Updated 4.45pm
The European Commission is looking into Maltese VAT schemes which it believes could violate EU taxation rules, French newspaper Le Monde has reported.
High among Commission concerns are a scheme whereby Maltese companies can purchase a yacht and lease it to a third party, allowing them to pay VAT at a substantially reduced rate.
Through the scheme, a client can register a Maltese firm and use it to buy a yacht and bring it to Malta. The yacht is then leased to a third party.
Once the lease agreement ends, the third party buys the yacht for one per cent of its purchase price, paying the minimum in VAT and then able to move freely around the EU.
The scheme effectively brings VAT payable down from 18 per cent to as little as 5.4 per cent, depending on the yacht's size.
According to the French paper, Commissioner Pierre Moscovici first wrote to Maltese authorities last month and asked them for clarifications about the scheme.
Mr Moscovici's request for clarifications is the first step in the process leading to infringement proceedings against a member state.
Speaking off the record, a Finance Ministry source said that the Maltese scheme was modelled on similar yacht leasing schemes in place in many other EU jurisdictions, including, Italy, Holland, Luxembourg and, somewhat ironically, France.
Le Monde reports [paywall] that Brussels began a series of investigations into Maltese taxation schemes following last May's Malta Files leak, published by the European Investigations Collaborations.
The Malta Files included information about over 70,000 companies listed in Malta's public company register.
The French newspaper says the Commission has sought information about "several" financial schemes but only cites the aforementioned yacht leasing scheme in its report.
Malta's yacht taxation scheme was highlighted in a story about a Ukrainian high-roller and former MP published by the OCCPR this week.
In it, the OCCPR reported how Anton Prygodskyy saved an estimated €3 million in taxes on a yacht worth €13 million by using Maltese companies.
Isle of Man
Apart from queries about Malta, the European Commission has also raised concerns about offshore registration in the Isle of Man, a British autonomous territory which has featured prominently in the first series of revelations stemming from this week's Paradise Papers leak.
Citing Commission sources, Le Monde says an Isle of Man scheme for private jet ownership is effectively allowing investors to avoid paying VAT by registering the jets as being for commercial use.
EU states are set to discuss plans for a tax haven blacklist following the Paradise Papers data leak released by the International Consortium of Investigative Journalists on Sunday.
The matter was added to the agenda of a monthly meeting of EU finance ministers on the back of continental uproar about the revelations, which showed how wealthy individuals and corporations use complex structures in various jurisdictions, including Malta, to avoid tax.
Measures proposed by the European Commission include an EU-wide list of tax havens meant to discourage the rerouting of profits made in the EU to tax-free or low-tax countries - a measure likely to be resisted by member states such as Malta, Luxembourg and Ireland, which rely on tax competitiveness to attract investment.