Malta narrowly avoids ‘tax haven’ label in stalemate EP vote

Malta narrowly avoided being labelled as a tax haven during a stalemate vote at the European Parliament this afternoon.

A total of 327 MEPs voted in favour of an amendment to the Panama Papers inquiry report, proposed by the socialists, while 327 voted against.

All Maltese MEPs voted against the amendment, which called for the European Commission to regard Malta, Luxembourg, Ireland and the Netherlands as tax havens.

Socialist MEP Jeppe Kofod, a co-rapporteur of the Panama Papers report, said yesterday that the proposed amendment had caused a “split” within many of the political groupings.

Sources said Pana chairman Werner Langen, from the EPP, argued in favour of the amendment, but the EPP as a whole shied away from the socialist’s “naming and shaming” policy.

Malta has come under increasing pressure to reform its tax regime over the past few years.

On paper, the country offer a 35 per cent tax rate for foreign-owned companies.

This is then reduced to an effective rate of five per cent once the companies apply for a 6/7ths tax refund from the government. 

Critics of the system question both the fairness of eating away at other countries' tax bases, as well as its role in...