EU plans new rules to stop tax evasion by multinationals

A recent scan­dal involv­ing HSBC plc has sparked a new dis­cus­sion in the EU Com­mis­sion. The HSBC head­quar­ters in Switzer­land are being inves­ti­gat­ed for mon­ey laun­der­ing and alleged tax eva­sion schemes. What kicked off the inves­ti­ga­tion was a recent­ly pub­lished rev­e­la­tion about the bank claim­ing it turned a blind eye to ille­gal activ­i­ties from blood dia­mond traders and arms deal­ers, as well as help­ing rich peo­ple to evade pay­ing tax­es. This infor­ma­tion stemmed from files stolen by Hervé Fal­ciani, a for­mer employ­ee. The infor­ma­tion dates back 10 years, and it has now come to light that the bank may have helped their clients to evade hun­dreds of mil­lions of pounds.

The Euro­pean Com­mis­sion now launched an ambi­tious project to work on a fair­er, more trans­par­ent tax­a­tion sys­tem in the EU in order to com­bat tax eva­sion and aggres­sive tax plan­ning. The coun­tries that are cur­rent­ly under inves­ti­ga­tion are Ire­land, Lux­em­bourg, Bel­gium and the Nether­lands, as they allow multi­na­tion­als a very favourable tax­a­tion. The exec­u­tive com­mis­sion now said they will pro­pose new rules for tax­a­tion in the EU next month, in order to cre­ate a sys­tem which is fair. The same tax­a­tion shall apply to all cit­i­zens and busi­ness­es.

The EU has now pledged to amend tax rules that favour big com­pa­nies. A spe­cial com­mit­tee had been estab­lished last week to inves­ti­gate nation­al tax rules that favour big multi­na­tion­als in Lux­em­bourg. This inves­ti­ga­tion is based on leaked doc­u­ments show­ing bet­ter deals for larg­er com­pa­nies.

Malta’s tax­a­tion sys­tem is the same for every com­pa­ny. Every com­pa­ny that is reg­is­tered in Mal­ta will have to pay 35% cor­po­rate tax. How­ev­er, it is pos­si­ble to apply for a refund of up to 6/7 if cer­tain cri­te­ria are met. This busi­ness mod­el is not suit­able for every com­pa­ny, and the rules are very clear, as the com­pa­ny oper­a­tions will have to be based in Mal­ta. How­ev­er, the same rules apply to all com­pa­nies, no mat­ter if they are big or small. The tax­a­tion in Mal­ta is trans­par­ent and in accor­dance with EU laws.

If you wish to find out more about tax­es in Mal­ta you are wel­come to con­tact us at the legal office of Dr. Wern­er & Part­ner. We are spe­cialised in com­pa­ny for­ma­tion, and have helped many clients to estab­lish their inter­na­tion­al busi­ness in Mal­ta.

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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