Benefits paid before January 1997 to alien beneficiaries residing in Malta were exempt
from the nonresident alien withholding tax under the provisions of an income tax treaty
between the United States and Malta.
The tax treaty was terminated effective January 1, 1997 as the result of action by
the governments of the United States and Malta.
Monthly benefits paid on or after January 1, 1997 to nonresident alien beneficiaries
living in Malta are not exempt from tax withholding.
At the end of November 1996, the nonresident alien beneficiaries living in Malta were
notified of the termination of the tax treaty and its effect on their benefits.
The change in the tax withholding rate (from zero to 25.5 percent) appeared in the
January 3, 1997 payment.