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Data leak reveals details of 70,000 offshore firms in Malta, German state minister claims

Malta denies claims

Mr Walter-Borjans slammed Malta's fiscal regime. Photo: Wikipedia

Mr Walter-Borjans slammed Malta's fiscal regime. Photo: Wikipedia

Updated Thursday am with ministry statement

A data leak has revealed information about 70,000 offshore companies in Malta, a German state minister claimed this morning. 

North Rhine-Westphalia finance minister Norbert Walter-Borjans said the data also included information about several German corporations and up to 2,000 German taxpayers. 

Tax authorities in the city of Wuppertal obtained the data through an anonymous source, German journalists reported on Twitter. 

Mr Walter-Borjans described Malta as "the Panama of Europe," according to WDR correspondent Philipp Menn, who tweeted from the press conference announcing the leak.

He said the NRW government would be passing on data about foreign corporations mentioned in the leak to their respective governments. 

"The data reveals how corporations and private persons on the Mediterranean island use company braids to bypass tax in Germany in a big way," a press release issued by Mr Walter-Borjan's ministry said. 

"This is partially done with legal tricks, but often also by means of offshore companies, which serve exclusively as tax evasion constructions." 

Mr Walter-Borjans said he was keen to share information about "the Panama of Europe" with other countries, and explained Malta's tax rebate system to journalists present. 

'Pull another one' - Finance Minister Scicluna

Finance Minister Edward Scicluna dismissed Mr Walter-Borjan's claims and suggested that the German politician was guilty of hyperbole. 

"Pull another one," Prof. Scicluna wrote on Twitter. "Since when the whole Maltese company register of Maltese registered companies becomes foreign, offshore and German?"

Malta operates a full imputation tax system, with companies taxed at a standard 35% rate but shareholders' dividends subject to an 85% rebate on tax paid, effectively bringing the payable tax rate down to 5%. 

Maltese governments have stridently defended this system throughout the years, insisting that fiscal sovereignty is the remit of individual member states and that Malta, like many other EU member states, is within its rights to operate a competitive tax system. 

Prof. Scicluna has also emphasised that Malta's fiscal regime is in line with EU and OECD standards, including the EU's anti-tax avoidance directive agreed to last year. 

READ: Calling Malta a tax haven is 'a caricature', says Scicluna

Critics say the system allows firms to effectively use Malta as a tax haven, shifting profits to a Malta-registered holding company and thereby paying minimal amounts of tax. 

Mr Walter-Borjans drove home these criticisms this morning, saying data exchange and tax treaties were of little use when faced with structures like Malta's.  

"Often, these offshore companies are set up to transfer profits or assets abroad to the German Treasury and to hide them in inactive mailbox companies," he said. "Time and again, the investigators also come across company models that were created with the purpose of bypassing corporate taxes in Germany."

Tax troubles

This is not the first time German tax authorities have been critical of Malta. Back in 2015,  authorities had reportedly written to several locally-based remote gaming companies enquiring about their tax affairs

German tax authorites argue that foreign-based gaming operators targeting German consumers should be subject to German VAT and sports betting taxes.

Claims denied

In a statement on Thursday morning, the Finance Ministry denied the claims saying the register of companies was a public register available to the public online, through the website http://registry.mfsa.com.mt. 

It said the number of companies registered over the years had reached around 80,000, of which, 53,000 were still on the register. The others had been dissolved or struck off.

Malta, it said, did not have an offshore company register.t

"It is, therefore, clear that whoever is making such claims is grossly misinformed," it said.

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