The Malta Independent 17 December 2018, Monday

EU Company Law: tax advantages should remain national competence - Zammit Dimech

Friday, 7 December 2018, 12:47 Last update: about 9 days ago

“Tax advantages are vital to attracting economic activity to Malta’s shores. Thousands of jobs depend on such measures. This is why I have worked to ensure that EU company law does not affect our competitiveness. Nevertheless, the Maltese government needs to do its part not to shed a bad light on our reputation and fight money laundering and the setting up of secret companies in all possible manners.” 

MEP Francis Zammit Dimech made these remarks after the Committee on Legal Affairs adopted a report on Company Law. The original legislative text proposed by the European Commission suggested that the cross-border conversion of companies was to be prohibited by competent authorities if this was an arrangement aimed to obtain “undue tax advantages”. Zammit Dimech tabled amendments and obtained consensus from the other political groups to ensure that such text related to taxation issues is deleted.

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Resistance to these tax-related proposals has bi-party support and by numerous local stakeholders. “There is a consensus that tax systems should remain a sovereign competence of Member States” said Zammit Dimech. He recalled how during negotiations for EU accession the PN government had ensured that tax-related matters should remain of national competence. Zammit Dimech said that as Chairperson of the Committee for Foreign Affairs within the Maltese Parliament, he had worked on a report that clearly expressed objection to such policies.

“Tax policy is one tool to partly compensate for the natural and permanent disadvantages of Malta’s insularity and peripherality and ensures competitiveness in particular for the financial services sector” emphasised Zammit Dimech. He added that the gaming and financial services sector provided job opportunities and benefits to several Maltese and their families. “This is an example of how I defend the interests of Malta and the people of Malta at the European Parliament. My interest remains that to safeguard jobs of thousands of Maltese in financial and gaming sectors as well as thousand other people who depend on these sectors by means of accommodation and entertainment among others.”

Zammit Dimech added that while he was willing to safeguard the interests of people working and depending on such sectors, it was crucial for the government to also do its part. The delays made by the government to transpose the anti-money laundering directive and its constant failure to sack Konrad Mizzi and Keith Schembri following the Panama Papers scandal and the 17 Black revelations will continue to put Malta under scrutiny. “We need to pay attention not to cast a bad image on Malta as if there are bad connotations on Malta with money laundering all these people and jobs will be affected.”

Zammit Dimech said that the legislation per se remains a positive step as it will foster mobility of companies across EU member states and thus facilitate trade and increase jobs. The new legislation sets rules allowing companies to move, merge and divide across national borders and within the EU more easily while ensuring legal certainty and safeguards against fraud. The new rules ensure that such procedures will be cheaper, simpler, clearer and more effective. Rules also strengthen employees’ right to information and consultation along with enhanced measures to protect shareholders and creditors.

 

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