Minister Donohoe welcomes agreement between Revenue Commissioners & Maltese tax authority to prevent ‘Single Malt’ structure

27th November, 2018

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, today (Tuesday) welcomed the publication by the Revenue Commissioners of a Competent Authority Agreement that has been reached with the Maltese authorities. 

The Competent Authority Agreement outlines the shared understanding of the authorities in Ireland and Malta that the BEPS Multilateral Convention on Tax Treaties will, once it is in effect in both jurisdictions, make clear that it is not the purpose of the bilateral Ireland-Malta Tax Treaty to enable an aggressive tax planning structure referred to as the ‘Single Malt’. This Agreement will ensure that the Treaty does not enable that aggressive structure.  

Commenting on the Agreement, Minister Donohoe said: ‘While I am confident that US tax reform has already significantly reduced the concerns around the Single Malt structure, I had asked officials to examine any further bilateral action that may be needed.  I am pleased that this agreement has been reached which should eliminate any remaining concerns about such structures. This is another sign of Ireland’s commitment to tackling aggressive tax planning, as set out in Ireland’s Corporation Tax Roadmap’.

The Competent Authority Agreement will be effective as soon as the BEPS Multilateral Convention is in effect for both Ireland and Malta.  Ireland is taking the last legislative steps to ratify this Convention in the Finance Bill 2018 and intends to deposit the final documents with the OECD in early January. 

Ireland remains committed to tax reform implemented at the international level, to address mismatches between jurisdictions and to continue the implementation of new robust global standards that are sustainable in the long run.



Notes for Editors

Concerns have been raised about an aggressive tax planning structure which may have involved some multinationals using a company incorporated in Ireland but tax-resident in Malta.  While US tax reforms introduced at the end of 2017 should have substantially reduced the benefits of operating this type of structure, Minister Donohoe asked officials to investigate what action was needed domestically or bilaterally to resolve any remaining concerns.

Discussions with Malta have been ongoing and have now resulted in a Competent Authority Agreement being reached.  A Competent Authority Agreement is an agreement between the tax authorities in two countries on the interpretation or application of a tax treaty between those countries, which is a treaty intended to avoid double taxation arising. Typically, the Mutual Agreement Procedure Article of such a bilateral tax treaty facilitates entering into this type of agreement.