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3 NEWS 27.1.2022 APS Visa Debit Cards offer an innova- tive, quick and secure way for custom- ers to access their money. Besides of- fering free unlimited withdrawals from all APS Bank ATMs found across the Bank's network of branches, customers can also enjoy four free withdrawals a month from other local bank's ATMs using their APS card, for further con- venience. e cards can also be used to carry out in-store and online purchases both locally and overseas, using 3D secure to make online purchasing more se- cure. e contactless function can be used for transactions up to €50, and notifi- cations are sent to customers via SMS for every transaction made with the card. e APS Visa Debit Card also al- lows customers to make use of the Bulk Deposit Machines available at every Branch. To learn more about the benefits of the APS VISA Debit Cards please visit apsbank.com.mt/cards. The benefits of the APS Visa debit card FROM PAGE 1 Caruana said that the government's position on the proposal had already been established but refused to give further details. "Unfortunately, I cannot divulge our position while discussions with- in ECOFIN have not even started," he said. Other countries, like Estonia, have al- ready said they would not support the proposal as drafted. On 22 December 2021, the Europe- an Commission published the text of a draft Directive laying down rules to prevent the misuse of shell entities for tax purposes and to amend Directive 2011/16/EU on Administrative Coop- eration (DAC). is proposed Directive provides indicators of minimum substance for undertakings in EU member states and rules regarding the tax treatment of those undertakings that do not meet the indicators. It would apply to all undertakings that are considered tax resident and are eligible to receive a tax residency certificate in a member state (subject to some specific exclusions), including SMEs, partnerships, trusts and other legal arrangements. It is likely to result in additional re- porting requirements and in some cas- es, additional tax liabilities for those impacted. In Malta, financial services practi- tioners, including accountants and au- ditors, are complaining at having been kept in the dark as to what will be the government's position on ECOFIN. A practicing accountant told Busi- nessToday that the new regulations would place undue burdens on the more than 500 foreign holding compa- nies registered in Malta. Under the draft proposal, all foreign companies registered in Malta would have to have a full-time director who would reside in Malta. e companies would also need to have offices rented in Malta and proof of a bank account in an EU member state. "What is even more prohibitive is the fact that the full-time director outlined in the proposal, would also not be able to sit as director of any other compa- nies, except for others within the same group of companies, if any," the source said. In the absence of a full-time director, the directive mandates the employ- ment of five full-time staff. Challenges ahead e European Commission's declared aim is to establish transparency stand- ards around the use of shell entities, so that their abuse can more easily be de- tected by tax authorities. Using a number of objective indica- tors related to income, staff and prem- ises, the proposal would help national tax authorities detect entities that exist merely on paper, the Commission be- lieves. It is the European Commission that is presenting the proposal because the European Parliaments is not allowed to legislate tax bills. e bill "responds to a request from the European Parliament for EU action to counter the misuse of shell entities for tax purposes and, more general- ly, to the demand of several Member States, businesses and civil society for a stronger and more coherent EU ap- proach against tax avoidance and eva- sion," the draft reads. Under the proposals, national tax au- thorities would have to scrutinize shell companies within their borders to see whether they provided any "economic activity." If they did, the authorities would leave the firms alone for five years be- fore repeating the scrutiny process. If they didn't, they would be stripped of all tax benefits. But EU governments have veto power and that could still be the undoing of the Commission's proposal. And with France having taken over the Presidency of the Council of the European Union in January, critics are concerned that it might prefer to fo- cus on legislative talks to implement a global bid to set a minimum effective corporate tax rate of 15 percent across the bloc. at topic was, in fact, on ECOFIN's agenda at last week's meeting. Some MEPs fear that France's focus on the corporate tax rate could spell the end for the Commission's draft proposal on shell companies. Real economic activity e proposal introduces a filtering system for the entities in scope, which have to comply with a number of indi- cators. ese levels of indicators con- stitute a type of "gateway". e proposal sets out three gateways. If a company crosses all three gate- ways, it will be required to annually report more information to the tax au- thorities through its tax return. e first level of indicators looks at the activities of the entities based on the income they receive. e gateway is met if more than 75% of an entity's overall revenue in the previous two tax years does not derive from the entity's business activity or if more than 75% of its assets are real estate property or other private property of particularly high value. e second gateway requires a cross-border element. If the company receives the majority of its relevant income through transactions linked to another jurisdiction or passes this relevant income on to other companies situated abroad, the company crosses to the next gateway. e third gateway focuses on wheth- er corporate management and admin- istration services are performed in- house or are outsourced. If an entity fails at least one of the substance indicators, it will be pre- sumed to be a 'shell'. EC proposal subject to countries' veto The European Commission proposes a number of objective indicators related to income, staff and premises

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