Online gaming companies based in Malta have seen their share prices significantly drop following the news that a deal was struck by the Organisation for Economic Cooperation and Development (OECD) to establish a 15% minimum tax rate.
According to figures outlined by EGR, Evolution’s shares and Kambi’s sharess dropped by 6% following the announcement.
Kindred Group’s shares took an initial tumble – however, it has actually gathered pace since then and has seen its share price improve over the last two days.
On 8th October, the Maltese government was one of 136 countries and jurisdictions that form part of the landmark agreement – which is planned to come into effect in 2023.
It will apply to companies with an annual revenue above $750m per year – and is predicted to generate some $150 billion in tax revenue across the world.
Despite forming part of the agreement, Malta’s Finance Minister Clyde Caruana has said that he holds reservations over the deal and that the country will be filing counter-proposals.
“Every country is bowing its head to the agreement. This is because even if no other country agrees on it, countries can still tax the difference between what Malta taxes locally and that 15% elsewhere,” Caruana told Malta Today.
Malta currently has a 35% corporate tax rate – however, a tax-rebate system provided to companies owned by non-residents sees some operators in Malta pay roughly 5% corporate tax.
Malta is not the only country with these concerns with Ireland regularly facing criticism over its tax rate.
The schemes do attract businesses to the country but they have courted controversy in some of the wealthiest democracies in the world.
The agreement will eventually be discussed at EU level and could be implemented into a directive for the bloc.
What do you think of the figures?