Issue link: https://maltatoday.uberflip.com/i/826731
maltatoday, FRIDAY, 19 MAY 2017 News 8 Millions saved in taxes thanks CONTINUES FROM PAGE 1 In that role, he pushed through preferential tax amnesty leg- islation written by his former Çalık associates – called the 'Wealth Peace Act' – which allowed Çalık to repatriate unlimited amounts of off- shore cash, tax-free. An email included in the leaked documents, and dated 4 November, 2011 contains a clear warning: "Brother, the new system will be es- tablished – but this system will be based on tricking the [Turkish] finance authority; it's not a secure system. If the finance authority discovers this, it wouldn't be good for [Çalık's] reputation." The author of the note was Metin Atalay, Çalık Hold- ing's man in Dubai. The recipient was 33 year- old Albayrak, then CEO of Çalık, which had interests in textiles, real estate, telecom- munications, mining and en- ergy. This was owned by bil- lionaire Ahmet Çalık, a close friend of President Erdogan. Albayrak is also the husband of Esra Erdoğan, the presi- dent's eldest daughter. According to the leak of Al- bayrak's e-mails, Atalay was hired to run Çalık's office in one of Dubai's Free Trade Zones, which are tax-free citadels designed to attract foreign investors. He was hired to "only [be used] for the delicate mat- ters", referring to signing documents, with no ques- tions asked. This was be- cause Çalık in Dubai was little more than a shell to collect the fruits of the com- pany's worldwide business activities. And it was a prof- itable arrangement – the off- shore operation was bringing in millions each month. For the first half of 2011 alone, the Dubai company Çalık Enerji FZE's holdings were 34.7 million USD, according to Atalay's emails. Çalık wanted to bring this cash home. But a direct transfer from Dubai to Tur- key meant paying 20 per cent of this – and future profits – to the Turkish tax authori- ties. How do you get money from Dubai to Turkey, while pay- ing as little taxes as possible? The mission fell to Çalık's Foreign Affairs Director, Şafak Karaaslan. His answer was to establish an offshore structure through Malta and Sweden. Çalık's plan was to transfer the Dubai millions to bank accounts of companies in Malta, paying 35% tax to Mal- tese authorities. This seems bad on paper. But check the small print. Because Çalık's shareholders did not reside in Malta, nor did the company undertake significant activ- ity there, the company could apply for an 80% refund, ef- fectively creating a tax rate of only 5%. With the cash now in the EU, it could shift to accounts in Sweden. By falsely declar- ing to Swedish authorities that it already paid 35% in taxes in Malta, Çalık avoided further deductions. When the money was final-