Malta should brace itself for tax haven clampdown – AD
Greens say Malta should start thinking of Plan B on its attractive tax regime for foreign companies as pressure from major EU states on European Commission grows
Malta should be prepared to diversify its current fiscal policy and even wave goodbye to its incentives to attract foreign industry, Alternattiva Demokratika said today after three EU member states complained to the European Commission to take action against “illegal state aid”.
Germany, France and Italy are pressing the European Union to tighten restrictions on tax havens, urging that some measures be proposed by the end of this year and concrete rules adopted by the end of 2015.
A joint letter from the finance ministers of the three leading EU countries to Commissioner Pierre Moscovici argues that new measures should ensure greater transparency and hinder companies from gaming Europe’s divergent tax laws.
They said the EC should rein in “aggressive tax planning” and “profit shifting” by companies, more disclosure requirements and better coordination between European states.
“Since certain tax practices of countries and taxpayers have become public recently, the limits of permissible tax competition between member states have shifted. This development is irreversible,” Germany’s Wolfgang Schäuble, France’s Michel Sapin and Italy’s Pier Carlo Padoan wrote.
“In view of the request for Juncker to take strong measures by December 2015 against unfair competition in the EU, which is deemed by many to constitute illegal state aid, is the Maltese government prepared to diversify from the present fiscal policies in Malta?” asked Alternattiva Demokratika chairperson Arnold Cassola.
“The fiscal incentives given by the Maltese government to certain foreign investors in our country, as, for example, in the i-gaming industry, may eventually be declared as an unacceptable form of state aid by the EU. What Plan B does the Maltese government have if the EU requests the Maltese government to withdraw all preferential treatment both to certain sectors of the economy and to individual companies?”
Juncker came under pressure last month after the release of confidential documents highlighting Luxembourg’s generous tax breaks to multinational corporations during his time as the country’s prime minister. He played down his role in shaping the rules that helped make Luxembourg a corporate tax haven, arguing that the country’s tax authority operates independently.
The Commission intends to present its own proposals on enhanced automatic exchange of tax information in the first quarter of 2015.