Malta gets ‘reassurance’ on imputation system in EU anti-tax avoidance talks

Malta will accept the latest version of an EU anti-tax avoidance directive following several amendments to the text addressing Malta’s concerns.

Finance minister Edward Scicluna said the new proposal comes after several months of intensive negotiations in which Malta insisted on safeguarding its general system of taxation and the competitiveness of its financial services sector.

“The full imputation tax system is Malta’s general system of taxation, affecting all taxpayers, whether individuals, pensioners or corporate, the design of which has been in place since the very beginning in our country. We have sought and obtained the reassurance we needed in this regard,” Scicluna said in the margins of ECOFIN.

The full imputation system allows certain foreign shareholders to claim up to 85% in refunds on Maltese tax.

Scicluna said the European Commission and the Dutch Presidency of the Council of the EU, “understood our particular concerns, while at the same time recognised that Malta was fully committed to finding a solution once these were addressed.”

Pending any objection being raised during a brief silence procedure, the agreement by Malta and several other like-minded member states will ensure a minimum set of EU rules to fight tax avoidance.

At the same time, the  directive’s latest text notes that measures intended to tackle so called “hybrid mismatches” contained within the directive are not intended to affect the general features of the tax system of member states. 

Scicluna also attended the European Stability Mechanism (ESM) Annual Board of Governors meeting, as well as a meeting of the Eurogroup.