Staff numbers at the Inland Revenue Department's International Tax Unit have been boosted to better meet the increasing needs of financial services operators, the Parliamentary Secretary for Small Business, Jason Azzopardi, told delegates at the annual international tax conference on Tuesday.
The unit was established as part of Malta's drive to become an international finance centre of repute in the early 1990s. Dr Azzopardi praised its sterling contribution in servicing financial services firms, developing Malta's double tax treaty network, and relations with foreign tax authorities.
Opening the conference organised annually by the Malta Institute of Management at the Corinthia San Ġorġ Hotel in St Julian's, Dr Azzopardi said Parliament was currently debating a series of amendments to the Maltese international tax provisions in the Income Tax Act which aimed to make the international tax system more competitive and user-friendly.
"Such international tax amendments have been developed in consultation with the practitioners in this sector who continuously give solid feedback relative to the manner in which the Maltese tax system can be updated so as to respond better to current needs," he said.
The tax conference was themed 'Latest developments on the OECD EU and Maltese fronts'.
Dr Azzopardi said that although the administration's emphasis was mainly on having a sound, respected, efficient regulatory approach, the government was also aware that having a tax system which does not impose an unreasonable burden on activities carried out in Malta and which grants efficient relief from double taxation was a necessary back-up in attracting operators of repute to the country.
He also reiterated the government's commitment to maintain an income tax system based on the full imputation system of taxation of dividends and on principles which are aimed at ensuring that investors are not subjected to economic and juridical double taxation.
"Although the Maltese tax system is based on tried and tested principles which have been in place for decades, the government is aware that keeping up-to-date with international developments requires that we constantly keep under review our legislative framework." Dr Azzopardi said.
Double taxation agreements continue to be another priority. New treaties have entered into force over the past year, including with Georgia, Montenegro, Qatar and United Arab Emirates. Negotiations have been held with other jurisdictions such as Jersey, Oman and Saudi Arabia.
By the end of this year, Malta will be holding talks about the possibility of a similar agreement with Hong Kong. This will be the fifth DTA for Hong Kong, and the first in the Euro-Med.
Efforts are also ongoing to open up new treaty opportunities in continents in which Malta has until now been relatively absent, particularly countries in Central and South America.
Most of Malta's tax treaties have been negotiated with OECD member states, many important trading partners. The OECD Model Convention often remains a useful starting point in most treaty negotiations, even with those jurisdictions which are not OECD members, Dr Azzopardi said.