Germany 'scrutinizing' Malta's tax legislation

Germany’s tax authorities were scrutinizing Maltese taxation legislation and has found close cooperation with Malta for “loopholes” to be closed, however Berlin does not consider Malta as an offshore haven but rather as a “secure investment haven.”

Berlin’s ambassador to Malta Bernd Braun made this assurance before finance minister Tonio Fenech this morning, when answering questions from media shortly after signing an updated double taxation agreement between Malta and Germany.

Ambassador Braun referred to Malta’s fiscal legislation, when replying to questions by journalists who referred to media reports last year that suggested that Malta was an offshore haven for German companies.

He denied that the signing of the protocol was related to those reports.

Malta and Germany, he said have agreed to combat tax avoidance and evasion in line with criteria established by the Organisation for Economic Co-operation and Development (OECD) recommendations.

The agreement will be included within a new protocol in the double taxation agreement between the two countries.

“Contrary of what one may think, the new protocol would not hinder German investment in Malta, as it will provide the right framework for more German investment,” ambassador Braun said.

Finance Minister Tonio Fenech said that Malta and Germany have agreed to enhance transparency in the exchange of information.

Germany – being a very important trading partner for Malta with exports totalling almost €261 million annually for the past five years and imports of €271 million- signed a double taxation agreement in 2001.