Socialist MEPs back Panama report addition to consider Malta a tax haven

The Nationalist Party will be supporting efforts by its MEPs and the European People’s Party to vote against an amendment by European socialists to consider Malta a tax haven in the upcoming PANA inquiry committee’s final report.

The amendment calls on the European Commission to regard Malta, Luxembourg, the Netherlands and Ireland as tax havens.

The PN took glee in pointing out that while there is bipartisan consensus against Malta being considered a tax haven, Labour was unable to convince socialist MEPs. “If this amendment passes, Malta’s economy will be hit and with it the livelihood of many Maltese families,” the PN said.

Malta grants foreign multinationals a generous six-sevenths rebate on taxes on profits booked here, which ultimately means an effective tax rate of 5%.

The amendment was supported by most of the S&D MEPs presented for the group meeting.

The amendment says that according to NSO data, foreign investments in Malta account to 1474% of the size of its economy. Malta is regarded a “sink Offshore Financial Centre” according to research of the University of Amsterdam, and that the data provides clear indication that Malta and other EU states are facilitating excessive profit-shifting activities at the expense of other European member states.

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The amendment will now be voted upon at the European Parliament in Strasbourg next week.

The EPP will not be voting in favour of the S&D’s amendment.

Indeed the draft report of the PANA committee, which came to Malta on a fact-finding mission in February 2017, had refuted any claims of Malta being a tax haven.  The Maltese tax system was described as being “very attractive and in line with current international and EU standards as regards harmful tax competition.” But finance minster Edward Scicluna admitted that the Maltese tax system can be prone to abuse and confirmed that Malta disagreed with Commission proposals on specific tax issues such as common taxation.

In a statement, the three Labour MEPs said they would fight against any attempt that could undermine Maltese financial services “even from our same political group”.

The MEPs said they would fight to protect Malta’s taxation system, which it said was in line with OECD standards and also confirmed by the PANA committee’s draft report.

“It is clear that our warnings that continuous attacks against our country would open the door wide open to undermine our financial services sector, were not to be taken lightly. The truth is that there are MEPs who dislike Malta’s success in attracting investment to the country, which is why reference is being made to Malta in a report that actually says out tax system is in line with international requisites. There is a clear reference [in the amendment] that our FDI is larger than the European average. This is all down to a matter of who puts their country before any other interest, irrelevant of their political group.”