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MT 25 May 2017

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maltatoday, THURSDAY, 25 MAY 2017 News 9 Scicluna lauds Maltese work on anti-tax avoidance rules Franco-German talks on common tax code mooted during Macron-Merkel meeting MAT THEW VELLA FINANCE Minister Edward Scicluna has once again de- fended Malta's tax imputa- tion system as he faced ques- tions from the Brussels press corps during a press confer- ence on tax rules following a meeting of European finance ministers. Scicluna said referring to The Malta Files, a journal- istic project that focused on Malta's generous tax refund system for foreign shareholders, that all mem- ber states were fighting tax avoidance and tax evasion. "But you do this by serious legislative work, by coopera- tion. All in the EU abide by its directives. Malta carried forward the Anti-Tax Avoid- ance Directive (ATAD) and we have no started working on the laborious Common Consolidated Tax Base. We have also reached agreement on double taxation dispute resolution and this work is happening alongside the OECD report on BEPS (base erosion, profit shifting)." Scicluna then accused the stories in The Malta Files, published by the European Investigations Collabora- tions network of journalists, which includes MaltaToday, of damaging Malta's repu- tation. "If one wants to talk about ultimate beneficial owners, there are ways to bring about serious legisla- tion in the EU," he added. Scicluna said that while financial practitioners would use any tax regime in the world to minimise tax, he said the EU was try- ing to minimise this reality through its directives. "Malta has never protest- ed or blocked any rules on ATAD… as long as there is a concerted effort across the EU, we will move slowly but surely in the right direction." Franco-German talks Leading German business newspaper Handelsblatt has also reported sources saying that newly-elected French President Emmanuel Ma- cron and German Chancel- lor Angela Merkel were plan- ning to synchronise their tax codes for businesses. In an interview with Han- delsblatt ahead of the meet- ing, French finance minister Bruno Le Maire said: "Har- monizing corporate taxes is a crucial issue in Europe. It's essential in fighting dis- tortion of competition and illegitimate competition through tax dumping… US electronics giant Apple at one point paid only 0.005 percent in taxes on all prof- its made within the EU." In 2012, former French president Nicolas Sarkozy and Merkel had produced a green paper on the harmo- nization of corporate taxes. But the initiative came to a halt when Sarkozy lost the presidential elections later that year. The green paper produced at the time could form the basis of renewed tax harmo- nization talks but German finance minister Wolfgang Schäuble was reported to be prepared to take tax har- monization one step further and include more countries into the project: possibly in- troduced Italy and Spain in a common tax law. The EU Commission's 2011 plan for a common consoli- dated corporate tax base was rejected after almost four years of fighting. A new initiative started last year is now trying to achieve harmonization in piecemeal: First, the Com- mission wants to implement common rules for determin- ing a firm's EU-wide profits. A future second step should then provide a com- mon base for redistribut- ing tax revenues between EU member states. But that would mean that some countries would lose some of their current revenues, while others would gain. And no one wants to be among the losers. It is not just Malta that would not agree with this: in seven EU member states, including Ireland and Den- mark, national parliaments have voiced concern that EU tax legislation might violate fiscal sovereignty. Schäuble himself has doubts about the new com- mon corporate tax base ini- tiative, sources within the finance ministry told Han- delsblatt. Even though he officially supports the draft, he disagrees with the pro- posal of tax cuts for research investments and tax credits for investments. Edward Scicluna

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