“EU tax agreement acceptable to Malta”

Speaking at a meeting of EU Finance Ministers (ECOFIN Council) in Luxembourg in June, Minister for Finance Edward Scicluna stated that Malta can accept the latest version of a proposal for an EU Anti-Tax Avoidance Directive following several amendments that have been made to the text which address the country’s original concerns.

The acceptance of the proposal comes after several months of intensive negotiations in which Malta worked to ensure that its general system of taxation and the competitiveness of its financial services sector will be safeguarded. Minister Scicluna thanked “the European Commission and the Dutch Presidency of the Council of the EU, which 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 latest text clearly 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.

“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,” Minister Scicluna said in the margins of ECOFIN.

Ministers also held a round of discussions on the strengthening of the Banking Union, which will be a priority during Malta’s Presidency of the Council of the EU in 2017, and also approved draft recommendations under the European Semester cycle of 2016.

On 17 June, Minister Scicluna also attended the European Stability Mechanism Annual Board of Governors meeting, as well as a meeting of the Euro group.

Minister Scicluna was accompanied by Ambassador Marlene Bonnici, Permanent Representative of Malta to the EU and the Permanent Secretary for Finance Alfred Camilleri during the ECOFIN Council meeting.