Issue link: https://maltatoday.uberflip.com/i/1508574
5 NEWS 28.9.2023 FROM PAGE 1 The global minimum tax rules were set by the OECD, an international or- ganisation, and all EU countries have to adopt them by 2025. The minimum effective tax rate system will overhaul Malta's corporate tax regime that currently affords foreign companies rebates that bring down the effective tax rate to 5% from 35%. The high turnover threshold means that several companies employing hundreds in manufacturing and gam- ing will be impacted. Asked by MaltaToday about the im- pact of the impending tax change on public finances, Caruana insisted it was not intended to generate addi- tional revenue. "The new rules allow countries to introduce incentives but these would have to apply across the board to all companies and not just those for whom the rules apply. This is the bal- ance we are trying to seek but I have made it amply clear with practition- ers and stakeholders that this change will be revenue neutral for the coun- try," he said. So far, the finance ministry has been running simulation models of the new system to determine how the change will impact public finances. Last April, MaltaToday reported that lack of clarity on how the new corporate tax regime was going to be structured was causing unease among companies that would be impacted by the changes. Malta's existing tax imputation sys- tem that gives it its low-tax jurisdic- tion status was cleared by the Euro- pean Commission when Malta joined the EU. But over the years, larger countries like Germany and France applied pressure to have corporate taxes harmonised across the EU to stop large companies from shifting profits to low-tax jurisdictions. Taxation within the EU is a national competence and any changes to this require unanimous support at Coun- cil level. Unanimity was achieved last December as the EU settled for the global minimum tax of 15% agreed at OECD level. Details on new corporate tax regime to be announced in the budget BUDGET 2024 Finance Minister Clyde Caruana said government has no intention of generating any additional revenue from the introduction of a minimum effective tax rate of 15% for companies with turnover of €750 million