Malta, Germany update tax agreement

Malta and Germany this afternoon agreed to include a new protocol in the double taxation agreement to enhance transparency in the exchange of information.

Finance Minister Tonio Fenech said the aim of the protocol was to combat tax avoidance and evasion in line with Organisation for Economic Co-operation and Development recommendations.

He said Germany was a very important trading partner for Malta with exports to the country totalling around €261 million annually for the past five years and imports €271 million.

Malta and Germany had signed a double taxation agreement in 2001.

German ambassador Bernd Braun said Malta was not an offshore haven but a place for investment.

He said the new protocol would not hinder German investment in Malta, on the contrary it would provide the right framework for this to increase.

In reply to a question over media reports last year that Malta was an offshore haven for German companies, the ambassador said the tax authorities were scrutinising the matter and seeking to close all the loopholes.

However, the signing of the protocol was unrelated to those reports, he added.

Mr Fenech said it was clear that Germany did not consider Malta a tax haven. However, the country had to ensure its advantageous tax system was not abused.