‘We’ve got nothing to hide’, Scicluna tells German press over tax system

In Berlin, Malta finance minister Edward Scicluna mounts offensive to defend island’s tax imputation system

Edward Scicluna (right) with European Commissioner Pierre Moscovici
Edward Scicluna (right) with European Commissioner Pierre Moscovici

Finance minister Edward Scicluna told German finance journalists at the Maltese embassy in Berlin, that Malta “had nothing to hide” in a bid to repel claims by a state minister of North-Rhine Westphalia that the island hosted 70,000 offshore companies.

A data leak of Malta’s company registry, which contains almost 80,000 companies, was claimed by the state minister of having all offshore, a claim immediately rebutted and denied by Scicluna.

“What you see is what you get… We have nothing to hide,” Scicluna was quoted as saying by the Suddeutsche Zeitung about Malta’s full imputation system, a system of tax rebates that was recognised and accepted by the European Union when Malta joined in 2004.

The system enjoys the support of both the Nationalist and Labour parties, which is an essential part of the Maltese financial services industry and which annually brings in over €247 million in international tax receipts. The system gives up to 85% in rebates on tax paid by companies from dividends payable to foreign shareholders.

“Certain persons from Germany”, Scicluna said referring to NRW state minister Norbert Walter-Borjans, want to harm Malta’s reputation.

“If the German tax authorities ask us for information about German holdings in Maltese companies, we will pass them on,” he said. 

Numerous German corporations use Malta’s incentives, such as the chemicals group BASF, the car-rental company Sixt and airport operator Fraport. Back-offices in Malta tend to employ little more than auditors, perhaps no employees at all.

Scicluna last week dismissed Walter-Borjan’s claims as hyperbole. “Pull another one,” Prof. Scicluna wrote on Twitter. “Since when the whole Maltese company register of Maltese registered companies becomes foreign, offshore and German?”

The minister has called the allegatios “baseless and highly damaging, fabricated allegations with the clear intent of discrediting the Maltese financial services industry.”

“This is being done by individuals who are obsessed with maliciously scoring points on the local political scene, with utter disregard for the truth and the livelihoods of thousands of families depending on an industry which has been painstakingly cultivated through cross-party collaboration over the years.”

Scicluna will also be holding talks with the German Federal Finance Minister Wolfgang Schäuble at the Federal Finance Ministry.

The number of Maltese companies registered over the years has reached around 80,000, of which, 53,000 were still on the register. The others had been dissolved or struck off.