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.
