, no expenditure gateway. Paragraph 3 is a bare substance test with no defined content.
PPT	Yes — MLI art. 7(1) — but the synthesised text is internally inconsistent about which paragraphs of article 27 IT replaces, and the inconsistency is exactly the hazard flagged for this batch. Two different answers appear on the same page. (i) the markup: paragraph 1 is printed normally; then the marker '[replaced by paragraph 1 of Article 7 of the MLI]' appears; then paragraphs 2 and 3 together are enclosed in a single square bracket as replaced text. On that rendering the PPT replaces paras 2 and 3, and para 1 survives. (ii) the prose: the sentence introducing the MLI box reads 'The following paragraph 1 of Article 7 of the MLI replaces paragraph 1 and 2 of Article 27 of this Agreement'. On that rendering the PPT replaces paras 1 and 2, and para 3 — the bare bona-fide-business-activities test — survives on its own. These cannot both be right. I take the markup as correct — paras 2 and 3 replaced, para 1 surviving — for two reasons grounded in the instruments rather than the typography. First, MLI Art. 7(1) applies 'in place of or in the absence of' provisions that deny A benefit where obtaining it was a principal purpose. Art. 27(2) is exactly such a provision. Art. 27(1) is not: it is a saving of domestic anti-evasion law, it denies nothing, and there is nothing in it for the PPT to displace. Second, Art. 27(3) is parasitic on Art. 27(2) — it says only that entities without bona fide business activities 'shall be covered by the provisions of this Article', which is meaningless once the operative denial rule in para 2 is gone. A reading that kills para 1 and leaves para 3 standing alone produces an orphaned, contentless test; a reading that kills paras 2 and 3 and leaves para 1 standing produces a coherent article. The practical difference is real and should be flagged to any user: on my reading, the surviving bilateral text is Art. 27(1) — domestic anti-evasion law, including Chapter X-A GAAR, is expressly preserved — plus the MLI PPT. On the alternative reading, a free-standing 'no bona fide business activities' test would remain in para 3 alongside the PPT, giving the revenue a second and vaguer denial ground. Either way the PPT applies, and either way Art. 27(1) or its equivalent leaves domestic GAAR untouched. Simplified LOB (MLI Art. 7(6)) was not adopted — no simplified-LOB text appears anywhere in the Synthesised Text. Effect dates: in India, source withholding where the event occurs on or after 1 april 2020, and other Indian taxes for taxable periods beginning on or after 1 april 2020.
Subject to tax	Not as A general condition, but protocol paragraph 2 is A targeted subject-to-tax exclusion that disapplies most of the treaty, and IT is the single most overlooked provision in this instrument. It provides that 'the provisions of articles 6 to 22 of the agreement shall not apply to: (a) any person enjoying a special fiscal treatment under the provisions of the malta merchant shipping act, 1973 to the extent that IT is not subject to tax on the profits derived from the operation of ships in international traffic; or (b) any company licensed under the malta freeport act of 1989 to the extent that IT is not subject to tax on its profits as a result of such license; or (c) any person that enjoys a special fiscal treatment under any law similar to those referred to in (a) or (b) above, enacted in malta after the signature of this agreement.' Three things to note. It removes the whole of the distributive rules — Articles 6 to 22, which is business profits, shipping, dividends, interest, royalties and FTS, capital gains and everything else — not merely a rate. It is expressly a to-the-extent-not-subject-to-tax test, so partial taxation gives partial protection. And limb (c) is forward-looking: it catches Maltese special-regime legislation enacted after 8 April 2013, so the exclusion cannot be defeated by re-enacting the regime under a new name.
Where this comes from	Article 27 (as modified by MLI Art. 7(1)); Protocol para 2 for the Maltese special-regime exclusion

Only three MLI provisions are inserted — this is a light MLI overlay compared with Portugal's five. (1) MLI art. 6(1) — the anti-treaty-shopping preamble is added. (2) MLI art. 9(4) — the 365-day / more-than-50-per-cent immovable-property share-gains rule. Note carefully that IT is introduced as 'The following paragraph 4 of Article 9 of the MLI applies to article 13 of this Agreement' — applies to, not 'replaces paragraph 4 of article 13'. Article 13(4) of the Agreement is not struck through in the Synthesised Text and remains in full force. So unlike Portugal, where MLI Art. 9(4) replaced the existing paragraph and thereby destroyed a source-State taxing right, here MLI Art. 9(4) is purely additive and takes away nothing. (3) MLI art. 7(1) — the principal purposes test, inserted into Article 27; see anti_abuse for a rendering conflict that must be flagged. What the MLI did not do: MLI Art. 11 (saving clause) is not applied; MLI Art. 12 (commissionnaire) is not applied; MLI Art. 13 (specific activity exemptions / anti-fragmentation) is not applied, so Art. 5(4) keeps its unconditional pre-beps exclusions with no anti-fragmentation overlay; MLI Art. 14 (splitting-up of contracts) is not applied; MLI Art. 15 (closely related persons) is not applied; MLI Art. 8 (dividend transfer transactions) is not applied. The service PE, the 6-month construction PE and all three rate articles are untouched.

The protocols, in order

A treaty read without its protocols is a wrong answer.

None. There is not a single amending notification and not one amendment marker anywhere in the Comprehensive Agreement, across the whole instrument. The citation line carries one notification and one date. Contrast this with treaties such as Portugal (two markers, three subsequent notifications) or the older Philippines text: Malta's Comprehensive record is the text exactly as notified in 2014 and has never been amended bilaterally.
The protocol is not a separate amending instrument. It was signed on the same day as the Agreement (8 April 2013), states that 'the following shall form an integral part of the Agreement', and was notified together with the Agreement by Notification No. 34/2014. It was opened and read separately, as required; its three paragraphs are set out in practitioner_notes.
The MLI does modify this treaty. See synthesised_text — and note that the MLI is the only thing that has changed this treaty since 2014.

The words themselves

Quoted from the treaty as notified.

The furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose constitutes a permanent establishment, but only where activities of that nature continue (for the same or connected project) within a Contracting State for a period or periods aggregating more than 90 days within any 12-month period.

Article 5, paragraph 3(b) of the treaty as notified.

The term "fees for technical services" as used in this Article means payments of any kind, other than those mentioned in Articles 14 and 15 of this Agreement as consideration for managerial or technical or consultancy services, including the provision of services of technical or other personnel.

Article 12, paragraph 3(b) of the treaty as notified.

Gains from the alienation of shares in a company which is a resident of a Contracting State may be taxed in that State.

Article 13, paragraph 4 of the treaty as notified.

(b) (i) in the case of India, the Reserve Bank of India, the Export-Import Bank of India, the National Housing Bank; and (ii) in the case of Malta, Central Bank of Malta

Article 11, paragraph 3(b) of the treaty as notified.

if the dividends are paid by a company that is a resident of Malta to a resident of India who is the beneficial owner thereof, the tax charged by Malta on the gross amount of the dividends shall not exceed that Malta tax chargeable on the profits out of which the dividends are paid.

Article 10, paragraph 2(b) of the treaty as notified.

The case of legal entities not having bona fide business activities shall be covered by the provisions of this Article.

Article 27, paragraph 3 — shown as REPLACED by the MLI in the Synthesised Text's markup, but left standing on the reading suggested by that document's own introductory sentence; see anti_abuse of the treaty as notified.

The Agreement between the Republic of India and Malta for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed on 28th September, 1994 shall terminate and cease to have effect from the date on which the provisions of this Agreement commence to have effect.

Article 29, paragraph 4 of the treaty as notified.

What to watch

Reconciliation of the two records. Both were read end to end and compared article by article by normalised text comparison. The comprehensive agreement record carries zero amendment markers — the treaty has never been amended bilaterally since notification in 2014. The synthesised text reproduces the same Agreement plus three MLI boxes. On Articles 10 and 11 the two records are character-for-character identical. On Articles 5 and 12 the only differences are ocr artefacts in the Comprehensive rendering ('first-mentioned f State', 'permanent establishment 01 otherwise', 'permanent,', 'resident-of', 'thepermanent') — no substantive divergence. On Article 13 both records carry the same paragraph 4; the Synthesised Text adds the MLI Art. 9(4) box without striking anything out. The only place the records diverge is article 27, and there the divergence is internal to the Synthesised Text itself rather than between the two records: see anti_abuse. There is therefore no Poland-type or Belgium-type trap in Malta — neither record is stale relative to the other on any rate, definition or article.
No most-favoured-nation clause. A full-text search of the Comprehensive record and the Synthesised Text returned no hit for 'most favoured', 'most-favoured', 'third State' or 'OECD' anywhere in the Agreement, the Protocol or the Synthesised Text. There is no MFN on dividends, interest, royalties, FTS or capital gains; nothing is tied to a later Indian treaty; nothing covers scope; and consequently no notification has ever been or could be issued under such a clause. This matters more here than in most treaties, because the obvious taxpayer argument on Malta FTS is to import a make-available limb from a treaty that has one. There is no clause on which to found that argument. The 10 per cent rate is already at India's usual floor, so the absence costs nothing on rate — it costs the taxpayer the scope argument.
The protocol has three paragraphs and all three are operative. Para 1 explains the Art. 10(2)(b) dividend cap by reference to Malta's full imputation system (no Maltese dividend withholding). Para 2 is the Merchant Shipping Act / Freeport Act exclusion disapplying Articles 6 to 22 (see anti_abuse — this is the sleeper). Para 3 records that at the date of signature Maltese law permitted assistance in collection of taxes only to EU member States, and provides that if Maltese law changes or Malta extends such assistance to a non-EU country, Malta 'shall forthwith inform the Indian competent authority' and the competent authorities 'shall by mutual agreement settle the mode of extending assistance in collection of taxes to each other'. This is an MFN-shaped clause — a most-favoured-nation trigger — but IT is about collection assistance, not about rates or scope, and it obliges the parties only to inform and to settle a mode by mutual agreement. It confers no self-executing benefit on any taxpayer and no notification has been issued under it. Note also that this treaty has no collection-assistance article at all — Art. 27 is Limitation of Benefits, and the article that in many treaties would be assistance in collection is simply absent, which is why Protocol para 3 was needed.
Article 22 (other income) has A gambling limb that is easy to miss. Para 1 is the residence-only rule; para 2 is the PE/fixed-base carve-out; but para 3 provides that 'Notwithstanding the provisions of paragraph 1, if a resident of a Contracting State derives income from sources within the other Contracting State in the form of lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever, such income may be taxed in the other contracting state.' Given Malta's position as a licensing hub for online gaming, this is a live provision, not boilerplate: winnings and comparable receipts sourced in India retain full Indian source taxation notwithstanding the otherwise residence-only Other Income article.
Malta is now A poor holding jurisdiction for indian shares and A poor service-fee jurisdiction, which is the opposite of its pre-2015 reputation. Art. 13(4) gives India an unrestricted right to tax share gains; Art. 12 taxes managerial, technical and consultancy fees at 10 per cent gross with no make-available filter; Art. 5(3)(b) creates a service PE at 90 days; and Protocol para 2 strips the distributive rules entirely from Maltese special-regime entities. What Malta still offers is the 10 per cent dividend rate with no shareholding threshold and no holding period, and the absence of any Maltese dividend withholding under the full imputation system. Against that, the MLI PPT applies from 1 April 2020 and Art. 27(1) preserves Indian domestic GAAR.
Two date traps. First, the treaty in force for Indian fiscal years up to FY 2014-15 is the 1994 Agreement, terminated by Art. 29(4) — the 2013 Agreement's Art. 13(4) cannot be applied to an earlier year, and the 1994 text is not available here. Second, the MLI effect date in India is 1 april 2020 for both withholding and other taxes — a year earlier than Portugal's 1 April 2021 — so the PPT has applied to Indian-source payments to Maltese residents since FY 2020-21.

What this page does not tell you. The 1994 India-Malta Agreement, terminated by Art. 29(4), is not available in the sources used here; only the 2013 Comprehensive Agreement and the Synthesised Text are. Any question about a Maltese resident's Indian tax position for FY 2014-15 or earlier cannot be answered from this record. The internal conflict in the Synthesised Text over which paragraphs of Article 27 the PPT replaces (markup says paras 2 and 3; introductory prose says paras 1 and 2) cannot be resolved from the sources used here. The definitive answer lies in the MLI notifications made by India on 25-6-2019 and by Malta on 18-12-2018, which are on the OECD Depositary webpage and were not consulted for this record. My reading is reasoned from the text of MLI Art. 7(1) and of Art. 27 itself, not taken from a source. The Gazette S.O./G.S.R. Number for Notification No. 34/2014 of 5-8-2014 is not given — only the notification number and file number are available. Art. 11(3)(c) contemplates further exempt institutions agreed 'from time to time ... Through exchange of letters'. Whether any such letters have been exchanged since 2014, and which institutions they name, is not established from the sources used here. The Synthesised Text is undated on its face; only that it postdates India's ratification deposit of 25-6-2019. Protocol para 2(c) extends the special-regime exclusion to laws 'similar to' the Merchant Shipping Act 1973 and the Freeport Act 1989 enacted after 8-4-2013. Which Maltese enactments fall within that description — the Highly Qualified Persons Rules, the tonnage tax regime as re-enacted, and so on — is a question of Maltese law that this record does not and cannot answer.

The India–Malta tax treaty