MALTA: ‘Malta needs to tackle potential abuses of its tax system’ – EU Council report.

Added on 06/06/2019

As published on, Wednesday 5th June, 2019.


Malta needs to address the areas of its tax system that have the potential to allow individuals and multinational organisations to carry out ‘aggressive tax planning,’ a recommendation by the Council of the European Union reads.

A new EU council recommendation report focused on the 2019 National Reform and Stability Programmes for Malta states that, the country needs to improve it structures and processes for dealing with corruption and money laundering.

While recognising that Malta has taken steps on these evasion strategies, the report also outlines that companies have the ability to exploit the current rules on outbound payments.

They state that, ‘the high level of royalty and dividend payments as a percentage of GDP suggests that Malta’s tax rules are used by companies that engage in aggressive tax planning. The absence of withholding taxes on outbound (i.e. from EU residents to third country residents) dividends, interest and royalty payments made by Malta based companies may led to those payments avoiding tax altogether, if they are not subject to tax in recipient country.’

The recommendation comes to light following numerous reports published by European bodies including the Council of Europe and high profile revelations within Malta, bringing attention to a lack of action to investigate allegations of corruption and tax evasion.