Malta’s tax imputation system is expected to survive efforts by the EU to clamp down on tax avoidance – with only some changes to close loopholes, Finance Minister Edward Scicluna said.

Malta has been reassuring the European Commission that it would take a stand against tax avoidance, but has lobbying vociferously for the system – which was introduced after World War II – to be retained, while admitting that there were “doors that needed to be closed”.

Prof. Scicluna said during a media briefing that almost all the member states had similar loopholes, some of them very specific and technical. However, Malta’s system was very clear as it was consistent and did not discriminate.

“We have all heard how some companies negotiated their own tax rates with countries. We do not do that here,” he said.

Malta has received confirmation in writing that the directive will not target existing tax systems.

The directive, which has to be put into national legislation by 2019, lays down rules against tax avoidance practices, addressing a number of important new developments and political priorities in corporate taxation that require quick reaction at the level of the EU.

It is ultimately the Commission’s response to  initiatives by the the G20 and the OECD, as well as to demands from the European Parliament, several member states, businesses and civil society, and certain international partners for a stronger and more coherent EU approach against corporate tax abuse.