Malta will not ignore ‘serious concerns’ on global minimum tax proposal

Finance minister Clyde Caruana says Malta wants concerns on fairness and practicality addressed in working groups on global minimum tax proposal

Finance minister Clyde Caruana
Finance minister Clyde Caruana

Malta has told the European Council it will not be giving any green light on a Commission proposal for a global minimum tax for multinationals, without its reservations being given a proper hearing.

Finance ministers held a policy debate on the proposed Council directive on ensuring a global minimum level of taxation for multinational groups, after the European Commission tabled a proposal for a directive at the end of December.

Finance minister Clyde Caruana informed his counterparts that Malta’s concerns had to be addresed if the Council wants to find support on the taxation proposal.

Taxation is a sovereign matter that requires unanimous approval inside the Council of Ministers, the highest decision-making body in the EU.

Caruana told ministers he acknowleged the global efforts to get the tax agreement in place, but said Malta’s reservations to the OECD had not received any feedback.

“I do understand the motivation behind all this and implications, however I cannot ignore certain issues revolving around fairness and practicality of implementation. This is a political process and we have to answer to our people,” Caruana said.

Caruana said Malta will not be withdrawing its support to the taxation proposal but said it will discussing its concerns during the Council working groups. “I cannot ignore the serious concerns, which are various, about how all this affects our country,” he told finance ministers.

In their interventions, ministers confirmed the priority of the proposal, with a majority supporting transposition into the agreed rules of international corporate taxation.

The aim of the directive is to transpose OECD rules for base erosion and profit shifting (BEPS) – an international agreement which brings together 137 countries and jurisdictions – to European corporate tax rules.

French minister Bruno Le Maire, who presided the meeting, sounded an upbeat tone in the Council’s official statement.

“The agreement of 8 October 2021 is a success for the international community and, above all, a European success. It will provide fairness, efficiency and stability for our businesses and citizens. I am very pleased to conclude from today’s discussion that we all share the desire to make swift progress. The EU is at the forefront of this historic reform and that is good news,” the French Minister for Economic Affairs, Finance and Recovery said.