MBB impact assessment concludes that tax proposal is detrimental to Malta

Following the recent completion of an impact assessment on the European Commission proposal for a Common Consolidated Corporate Tax Base (CCCTB) commissioned by the Malta Business Bureau (MBB) and Bank of Valletta plc (BOV), the MBB has meticulously analysed the study and concluded that it would be detrimental for Malta.

“The CCCTB proposal undermines the competitive edge of EU economies such as Malta, which are reliant on the use of corporate taxation, amongst other factors, for attracting overseas business investment,” said MBB president George Vella. “Furthermore, it is very likely that Malta will be placed at a disadvantage from a public revenues’ perspective, when the share of the consolidated tax base is attributed to member states, due to the fact that the composition of the Commission’s CCCTB formula – based on companies’ tangible fixed assets, employees’ payroll costs and the revenues generated in a particular state – will ostensibly favour member states endowed with larger-scale manufacturing endeavours rather than services-oriented economies,” he continued.

Apart from specific member states, the EU as a whole could also possibly witness an exodus of business that would start looking for better fiscal treatment in third-country jurisdictions.

The MBB’s position on the CCCTB was communicated in recent weeks to both the government and the Opposition. The MBB is encouraging the government, the Opposition and the social partners to take a unified strong position against the proposed CCCTB directive.

In this respect the MBB and BOV are holding a seminar on Tuesday, 19 June to inform the business community of the impacts that CCCTB could have on Malta.

The seminar’s keynote address will be a presentation on the CCCTB by the authors of the study, PricewaterhouseCoopers, following which ample opportunity will be then given to the floor for questions.

The seminar will also see presentations from Austin Demajo – Tax Partner Grant Thornton and member of the Taxation Committee Malta Institute of Accountants, on the practicality of adopting a CCCTB system in Malta; and from Ms Juanita Brockdorff – Tax Partner KPMG who, on behalf of Finance Malta, will deliver a presentation on the prospective effects of the draft CCCTB directive on the financial services industry.

The seminar is aimed at financial controllers, auditors, accountants, general managers, CEOs and tax consultants, as well as other interested stakeholders. It is being held on from 9 to 11am on Tuesday, 19 June, at the BOV Centre, Santa Venera. For registration and more information contact the MBB on [email protected] or tel. 2125 1719. The event programme can be viewed on www.mbb.org.mt

The proceedings will be held in English.