While Malta did not agree with the European Commission's proposals on digital taxation for products to be taxed where they are consumed, another proposal was interesting but needed to be delved into further, Prime Minister Joseph Muscat said on Thursday.
Speaking in Brussels, he said the idea of taxing a product in the country it was consumed went against the idea of a common market.
The Commission's proposals are:
* to reform corporate tax rules so that profits are registered and taxed where businesses have significant interaction with users through digital channels; and
* for an interim tax which covers the main digital activities that currently escaped tax altogether in the EU.
The second proposal, Dr Muscat said, could be interesting if it was studied well. But more details were needed.
He said that the concept of digital taxation was an interesting one but first there had to be a clear explanation of what constituted a digital and a non-digital economy, something that was very difficult.
One also had to see that as the EU was requesting the US not to create trade barriers, such barriers should also not be created by European countries to US companies for the sake of consistency.
The EU should also not seem to be taxing innovation, as if this was something to be afraid of.
Dr Muscat expressed satisfaction that from among the European countries meeting to discuss growth and competitiveness, he led one of the countries with the highest rate of economic growth and employment in the European Union.
The challenge in Malta, he said, was to find workers.
He said leaders were agreeing to move another step in Brexit discussions, which were being led by common sense although the two parts were looking to safeguard their interests.
The Prime Minister said that any agreement with the United Kingdom should always be reached in respect to European legislation. He said that no progress was made regarding frontiers between Northern Ireland and the Republic of Ireland and this was the only issue on which agreement still did not seem likely.