Malta involved in EU tax avoidance investigations
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Malta involved in EU tax avoidance investigations

The European Commission has requested information from seven member states in state aid cases involving taxation: Belgium, Cyprus, Ireland, Luxembourg, Malta, the Netherlands and Britain and has opened four in-depth investigations in Ireland, Luxembourg and Malta, European Commission Margaritis Schinas said today.

He was commenting  after a media report said it had found widespread tax avoidance in Luxembourg.

It was not clear what cases involved Malta. In 2010 the EU opened an in-depth investigation into Maltese plans to grant €15.5 million aid to the Delimara Power Station to support the modification of boilers at the power station.

The Commission later opened, and dropped, a case involving aid to Air Malta.

In 2012 an investigation was opened into  whether the Maltese (shipping) tonnage tax scheme was compatible with EU state aid rules.

The report today by the International Consortium of Investigative Journalists piled pressure on new European Commission head Jean-Claude Juncker to explain if he knew about the alleged tax deals during his 24 years as Luxembourg's prime minister or finance minister.

"The Commission is acting already," Mr Schinas told the Commission's daily news briefing, which was dominated by questions about the report.

Former EU Competition Commissioner Joaquin Almunia had opened a number of investigations into tax avoidance and his successor in the new Commission, Margrethe Vestager, would continue to act over the next five years to make sure EU state aid legislation was properly enforced, Schinas said.

Investigations the Commission was already conducting into tax schemes in several member states "in no way prejudge the opening of further investigations in the future or the deepening of the existing ones," he added.

The International Consortium of Investigative Journalists said more than 300 international companies had secured secret deals with Luxembourg to slash their global tax bills while maintaining little presence there.

Luxembourg Prime Minister Xavier Bettel said his country was not breaking any rules and it was not the only one to allow tax schemes by large companies.

TAX CONCESSION

The Commission said last month it was investigating a tax arrangement Luxembourg had with online retailer Amazon.com Inc . It said in September a tax concession Luxembourg authorities had granted to a subsidiary of Italian car maker Fiat may constitute illegal state aid.

Schinas said the Commission had requested information from seven member states in state aid cases involving taxation: Belgium, Cyprus, Ireland, Luxembourg, Malta, the Netherlands and Britain. It had opened four in-depth investigations in three member states, Ireland, Luxembourg and Malta, he added.

But Schinas avoided repeated questions about whether Juncker had been aware of the deals, referring such questions to the Luxembourg authorities.

He said Juncker would not take any role in the state aid investigation of Luxembourg, which is led by the competition commissioner, but he said Juncker would not abstain from any decision taken by the entire Commission that involved a Luxembourg tax deal.

"Mr Juncker is the president of the Commission ... He cannot abstain on something that he presides (over)," he said. Juncker pulled out of a Brussels conference he was scheduled to speak at today.

In September, the Commission accused Ireland of swerving international tax rules by letting Apple Inc shelter profits worth tens of billions of dollars from revenue collectors in return for maintaining jobs.

It is also investigating the tax treatment of US coffee chain Starbucks Corp in the Netherlands.

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