Issue link: https://maltatoday.uberflip.com/i/646116
maltatoday, SUNDAY, 28 FEBRUARY 2016 6 News A request to film the entire in- terview was not acceded to. The interview was carried out at the OPM. Don't you think you should resign for having set up a financial structure that allows you to avoid tax? I think I would have had to re- sign if I hadn't declared it. Eve- rything I'm doing is legal, a per- fectly legitimate structure. It was created in the summer of 2015 and I declared it at the first pos- sible opportunity, and I'm more than happy to share the docu- ments [of incorporation]. [Mizzi runs through an explanation on the incorporation of his foreign company-trust set-up]. This is a set-up that allows tax avoidance on a significant amount of wealth… Why? Because there is no tax on assets held in New Zealand offshore trusts if you don't live there, and you employ a Panamanian company to administer it. No I declared it proactively. It does not allow for tax avoidance. I am declaring it in Malta and I will pay tax in Malta on its full earnings. On the earnings you repatriate in Malta, not on the full wealth you are parking offshore – because this is why you have created it. No. I pay tax on my earnings. I declared it clearly. It has not as yet operated. All its earnings will be taxed. You won't pay tax because the assets will be held in the NZ trust, because the Panamanian company includes the trustees that will manage the assets. That's incorrect. It's a family trust. I've worked overseas, my wife works overseas. We decided to go to New Zealand because it's neither Malta nor China. It's a reputable jurisdiction… Why not do it in Malta? It is a top tier jurisdiction and a stable parliamentary democracy… I'll come to that… we own an overseas property and one in Malta; I have an amount of cash in Malta that I want invested properly through a proper set- up. The beneficiaries are my family. And I think I have every right to structure it in that way. Why not Malta? HSBC has sold its trusts division to Ganado, who have been involved in [gov- ernment's] major transactions – managing my trust would not be the right thing. BOV is re- ducing its involvement in trusts, and there are a number of pri- vate firms which I wouldn't be very comfortable utilising – I could use Simon Busuttil's for- mer firm… but I wanted the right professional people to manage it. You do acknowledge that as a non-NZ resident, you won't pay tax on assets held in the trust? But I'll pay tax in Malta. Every- thing is going to be declared in Malta. Let's say you have €1 million passing through into the trust. You will only pay tax on that portion repatriated not on your full wealth… The reason that there must be a Panamanian company is that our advisors suggested that the company had to be domiciled elsewhere from New Zealand. There are lots of companies reg- istered in Panama and the cost of registering the company is not significant. There are also notorious secrecy laws in Panama – it is an offence to breach confidentiality when disclosing sources of income. It has a bad reputation, it has been on European blacklists, and it houses money laundering operations. So this is something that has to do with your reputation as a minister, that you have chosen a jurisdiction that is not reputable. Let's be clear. I declared my trust up-front. Had I not de- clared my assets in the parlia- mentary declaration your ques- tions would be legitimate. I will be actually monitoring all the activities of the trust, annually updating changes in the activi- ties of the trust, and pay all tax in Malta… Is there a significant amount of wealth you and your spouse possess that merits the need for this offshore trust? All my personal wealth is de- clared in the declaration of as- sets… [in 2014 Mizzi declared two properties, apart from 4,000 MIA shares, €310,000 in bank deposits, €329,000 in loans, and a €76,000 income]. Are you just using the offshore trust for your London property? And for the money I have de- clared in my parliamentary dec- laration. And just this merited the need to invest in an offshore trust… It's a long-term lifetime set- up. It is the right thing to do. I have considerable deposits in the bank in my name which are sitting unutilised – I don't have time to reap a proper return on them, so I asked professionals to reap those benefits, and use the trust throughout my life. I don't exclude changing the structure in future, as rules change. In that case I will follow my advisors' guidance. What will you be declaring in your parliamentary declarations? Money that flows into your Panama company and onto the NZ trust? I will be declaring all move- ments – anything which is de- posited in the trust. If there is a return I will be declaring that. The European Commission is proposing anti tax-avoidance laws, but you – a minister from the EU – are using a set-up that will allow minimal tax exposure. Aren't you in an awkward position? I'm not avoiding tax, I'm not breaking any laws. [UK prime minister] David Cameron's fam- ily trust has utilised Panama as well. It's quite something for a social democrat minister to use a Conservative prime minister as an example. Don't you think using offshore companies to minimise tax is not even fitting for a Labour minister? No, I will pay all due taxes while I am resident here. I do qualify as a social democrat minister – I reduced energy bills, eradicated waiting lists on medicines, I'm cutting down waiting lists, and reducing waiting lists on hip re- placements at hospital. I will de- liver more, and they will attack me for it – they will attack me by saying I'm not with my wife, and now for having a trust. I'm a progressive who wants wealth to be redistributed but I'm also in favour of aspiration. I work here from Monday to Sunday – I think it is OK for me to think of my family and plan ahead. As minister you are responsible for some multi-million projects here: Electrogas will build an LNG plant here and it was chosen after an expression of interest soon after Labour's election, the speed of which led many to believe its choice was a foregone conclusion. Now your financial set-up here, starting form Panama, is a classic set-up Energy minister Konrad Mizzi says he will retain an offshore company Panama that is run by trustees for his family's trust in New Zealand, and insists he is doing nothing wrong by putting his assets offshore to be invested. Interview by MATTHEW VELLA 'It's a free world. Everyone can choose whatever they wish and should seek advice on what is best for them' Andrea Massa 27.09.1993 – 28.02.2001 Cherished memories of ANDREA MASSA, aged 7, on the 15th anniversary of his tragic death. e grief and shock was severe To part with one we loved so dear No time to bid a last farewell No chance to say goodbye. We miss your beautiful, smiling face Your warm embraces and your loving kisses. Mum Josephine, dad Charles and brother Daniel "I'm not avoiding tax, I'm not breaking any laws. [UK prime minister] David Cameron's family trust has utilised Panama as well"