Scicluna seeking flexibility in EU approach to tax reform

The erosion of Malta’s tax base and profit shifting “is an issue” for his government, finance minister Edward Scicluna has told the press in Brussels ahead of a meeting of EU finance ministers.

“When we come to taxation, every country has its own system and regime. They need time to adjust, not to create uncertainty for companies and governments,” Scicluna told reporters.

In other related discussions on tax sovereignity, Malta is opposing a move by large member states to introduce a financial transactions tax or common corporate tax, that would affect the ability of small states like Malta, Luxembourg and Cyprus to leverage their tax regimes to attract large multinationals.

On 28 September 2011, the Commission tabled a proposal for a Council Directive on a common system of financial transaction tax (FTT) to ensure a fair contribution of the financial sector to the costs of the financial crisis, avoid fragmentation of the single market, and create disincentives for transactions that do not enhance the efficiency of financial markets.

Eleven member states – Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain – submitted a proposal for a Council Directive implementing enhanced cooperation in the FTT.

But non-participating member states like Malta and the UK say any future agreement should not go against the interests of this group of states.