Issue link: https://maltatoday.uberflip.com/i/878567
maltatoday, SUNDAY, 24 SEPTEMBER 2017 9 MATTHEW VELLA MALTA'S finance minister has called for caution against a "quick- fix" solution by the EU's largest four member states, to tax internet giants like Google and Facebook on their turnover, rather than profits. Edward Scicluna warned that the proposal, intended to stop such multinationals from taking ad- vantage of low tax rates in other member states, could damage EU competitiveness as a whole. The proposal was made in a let- ter to the Estonian presidency of the European Council, by France, Germany, Italy and Spain. In it, they are asking the European Commission to tax internet giants like Google, Apple, Facebook and Amazon, on their turnover rather than on their profits, in an effort to prevent them from taking ad- vantage of low tax rates in some member states. "So called quick-fix solutions as this proposal is being labelled, which are taken on a unilateral EU basis, should be avoided, particu- larly where this could end up dam- aging EU companies, in the face of retaliatory responses from China or the US," Scicluna told MaltaTo- day upon returning from Tallinn, where EU finance ministers met last week. Malta operates a competitive tax system that rebates up to six- sevenths (85%) of tax paid by com- panies whose operations are based outside of Malta. While the 'internet turnover tax' does not affect Malta's taxation system, which deals with profits, it potentially would affect compa- nies in the digital economy. "Should this proposal be imple- mented within the EU, companies that offer online services and that are established in EU member states may find themselves being taxed more than once on essen- tially the same business, that is, once on their profits through the applicable corporate tax system, and another time through the pro- posed system on their turnover. This double taxation could render the EU as a whole far less competi- tive," Scicluna said. As a small member state, Malta sets much store by its financial services industry and competitive- ness on tax, a generator of thou- sands of jobs as well as millions in annual tax revenues. Scicluna admits that digitalisa- tion – the virtual economy – is up- setting tax systems that are based on the physical residence of assets, where the business is actually gen- erated. "The current taxation sys- tems were not designed for such a virtual activity," he said. Added to that is a recent decision by a French court to annul a €1.1 billion tax adjustment imposed on Google by the French taxman on revenue it made through its AdWords service. "The French don't want this to happen again and have devised a proposal which they wish the EU member states to endorse and implement." American companies like Goog- le, Facebook, Apple, and Amazon already have 'back office' opera- tions in countries such as Ireland, where they benefit from low tax rates. But earlier this year, the Eu- ropean Commission ordered Ire- land to recoup €13 billion in back taxes from Apple, after it allowed Apple to pay effective tax rates as low as 0.005% over 20 years on profits from sales in Europe. That is why the Franco-German proposal is to tax them not on profits where the company legally resides, but on the revenue made across the countries where they operate. "Malta's position at this stage, and until more information is forthcoming, is that given the global aspect of digitalisation of our economies and the work al- ready being carried out at the OECD on this matter, we are of the view that any action emanat- ing from the EU should be direct- ed at reinforcing the work of the OECD," Scicluna says. That is no endorsement. Scicluna knows how Malta's tax system, which grants companies like German chemical giant BASF an effective tax rate of up to 5%, is frowned upon by countries like Germany and France and parties on the left which see 'tax optimisa- tion' as another form of tax avoid- ance. Even Estonia, now as holder of the six-month EU presidency, has authored a proposal to tax internet companies where their profits are actually generated – and not just where their offices are physically located. Taxing internet companies on not just their physical but also their virtual establishments would not affect Malta's imputation tax system, which Scicluna makes a point of noting is "EU approved". "Our concern lies more with the level of complexity this proposal may introduce," Scicluna says. Tax rules are already complicated enough when dealing with busi- nesses that are physically resident in a country, let alone those with a virtual presence. He prefers to see the OECD take the lead in these discussions. In short, Malta does not like to rock the boat on taxa- tion. mvella@mediatoday.com.mt News Taxing the Internet's giants? Scicluna is a sceptic The EU's largest member states want to levy a tax on Facebook and Google on their sales, instead of their profits, to stop them from benefiting from low rates of tax where their European offices are set up Germany's Wolfgang Schauble is greeted by Maltese finance minister Edward Scicluna: Germany is one of the countries seeking greater controls on private companies' ability to pay low taxes away from where their profits are actually generated By a decree of the Courts of Magistrates (Malta), of 17th July 2017, the publica- tion of the following banns which appear hereunder was ordered for the purpose of service in terms of Article 931(3) of the Code of Organisation and Civil Proce- dure (Cap 12). Banns for Curators Republic of Malta to the Court Marshall By a decree given by the Courts of Magistrates (Malta) it was ordered that on an ap- plication of timothy and Corinne spouses Camilleri for the selection of Deputy Cu- rators to represent the unknown heirs of Leonard Ralph Fisher in the schedule of deposit number 1213/2017 and in other relative and subsequent acts where they demanded: that by means of a contract in the acts of Notary Dr Henri Vassallo dated 29th December, 2005, the applicants acquired "the fully-detached villa, named Villa Svedala numbered thirty four (34) and thirty-six (36) in triq irRussett, Kappara, San Ġwann, consisting of a basement (lower groundfloor), accessible from number thirty six (36) and a ground floor, first floor and overlying airspace, accessible from number thirty-four (34)" and subject to the annual and perpetual ground rent of €139.80 equivelent to Lm60. the root of title of this emphyteusis is found in the contract of Notary Paul Pullicino of the 1st October, 1966 (copy is attached and marked as Doc. A); It has resulted that a portion of the ground rent is payable to the unknown heirs of Leonard Ralph Fisher and Caryl Priscilla Fisher née Joye in the amount of €41.94 equivelent to Lm18. thus, the applicants want to effect the payment of the ground rent for the period between 2012 to 2017, that is for the last five years, that amounts to €209.70. therefore, the applicants are humbly calling upon this Honourable Court and and under its Authority are depositing the sum of €173.83 that together with €35.87 costs of this procedure amounts to €209.70 so that they will be withdrawn by who has the right to them according to law. Applicant: Timothy and Corinne spouses Camilleri, 34, the Mitties, triq ir-Rus- sett, San Ġwann you are therefore ordered to post a copy of these banns in the entrance of the court and call upon whoever wishes to act as curator to appear within four days in this registry and files a note with a declaration that he is pre- pared to act as such. You are also ordered to inform every one that if there is no such declaration with- in the stipulated time, this court will proceed to the selection of curators of office. After so acting, or if you should encounter any difficulty in the execution of the said banns, you are to inform forthwith this Court. Given by the aforementioned Courts of Magistrates (Malta) with the witness of Dr Consuelo Scerri Herrera, LLD, Doctor of Laws, Magistrate of the above mentioned Court. today 17th July, 2017 Registry of the Magistrates Court (Malta), today 28th July, 2017 ALEXANDRA DE- BATTISTA For the Registrar, Courts and tribunals.