The European Parliament’s financial crimes committee has concluded that Malta, together with six other EU member states, displays “traits of a tax haven” while also facilitating “aggressive tax planning”. 

In a report which has just been adopted, the Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3) listed a series of recommendations as part of efforts to ensure “fairer and more effective taxation” and better tackling of financial crimes.

It noted that the European Commission had criticised seven member states – Malta, Belgium, Cyprus, Hungary, Ireland, Luxemburg and the Netherlands – for shortcomings in their tax systems, adding they “can be considered as jurisdictions facilitating aggressive tax planning globally”.

The report will now be passed on to the European Parliament for discussion during the second March plenary session in Strasbourg later this month.

The committee also called for the so-called golden visas and passports to be phased out as these were deemed “problematic”.

Read: MEPs urge EU Commission to regulate golden visa programmes

On the island’s cash-for-passports scheme, the committee noted that, together with Cyprus, Malta operated a programme that potentially posed “a high risk to the integrity of common reporting standard”.

Citizenship schemes like the one operated in Malta have long come under fire by European institutions. In January, the European Commission had said in a report that such schemes posed security, money-laundering and corruption risks. MEPs have, on several occasions, urged the Commission to regulate such programmes, arguing it was no longer acceptable to dismiss the issue as a national one.

Fielding questions from MEPs at an exchange of views during a TAX3 meeting last month, Justice Minister Owen Bonnici described Malta’s scheme as one of the most transparent, saying the government published the names of individuals who obtained citizenship and carried out rigorous due diligence checks, which, he said, were also public.

Read: Fact-checking Owen Bonnici's claims to MEPs

Names of those who obtain citizenship through the scheme are included in a general list of people who become Maltese citizens over a one-year period. The list, published by the government, does not identify which of these new citizens bought Maltese and EU citizenship under the cash-for-passports scheme.

According to figures published by Eurostat this week, 23.5% of the citizenships were granted to people from Russia, followed by those from Saudi Arabia (17.3%) and the United Kingdom (9.9%).

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