2017 was undoubtedly a turbulent year for the whole “tax world”, and not just for us in the law office of Dr. Werner and Partner. At the beginning of the year the Panama Papers (and now in October the Paradise Papers) were set free; leaked. The results of both instances are roughly comparable.
There area number of offshore companies; In the past many people have taken advantage of them. The goal has always been the same: to save taxes. Or to avoid taxes altogether.
Is such a tax practice in 2018 still legitimate?
Focus has always been on offshore companies, essentially companies that can not demonstrate a real operation in the country of their headquarters and only serve to bill. Profits are thus postponed and the tax burden radically reduced. However, it must be made clear that such an approach is no longer possible through the OECD’s BEPS initiative. The tax authorities exchange all information, thereby rendering relocation of profits impossible. Tax evaders, who in the past have remained unnoticed in evading millions in taxes, can no longer shift profits anonymously. Morally, this is a step up.
The model of Malta Limited in 2018
If you decide to start a company in Malta (- Malta Limited), you must pay a lot of attention to the finer details of operation. A company foundation is sorted quickly. We in the office of Dr. Werner & Partner are in close contact with the authorities who enable this, but simply starting up the company is obviously not enough. Rather, this is the moment our work really begins. We do not implement letterbox companies. Simply put, they illegal and inefficient in the long run. Therefore, an active business operation must be demonstrated in Malta. This means using an office, hiring employees and placing a managing director on site. Special attention is also paid to the activities of the company abroad. You have to be particular here. As soon as a person has power of attorney or account access abroad, for example in Germany, this can trigger a permanent establishment and thus a tax liability in Germany.
Conclusion of ‘Malta Limited 2018’
It is certainly still possible to save taxes here with a Malta Limited in 2018 . However, this must be implemented early on and carefully planned. Only those who comply with all legalities, leaving the tax authorities no room for interpretation in case of doubt, can legally operate a company in Malta. We at Dr. Werner and Partner are happy to inform you about the details of such implementations.