Malta’s tax base will be halfed with a new EU proposal on tax harmonisation which has been agreed and approved by the Economic and Monetary Committee of the European Parliament (ECON) and which will be voted on by the European Parliament at the March plenary session. A report by ‘Tax Justice Network’ (TJN) states that Malta could lose more than half its corporate tax base if the European Commission adopts the proposed tax measures.

The  report reveals that a "diverse group of small EU countries, including the Czech Republic, Portugal and Sweden might expect their corporate tax bases to shrink by around one third, with the tax base of Malta, Slovenia and Estonia declining more than half in terms of their loss-consolidated tax base due to formulary apportionment in the CCCTB scenario.” The ‘Tax Justice Network’ is an advocacy group of researchers and activists with a shared concern about tax avoidance, tax competition and tax havens.

ECON approved reports on The ‘Common Corporate Tax Base’ (CCTB) and the “Common Consolidated Corporate Tax Base” (CCCTB). The reports aim to create a single EU corporate tax regime across all EU member states which is not in Malta’s interests. MEP Alfred Sant voted again both reports. Other MEPs from small EU member states, including Cyprus and Ireland, also voted against. Nothwithstanding this, both reports were approved with a comfortable majority.

Sant told the S&D Group, which backed these proposals, that he agrees with elements within the two proposals such as measures to enhance tax transparency or to better define digital presence in the EU.  But he emphasised that he strongly disagrees with the principle of a common EU taxation system.

“A common EU taxation system undermines the sovereignty of national EU governments in the decision and implementation of taxation policies in their respective countries. For this reason I am voting against the two CCCTB reports.”  remarked the Maltese MEP.

The planned “Common Consolidated Corporate Tax Base” (CCCTB) was approved by 38 votes to 11 votes, with 5 abstentions. A separate, complementary measure which creates the basis for the harmonised corporate tax system -- the Common Corporate Tax Base  -- was approved by 39 votes to 12, with 5 abstentions.