Issue link: https://maltatoday.uberflip.com/i/1040165
maltatoday | WEDNESDAY • 17 OCTOBER 2018 3 NEWS CONTINUED FROM PAGE 1 "Such schemes are currently operated by Antigua and Bar- buda, The Bahamas, Bahrain, Barbados, Colombia, Cyprus, Dominica, Grenada, Malaysia, Malta, Mauritius, Monaco, Montserrat, Panama, Qatar, Saint Kitts and Nevis, Saint Lu- cia, Seychelles, Turks and Cai- cos Islands, United Arab Emir- ates and Vanuatu." The OECD published a short analysis of over 100 CBI schemes which it said posed a high-risk to the integrity of its common reporting standard for taxation (CRS). In the main, the OECD's criti- cism was geared at the abil- ity for such golden passport schemes to allow the rich to hide their assets abroad or even incur lower taxation on their foreign assets. "In particular, identity cards, residence permits and other documentation ob- tained through CBI schemes can potentially be abused to misrepresent an individual's jurisdiction(s) of tax residence and to endanger the proper op- eration of the CRS due diligence procedures," the OECD said. Malta offers an effective tax rate of 5% on dividends from profits generated outside of Malta but booked here. The OECD pointed out that schemes that are potentially high-risk are those that give a taxpayer access to a low per- sonal income tax rate of less than 10% on offshore financial assets and do not require sig- nificant physical presence of at least 90 days in the jurisdiction. An initial contribution of €650,000, a property lease or purchase agreement and the holding of a maximum invest- ment – among other obliga- tions – are enough to prove an applicant's residency in Malta, the Regulator of the IIP has confirmed. "This is based on the premise that most individuals seeking to circumvent the CRS via CBI/ RBI schemes will wish to avoid income tax on their offshore financial assets in the CBI/ RBI jurisdiction and would not be willing to fundamentally change their lifestyle by leav- ing their original jurisdiction of residence and relocating to the CBI/RBI jurisdiction." "Such a scenario could arise where an individual does not actually or not only reside in the CBI jurisdiction, but claims to be resident for tax purposes only in such jurisdiction and provides his Financial Institu- tion with supporting docu- mentation issued under the CBI scheme, for example a cer- tificate of residence, ID card or passport." But IIP boss Jonathan Car- dona has said his agency is carrying out a due diligence investigation on the sources of wealth declared by the multi- millionaires aspiring for a Mal- tese passport. "We ask for eve- ry single piece of supporting documentation on how appli- cants' wealth was created, and that includes banking state- ments and tax certificates, but also proof of donations or how wealth was inherited, amongst others." Malta's Individual Investor Programme has generated over €680 million for the govern- ment's posterity fund, as well as an additional €170 million in property investments. The OECD has recommend- ed further questions that a fi- nancial institution may raise with the account holder when they have acquired a golden passport. JAMES DEBONO THE Planning Directorate is recommending the approval of a Do-it-Yourself retail centre in Qormi, opposite the park and ride area which will integrate a Roman tomb, cart ruts, a farm- house and a historical mill room in the new commercial centre. The Roman tomb discovered during archaeo- logical investigations connected to the project will be visible from the glazed floor of a restau- rant above it and from a retail outlet located on the same floor. The same retail outlet will also include 225sq.m of cart ruts in its flooring. A fi- nal decision will be taken on 25 October. A farmhouse at the upper corner of the site will be demolished to make way for the road wid- ening works as instructed by Transport Malta. The same farmhouse will be reconstructed and will be used as the living quarters for the com- mercial building's security personnel. The re- sulting roofed area surrounding the farmhouse will include a landscaped area. In total the project will include 597 parking spaces, 8,600sq.m of retail, 750sq.m for catering establishments and 470sq.m of restored histori- cal monuments. A large 4,180sq.m roof area is being proposed as a public garden for which the developer will make a contribution of € 210,000 paid to the Urban Improvement Fund. The triangular site between Triq Hal-Qor- mi and Triq it-Tigrija where the develop- ment will take place, previously consisted of 10,148sq.m or agricultural land. The soil was removed due to archaeological investigations ordered by the Superintendence for Cultural Heritage before a permit for the excavation of the site was issued last year. The zoning of the land in question was origi- nally designated for warehousing but was changed to accommodate an old people's home and public community facilities in August 2013, when the site belonged to another owner. Back then, the old corner building on site had to be conserved as a community centre and the area above the development was to be retained as open space. The DIY retail complex is being proposed by Centre Park Holdings, a company owned by Paul Caruana's Quality Holdings, Anthony Fenech's Tum Invest and V&C Developments, which is owned by Charles and Vincent Borg. Roman tomb to be visible from commercial centre's restaurant OECD: 'Rich could use golden passport schemes to hide assets'