Malta fights against Tax Haven label
"Offshore", "tax haven" and more recently "Panama in the EU" are labels that Malta has done its best to shake off.
The Institute of Financial Services Practitioners (IFSP) said on Thursday that the a series of “sensationalist” media reports in parts of the international tabloid press, referred to as the “Malta Files” contain several inaccuracies and false statements.
“Maltese financial services practitioners operate within a legal and regulatory framework of the highest standards. Malta is a full member of the European Union and all its laws, including anti-money laundering rules, are fully aligned with European rules and best practice.
Whilst taxation policy remains a matter for each Member State to determine in the exercise of its sovereignty, Malta has pro-actively ensured that its tax rules continue to be compliant with applicable EU legal principles. Its laws apply transparently to all Maltese incorporated companies, irrespective of who their shareholders are. Consequently, referring to Malta as an “offshore jurisdiction” or a “tax haven” is entirely baseless and purely sensationalist,” the IFSP said.
Furthermore much of the information released in the "Malta Files" was readily available through the Registry of Companies' online portal, they added.
Malta operates a full imputation tax system, with companies taxed at a standard 35% rate but shareholders' dividends subject to an 85% rebate on tax paid, effectively bringing the payable tax rate down to 5%.
Maltese governments have stridently defended this system throughout the years, insisting that fiscal sovereignty is the remit of individual member states and that Malta, like many other EU member states, is within its rights to operate a competitive tax system.
Last week, Ecofin finance ministers have endorsed the European Commission’s proposal, according to the Berlaymont chief spokesperson, Margaritis Schinas. He was referring to the Common Corporate Tax Base (CCTB) that was approved by the EU Council on May 23.
The approval of the new system for resolving double taxation disputes between EU member states will improve the mechanisms used when disputes over the interpretation of European agreements on the elimination of double taxation are being created.
Several member states, including Germany, Luxembourg, and Ireland do not entirely favour the new system since their “attractive” tax systems will now need to change status.
“This is an important directive,” said Ecofin president and Malta’s Minister of State Edward Scicluna. “Part of our plan to strengthen fiscal certainty and the environment for businesses in Europe.”
Malta currently holds the presidency of the European Union, so the allegations are all the more sensitive. And they come at the tail end of a bitter election campaign that has seen the island's Labour government fending off serious claims of corruption, ahead of a vote on 3 June.