Maltese offshore wealth estimated at around €5.2 billion

The offshore holdings of Maltese taxpayers are valued at €5.2 billion, estimated at 48% of GDP, a report released by the European Commission shows.

The GDP ratio is among the largest in the EU.

Member States with the largest offshore wealth in GDP terms are Cyprus, Malta, Portugal and Greece, which are consistently above the EU-28 average. In each year the ratio of offshore wealth in these countries is above 20%.

Taxpayers in Cyprus and Malta held around half their wealth abroad. The data comes from a European Commission report published recently, which looked at international tax evasion by individuals in Europe. The cut-off date for the information is 2016.

The report focused exclusively on wealth held in Type II International Financial Centres, defined as jurisdictions providing shell companies and having lax regulations on disclosing identities of company owners.

Back in 2001, the report claims that Malta's offshore holdings stood somewhere around €1.6 billion and that this figure did not vary for a number of years until 2006 when it doubled to €3.4 billion. 

After 2006, the figure went back to normal before it more than doubled from €2.3 billion to €5.2 billion between 2011 and 2016.

"Tax evasion may not be the main and only reason why individuals seek to hide their wealth in offshore accounts. Other motives include the concealment of the proceeds from crime or corruption and the hiding of wealth from public agencies, business associates or family members," the report reads. 

The commission's write-up highlights several measures to combat tax evasion and the impact this might have had on offshore accounts. The EU Savings Directive, which came into force in 2005, forced tax evaders to either report their accounts to the fiscal authority in their home country or to pay a withholding tax to keep their anonymity.

The report adds that while the conclusions were gleaned from several public statistics published by international organisations especially the Bank for International Settlements, it also relies on statistical assumptions to address the lacunas in the data.

Member states with the largest share of offshore wealth are Germany, the United Kingdom, France and Italy, contributing to more than 65% of the EU's estimate offshore wealth. 

The total amount of offshore wealth of EU residents in 2016 as estimated at €1.5 trillion.

Read the report here: