Malta ranks in 21st place out of 41 countries listed in a confidential analysis of FTSE 100 companies who have subsidiaries in “tax havens”, with only 30 companies registered here, out of 8,311.
The first four countries – US (Delaware), the Netherlands, Ireland and Jersey – between them accounted for 5,182 of the subsidiaries, almost two out of every three.
The staggeringly complex nature of international corporates can be seen from the report, which found that some companies have literally hundreds of subsidiaries in the 41 domiciles analysed. Advertising company WPP tops the list with 618.
The FTSE 100 analysis came to light as The Sunday Times of Malta was investigating the possible backlash for Malta of a plan announced by British Business Secretary Vince Cable to force companies to list their ‘true’ owners on a public register.
The list would be used by tax authorities to tackle the “darker side of capitalism,” he said, citing concerns that opaque UK corporate structures can be used to channel or hide illicit funds. The plans will need to be approved by the British parliament.
Malta is an onshore jurisdiction , not an offshore tax haven, and sources confirmed that it is complying with all the recent procedures being introduced to ensure tax is not evaded, such as exchange of information with other tax authorities, as well as procedures to expose money-laundering.
This was also confirmed by local service providers who said that while the Cable plan would not detract from Malta’s attractiveness as a jurisdiction, the tightening of exchange of information rules was already having an impact on the way corporate structures were spread across different jurisdictions.
“The (Cable) measure should not have direct consequences for Malta, in the sense that where any shares in UK companies are held via Malta (holding) companies, the ownership of such Malta companies is normally visible via the Malta Registry of Companies to all and sundry,” Alter Domus director Michael Ellul said.
“Malta’s popularity as a holding company regime is not dependent, or built on, the availability of ‘secrecy’ to the shareholders of such Malta companies, and Malta is generally considered as a co-operative jurisdiction in this sense.
“What is also true is that the international community is currently endeavouring, in a stringent and concerted effort, to reduce the leakage of tax revenue via aggressive tax planning, and the OECD is currently in the process of implementing 15 action steps [between September 2014 and December 2015] in this regard. These include measures intended to curb treaty (double taxation treaty) abuse and others, and it is impossible that such action points will not have some impact on the way that international business is currently conducted and thereby have some impact on the international transactions conducted in Malta or by Malta-registered companies.”
Sources said there were only a limited number of British companies which had subsidiaries in Malta, and confirmed that there was a “healthy” exchange of information on them with the British tax authorities to ensure Malta was not used for either tax evasion or money-laundering.
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