Thursday

19th Oct 2017

Malta chairs 'awkward' EU talks on tax dodging

  • "All tax regimes can be tweaked … including Malta's," said finance minister Edward Scicluna. (Photo: coun)

Malta has again rejected accusations that it was a tax haven, a few days after the publication of the so-called Malta Files, which shed light on its sweetheart tax deals for companies and individuals.

Maltese finance minister Edward Scicluna told journalists in Brussels on Tuesday (23 May) that "there are no offshore companies in the EU".

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He said that revelations by the European Investigative Collaborations (EIC), a network of European media, were "just a combination of stories that tried to damage [Malta's] reputation".

The minister, who said last Sunday that the Malta Files were "fake news", said on Tuesday that they contained nothing new because "you don't leak public data which is freely available online".

He did not say whether his allegation of “fake news" referred to the contents of the files published or to the subsequent comments that Malta was a tax haven.

Scicluna spoke after having chaired a meeting of EU finance ministers that dealt mainly with tax issues in Malta’s role as the current EU presidency.

"It's not by lynching in public and making quite exciting stories" that the EU will fight tax evasion, he said.

"All member states expressed the wish to continue fighting tax avoidance and tax evasion," he added.

"You do that by serious work, legislative work, and cooperation," he said.

He also stressed his government's commitment to making progress on EU-level laws to end tax avoidance by companies and individuals.

Tuesday’s meetings saw a discussion on a common corporate tax base (CCTB), a scheme to harmonise rules for taxing corporate profits in the EU.

Most countries, including Germany, Luxembourg, and Ireland said they were wary of the scheme as it would reduce the attractiveness of their tax systems.

The delay on a CCTB deal is holding back discussions on another scheme, known as the common consolidated corporate tax base (CCCTB).

Many believe that the CCCTB, a single EU rule on how to calculate companies' taxable income, would close the tax loopholes used by countries, such as Malta, Luxembourg, or Ireland, to attract companies and wealthy individuals.

'Closing our eyes'

Ministers were at a "very early stage of a very laborious file," Scicluna said, lowering the expectations for a quick agreement on the CCTB issue.

Some diplomats admitted that holding the discussion - while under the Maltese presidency of the Council of the EU - was "awkward".

"It's a compromise too far," a source from one member state told EUobserver, alluding to the Malta Files revelations.

"We close our eyes to too many things", in order to keep up appearances, the source said.

Scicluna told journalists that "any practitioner would use any tax regime to minimise taxation. That's a fact".

But he said his country was "ready" to change its tax policies if need be.

"All tax regimes can be tweaked … including Malta's," he said. "As long as it is a concerted effort across the EU, we'll move slowly, but surely".

EU monitoring Cyprus passport sales

The European Commission has said it is in a "dialogue" with Cyprus amid concerns on loopholes in its passport sale scheme.

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