Pana-Report Confirmed: Malta is No Tax Haven

Any­one in the tax indus­try in Mal­ta will have become increas­ing­ly famil­iar with the term ‘tax haven.” Tax havens were wide­ly report­ed on by the media this year, so much so that the crim­i­nal machi­na­tions of a num­ber of busi­ness own­ers have been exposed to the pub­lic. Some of these had actu­al­ly com­mis­sioned the oper­a­tion of a let­ter­box com­pa­ny some­where in the world to han­dle their high sales. In most cas­es, such an off­shore com­pa­ny is part of a large com­pa­ny con­struct. At the end of the line, there is usu­al­ly a ben­e­fi­cia­ry who receives com­pa­ny prof­its either com­plete­ly or almost tax-free.

Is Malta Limited an offshore company?

The first ques­tion is whether Mal­ta Lim­it­ed qual­i­fies as an off­shore com­pa­ny. This is debat­able. Mal­ta, as an EU mem­ber, does not meet the cri­te­ria for an off­shore state. Rather, it stands pri­or­i­tized for a Mal­tese busi­ness to active­ly oper­ate and would not do to be con­sid­ered mere­ly as a man­age­ment com­pa­ny on an island.

Investigations around the Panama Papers

In the course of events cir­cling the Pana­ma Papers, the mod­el behind Mal­ta Lim­it­ed was exam­ined more close­ly. Among oth­er things for which the com­pa­ny was under scruti­ny for, it had with the help of two Mal­tese com­pa­nies great­ly reduced its tax bur­den. The Pana-com­mit­tee exam­ined whether Mal­ta adhered to applic­a­ble legal pro­vi­sions. After months of thor­ough inves­ti­ga­tion, the com­mit­tee pre­sent­ed its final report. The results can be sum­ma­rized briefly: Mal­ta adheres to all laws and is as such not clas­si­fied as a tax haven. The guide­lines of the BEPS and Fac­ta Ini­tia­tive against the relo­ca­tion of prof­its of large cor­po­ra­tions are to be respect­ed.

The report also showed that the gov­ern­ment was involved in the exchange of rel­e­vant infor­ma­tion and that read­just­ment of tax data was pos­si­ble. Thus, it is near impos­si­ble for Mal­tese com­pa­nies to evade tax­es.

Finance­Mal­ta, as an inde­pen­dent finan­cial orga­ni­za­tion in Mal­ta, wel­comed the find­ings of the inves­ti­ga­tion and there­fore con­tin­ues to view Mal­ta’s posi­tion as an attrac­tive des­ti­na­tion for invest­ment.

About Philipp Sauerborn

In 2005, Philipp Sauer­born joined the firm of St. Matthew in Lon­don, one of the lead­ing Ger­man account­ing firms in Eng­land renowned for its exper­tise in cor­po­rate, com­mer­cial and tax law, as a depart­ment head. After three years, he was a part­ner and man­ag­ing direc­tor.
Towards the end of 2011, he decid­ed to move to Mal­ta, where he first worked at inter­na­tion­al law firms and con­sul­tan­cies in an employed and con­sult­ing capac­i­ty. Since the begin­ning of 2013, he has been a senior employ­ee at Dr. Wern­er & Part­ner. Mr. Sauer­born is cur­rent­ly com­plet­ing his ADIT ‑Advanced Diplo­ma in Inter­na­tion­al Tax.

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