Sunday

16th Jun 2019

Malta rejects tax haven accusations

  • There were "lots of untruths" in the Green report, Scicluna said (Photo: Alan Cleaver)

The Maltese finance minister rejected accusations that his country was a tax haven on Thursday (12 January), saying it had "nothing to hide".



Speaking to journalists in Valletta, Edward Scicluna dismissed a report published the day before by the Green group in the European Parliament as "very unprofessional" and "very unfair".

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"There were lots of untruths" in the report, he said, adding that international organisations, including the OECD, a developped-country club, did not consider Malta as a tax haven.

He said that Malta had low taxes but was not hosting mailboxes for cheating companies or a place with "[illicit] money going through".

"We don't hide about having competitive taxation, there is nothing wrong with that," he added, saying that the tax system was inherited from the UK when Malta was still a British colony.


He admitted that Malta was against tax harmonisation in the EU but insisted that it was "against international companies playing regimes against each other" to pay less taxes.

A tax haven, the minister said, was a combination of complete secrecy, zero or very low taxes, corruption, and hidden terrorist money.

"One should distinguish between the three," he said. "Sometimes they go together, sometimes they do not. Those very strict on transparency and exchange of information, or on money laundering, should not be branded as tax haven."

The Green report said that due to tax refunds to resident and non-resident shareholders, the displayed 35 percent income tax rate was in fact "reduced the effective tax rate to just 5 percent for trading companies".

"What you see is not what you get," Scicluna said, insisting that the refunds are taxed in the country of origin of the shareholders or companies.

He added that "some countries have a lot of hidden reductions", including tax rulings which Malta did not have.

The Greens' accusations come as Malta takes over the six-month presidency of the EU Council, with minister Scicluna chairing meetings on tax discussions.

"Expectations from European citizens to deliver in the fight against tax evasion and avoidance, as well as money laundering, are high, given scandals in the past few years," the Greens' report notes.

"Is Malta best placed to achieve this?" it asks.

In recent years and months, Malta has shown a "repeated lack of ambition for tax reforms from" which the report says is "especially worrying" now that it holds the EU presidency.

Tax dossier

In its presidency programme, Malta vows to carry forward work on a number of ongoing taxation files," including the amendment to the anti-tax avoidance directive (Atad) and the re-launch of the common consolidated corporate tax case (CCCTB) - a common tax rule to calculate business tax across the EU.

Malta is supporting Atad's revision but is opposed to CCCTB. It is also resisting the country by country reporting - a rule to oblige multinational to release information on their business in every counry where they have activities.

Scicluna, with several other finance ministers, does not want reporting to be made public, and wants it to apply globally and not only in the EU.

Otherwise "we'll lose our competitiveness," he said.

He said that Malta "woud opt for an exchange of information between tax authorities and for them to be as transparent as possible about what they're doing about it".

Focus

The heated life of Malta's politics

While the smallest EU state has been commended in Brussels for its smooth presidency of the Council, domestic politics are characterised by heated polarisation with accusations and insults often being traded.

News in Brief

  1. EU plans to restructure eurozone bonds
  2. EU ups US imports in beef deal
  3. Unicef: UK among 'least family-friendly' in Europe
  4. Czech PM: No joint 'V4' candidate in commission race
  5. Johnson tops first round to replace May, three eliminated
  6. Bratislava will host new European Labour Authority
  7. Juncker cautions against further climate goals
  8. Study: Counterfeit medicine is a 'growing threat' in EU

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Nordic Council of MinistersNo evidence that social media are harmful to young people
  2. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  3. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  4. Nordic Council of MinistersEducation gets refugees into work
  5. Counter BalanceSign the petition to help reform the EU’s Bank
  6. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  7. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  8. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  9. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  10. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  11. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  12. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody

Latest News

  1. 'Russian sources' targeted EU elections with disinformation
  2. Top EU jobs summit dominates This WEEK
  3. EP parties planning 'coalition agenda' ahead of jobs summit
  4. MEP blasts Portugal over football whistleblower
  5. Catalonia MEPs are a judicial, not political, issue
  6. Meet the lawyer taking the EU migration policy to the ICC
  7. Europe's oil supplies 'at risk' after tanker attacks
  8. EU paths fork for Albania and North Macedonia

Join EUobserver

Support quality EU news

Join us