More financial services bodies welcome PANA Committee’s ‘validation of Maltese tax system’

The Malta Fund Industry Association, the Malta Association of Retirement Scheme Practitioners and the Society of Trust and Estate Practitioners, Malta branch, have welcomed the European Parliament PANA Committee’s final report entitled ‘Validation of the Maltese tax system’.

The MFIA, MARSP and STEP: “Noted with regret that Malta’s tax system was, during the course of the events leading up the appointment of the PANA Committee and during the course of its mandate, subject to unfair criticism and speculation.

“Without wishing to enter into the merits of the other findings and recommendations by the PANA Committee, MFIA, MARSP and STEP note with satisfaction that the PANA Committee has, by means of its report, definitively laid to rest the unfair criticism and speculation about Malta’s taxation system.”

They highlighted how the PANA Committee confirmed, consistent with findings by other EU institutions in the past, that the Maltese tax system is in line with current international and EU standards as regards harmful tax competition, and that Malta has transposed EU rules and respects OECD standards in terms of transparency, the fight against tax fraud and money-laundering.

The three financial services representative bodies called on all the stakeholders of the economy and the local media to work together for the common good of the industry and said they support the joint statement issued by FinanceMalta, the Institute of Financial Services Providers, the Chamber of Commerce, Enterprise and Industry and the Gozo Business Chamber on the findings of the PANA Committee, published on 8 November.

That statement highlighted that “the PANA Committee’s testament of the Maltese tax system confirms that Malta is not a tax haven as it has been labelled by a number of illinformed speakers from various EU countries as well as certain sectors of the international media.

“The PANA Committee’s confirmation endorses Malta’s long-stated position that the country is and will remain committed to the international standards of transparency and effective exchange information through a broad network of EOI instruments with a significant number of jurisdictions. Suffice it to mention in this regard that Malta’s public registry is open to anyone for scrutiny as the relevant data may be directly obtained from the Registry of Companies.

“Equally so, Malta’s tax regime respects the required OECD standards where in its report issued in 2013, the OECD had confirmed that the Malta tax authorities have broad access to information for exchange of information purposes pursuant to income tax laws, including bank and accounting information, stressing that adequate rights and safeguards are in place to guarantee an effective exchange of information.”

They pointed out that Malta’s tax system had been discussed in detail and agreed to (in March and November 2006) with both the European Commission (as well as with DG Competition from a State Aid perspective) and with the member states within the Code of Con- duct Group which reviews tax measures to enable a determination as to whether they are harmful in terms of the Code of Conduct for Business taxation.

“In fact, Malta’s tax system is fully transparent and based on statutory rules rather than on administrative discretion, as has been the case in certain jurisdictions. Equally so, the statement said, it is important to mention that Malta’s offshore legislation was actually repealed in 1994 and all companies in Malta have to publish audited financial statements.

“Malta’s exponential growth of the financial services industry and other key economic sectors is driven by a number of critical success factors but particularly led by innovation, a robust operational infrastructure all within a dynamic business environment. The coun- try’s success is also driven by the accessibility and efficiency of the relevant regulatory authorities when it comes to processing applications for new operating licences, the presence of comprehensive legal and regulatory frameworks to include the various innovations thereto, as well as the strong responsiveness of the industry practitioners to the requirements of international investors which has been found to be invariably efficient and highly competitive.”

The bodies said: “The government and the industry are actively seeking to sustain and further strengthen the current level of economic growth through various initiatives revolving around the development of new sectors such as the Blockchain, Cryptocurrencies and FinTech amongst others.”

They also called on all the stakeholders of the economy and the local media “to work together for the common good of the industry. In so doing, the industry stakeholders will ensure that in the eyes on the international business community, Malta is viewed and well-positioned as a serious jurisdiction, where its economic growth is driven by a sustained programme of innovation and supported by the presence of a sophisticated business ecosystem.

“These developments augur well for Malta’s ambition to sustain the achievement of significant economic success and continue to play an important regional and international role in this increasingly globalised business world.”