Presseschau: Ding ding, seconds out on Malta’s fight to stop Brussels’s tax plans

23. Februar 2016

MALTA TODAY (Malta)

Ding ding, seconds out on Malta’s fight to stop Brussels’s tax plans, by Matthew Vella

Malta has always insisted it is no tax haven, but it employs a system which allows foreign shareholders to claim a six-sevenths’ refund on their taxed dividends, taxed at the maximum 35%.

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>>>But another MEP, German Fabio De Masi of the Left Party, has expressed doubts on the effectiveness of the Commission’s proposals because rules on controlled foreign corporations (CFCs) are basically confined to non-EU countries.

“Rather, they will make it more attractive for companies to relocate headquarters to member states with very low effective tax rates. With the proposed 40% threshold, companies enjoying a 5% effective tax rate in Malta could control subsidiaries elsewhere being taxed as little as 2% without the rules kicking in. There are similar concerns about other elements of the package.”

It is internationally recognised that tax ‘planning’ allows multinationals to literally wipe out tax that would have been paid in the country where their profits are made, which is why Malta hosts thousands of foreign companies. One example from the past was Commonwealth Bank of Australia, whose profits were channelled back to Malta where it held a small office of five employees. 

“Such levels of tax competition are extremely harmful and they divert much needed funds from public coffers,” Demasi told MaltaToday. “I recognise the danger of strong and large member states imposing their will and preferences on smaller ones if tax policies were entirely harmonised, but an EU which permits the levels of tax avoidance that we currently see is and will increasingly fail in the eyes of citizens that are paying their fair share.”

The full text article is to be found on the webpage of Malta Today.