Malta and EU Tax and Compliance Policy Bulletin 90

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Malta and EU Tax and Compliance Policy Bulletin 90

David Marinelli

March 8, 2024

Uncategorized

Malta-Switzerland Double Taxation Agreement

Amendments to the Double Taxation Relief (Taxes on Income) (The Swiss Confederation) Order, 2012, have been published in LN 198 of 2021. The amendments will come into effect on such date as may be announced in the Government Gazette. LN 15 of 2024 notified that the Protocol amending the Double Taxation Agreement between the Government of Malta and The Swiss Confederation published as a Schedule to Legal Notice 198 of 2021 shall be deemed to have come into force on 3rd November 2021.

EU List of Black-Listed Jurisdictions Updated

The EU List of non-co-operative jurisdictions has been updated, with Bahamas and Turks and Caicos Islands delisted and Belize and Seychelles moved to Annex II pending the results of a supplementary review by the Global Forum on Tax Transparency and Exchange of Information. The remaining counties on the Annex I list are: American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, the Russian Federation, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.

European Parliament Adopts Resolution on Role of Tax Policy and Reform of Corporate Tax Policy

The European Parliament’s Committee on Economic and Monetary Affairs adopted two resolutions concerning taxation. One concerning the role of tax policy in times of crisis and the other concerning reform of corporate taxation rules. The resolution concerning tax policy in times of crisis highlights issues surrounding excess profits made by multinationals due to times of crisis, and the fact that environmental taxation remains low in terms of total tax revenue in the EU. It calls for increased taxation of air and sea transport. The resolution also identifies issues posed to tax systems by cross-border working and the need to reduce tax fraud, avoidance and evasion, calling for solutions to issues surrounding these topics.

The resolution concerning reform of corporate taxation rules focuses on making recommendations on how Member States can ease the burdens on SMEs through the use of corporate tax rules. It recommends that Member States enact temporary measures to mitigate high energy costs and use revenues to provide relief to SMEs. Further, it calls on the Commission to evaluate action taken since 2011 in relation to corporate taxation with a focus on how best to ease administrative burdens on businesses. It also recommends the Commission propose further enhanced cooperation between tax authorities on best practices concerning the use of technology in improving tax related administrative procedures.

EU Set to adopt e-Assets Tax Reporting Rules

The European Union finance ministers have adopted the DAC8, new transparency and reporting framework related to crypto-assets and electronic money, at a meeting in Luxembourg. The ECOFIN Council will adopt the revisions to the Directive on Administrative Cooperation, on basis of the European Commission proposal of 8 December 2022 related to the Council directive amending Directive 2011/16/EU on Administrative Cooperation in the field of taxation (DAC8).

The European Parliament adopted an opinion on 13 September 2023 under the EU legislative consultation procedure, whereas the Council of Ministers on 16 May 2023 reached a political agreement, adding requirements for exchange of information on advance tax rulings for wealthy individuals. The final outcome of this legislative process is decided by EU Member states in the Council, by unanimity.

EU List of Non Cooperative Jurisdictions Updated

The ECOFIN Council has updated the list of non-cooperative jurisdictions, adding Antigua and Barbuda, Belize and Seychelles. At the same time, three of the jurisdictions which were added to the list in February 2023 were removed from the list: British Virgin Islands, Costa Rica and Marshall Islands.

With these updates, the EU list consists of the following 16 jurisdictions: American Samoa; Antigua and Barbuda; Anguilla; Bahamas; Belize; Fiji; Guam; Palau, Panama; Russia; Samoa; Seychelles; Trinidad and Tobago; Turks and Caicos Islands; US Virgin Islands; Vanuatu.

Momentum Builds Behind Africa Group Initiative for UN Tax Convention

A meeting was held at the United Nations Headquarters in New York to discuss the Africa Group’s call for a UN Tax Convention. The matter was discussed under the United National General Assembly Second Committee Draft Resolution on Promotion of Inclusive and Effective International Tax Cooperation at the United Nations.

The UN General Assembly is aiming for the “establishment of a Member State-led, open-ended ad hoc intergovernmental committee to elaborate a comprehensive UN Tax Convention”. The matter is being approached as one of high priority, with a tentative deadline to finish the UN Tax Convention by June 2025. The proposed international cooperation is to have a “comprehensive UN Tax Convention with a holistic scope and sufficient flexibility and resilience to continuously ensure equitable results as the international tax cooperation landscape evolves, establishing clear links between international taxation and other key UN agendas and ensuring the full and effective participation of civil society in the intergovernmental UN tax process to develop a new UN Tax Convention”. A concept note setting out international support for the UN Tax Convention can be found here.

48 Countries set to Implement OECD Tax Transparency Standards for Crypto Assets by 2027

48 countries and jurisdictions have committed to implementing the OECD’s Global Tax Transparency Framework for the reporting and exchange of information with respect to crypto-assets by 2027. The Crypto-Asset Reporting Framework (CARF) is a key component of the International Standards for Automatic Exchange of Information in Tax Matters developed by the OECD under a G20 mandate. It provides for the automatic exchange of tax-relevant information on crypto-assets and comes against the backdrop of a rapid adoption of the use of crypto-assets for a wide range of investment and financial uses.

Harmful Tax Practices Updates (EU and OECD)

The OECD has published an update on the work concerning the implementation of
the minimum standard on countering harmful tax practices within the members of the BEPS Inclusive Framework, as agreed with the BEPS Action 5. According to the OECD, jurisdictions continue to make progress in addressing harmful tax practices, with the total number of regimes reviewed by the Forum on Harmful Tax Practices reaching 322 with over 40% of those regimes being abolished or in the process being abolished.

Source: Malta Institute of Taxation Click here, CFE Tax Advisors Europe Click Here

Please contact David Marinelli should you wish to discuss any matter relating to your Malta registered company.

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