Greens MEP Sven Giegold on Thursday warned a new European Parliament committee would investigate citizenship sale schemes like Malta’s, as part of a wider probe into financial crimes, tax evasion and avoidance.
In a statement, Mr Giegold said “distorting privileges” like residency and citizenship schemes offered by Malta, Portugal, Italy, the UK and Cyprus would be investigated.
Malta’s citizenship programme has long been in the sights of the EP, ever since 89 per cent of MEPs voted against Maltese selling EU citizenship back in 2014.
Recently, a cross-party group of MEPs called on the European Commission to assess the implications of the scheme through which Malta sold European citizenship and Schengen residence permits.
The new EP committee, known as TAXE 3, was set up in the wake of the Paradise Papers leak.
The committee should encourage EU countries to put their own house in order
Malta featured prominently in those papers after a few celebrities, like Formula 1 star Lewis Hamilton, were found to have use the island to reduce their tax bills.
TAXE 3 has been given a mandate to assess how EU VAT rules were circumvented in the framework of the Paradise Papers and to evaluate the general impact of VAT fraud.
Last year, EU Tax Commissioner Pierre Moscovici wrote to the UK and Maltese authorities about VAT on yachts and private jets. Mr Moscovici has warned that infringement proceedings could be opened if the rules were not changed.
Malta is under scrutiny because of its rules on luxury yachts that slash the VAT rate applied to bigger ships on the grounds they are used mostly in international waters.
The government has defended Malta’s VAT rules.
Prime Minister Joseph Muscat has repeatedly rejected the labelling of Malta as a tax haven.
In a statement, global charity Oxfam hailed the EP’s willingness to tackle tax avoidance and push EU countries to adopt and implement the reforms needed to avoid an umpteenth tax scandal.
Oxfam said the committee should encourage EU countries to put their own house in order by ensuring they rapidly implemented all the EU tax legislation adopted over recent years, and by looking deeper at the harmful tax practices within Europe itself.