TN 12 (09-98)
GN 05010.164 Tax Treaty With Malta
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.
The termination of the tax treaty exemption is effective for benefits paid on or after January 1,1997, for months after November 1983.