Malta will await the fine print before pronouncing its position on a landmark agreement by the G7 club of wealthy nations in favour of a global minimum corporate tax rate of 15%.
Questioned by Lovin Malta about this idea, Finance Minister Clyde Caruana said the proposal is currently just an agreement in principle and that a final version should be fleshed out towards the end of the year.
“Discussion in Europe is slowly starting to take form… as Finance Minister, I want to ensure that the proposal doesn’t impact the country badly,” he said.
“We need to get into the details of the proposal though – it’s not just about the tax rate but also about the thresholds [ie. a company’s level of income before this proposal will kick in].”
“As Finance Minister, I can say that I’m against the introduction of such a tax, but what would it mean if the other countries will be able to reclaim the difference between our tax and the minimum amount?”
“I must see the full proposal because ultimately I must ensure it suits our country… when I can see the proposal, we’ll take a position.”
Earlier this month, the G7 nations and the EU agreed in principle to set a global minimum corporate tax rate of 15% and make companies pay more in the countries in which they operate.
While Malta has a corporate tax rate of 35%, its full imputation system allows foreign businesses to benefit from significant rebates on dividends.
Back in February, Caruana admitted that Malta was left with only three EU allies – Ireland, Cyprus and Luxembourg – in its resistance to EU-wide minimum taxation levels and that the island must be open to implementing changes favouring tax transparency.
Cover photo: Left: Finance Minister Clyde Caruana, Right: The recent G7 meeting (Photo: Screenshot from Rishi Sunak’s video: G7 Finance: How the Deal was Done)