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Malta Business Review ECONOMY: TAXATION Overview: the European Parliament's work on taxation Check out our infographic to compare taxation levels across the EU- Our infographic above shows the income from direct and indirect taxes for each member state as well as total tax revenue as a percentage of the gross domestic product. The latter is divided between taxes on capital, consumption and labour. In addition our map shows how wealthy countries are. The fight for fair taxation in the EU has been high on Parliament's agenda long before LuxLeaks and the Panama papers. Since the start of the economic and financial crisis, MEPs have been pushing for greater transparency and an end to tax unfair practices. Read on for our overview of Parliament initiatives. The committees dealing with tax issues The economic and monetary affairs committee is the legislative committee in charge of tax policies and continues to work on the European Commission's legislative initiatives in the area of taxation. Parliament has also set up two temporary special committees to look into tax rulings and is in the process of launching an inquiry committee to investigate the Panama papers. Tax rulings are written statements issued by a tax authority, setting out in advance how a corporation's tax will be calculated and which tax provisions will be used. Tax rulings have sometimes been criticised when multinationals used them to agree discretionary or preferential tax treatment with a country. Parliament has set up two special committees to look into them. Last November the first special committee on tax rulings published its final report, setting out ideas for fair and transparent taxation across the EU. Its work is continued until July 2016 by the second tax rulings committee. Launched in December 2015, it continues the work of the first special committee to identify the necessary steps to fight corporate tax avoidance. Following the revelations in the Panama papers, Parliament decided to set up an inquiry committee. Its mandate will soon be confirmed during a plenary session in Strasbourg. Work so far Recommendations to fight aggressive corporate planning were adopted by MEPs in December 2015. This report by the economic committee spelled out the legal steps that the EU and the member states should take. It was based in part on the work of the first tax rulings committee. Among others, Parliament called for the European Commission to produce a legislative proposal n country-bycountry reporting of companies' profits, tax and subsidies. As a result the Commission announced its plans in April 2016. MEPs also demanded an EU-wide definition of tax haven and the Commission is currently working on a proposal. In May 2015 MEPs adopted tougher rules on money laundering. The fourth anti-money laundering directive will oblige member states to keep central registers of information on who owns companies and other legal entities.EU countries have until 26 June 2017 to implement the new legislation. The Panama papers underlined the importance of these new rules. Parliament was also consulted on a proposal on the exchange of information on tax rulings between EU countries. The Council adopted the directive last December. Parliament called the Council's deal a "missed opportunity" as the new rules only apply to cross border rulings but leave out tax deals within member states. MEPs also criticised the fact that the Commission was only given limited access to the information. Parliament is being consulted on corporate anti-tax avoidance measures. This legislation is the EU's response to the OECD's action plan to tackle base erosion and profit shifting. This refers to tax planning strategies that exploit loopholes in the international tax system to artificially shift profits to places where there is little or no economic activity or taxation, resulting in little or no overall corporate tax being paid. The EU's plans contain six key measures which all EU countries should apply. One of the measures, for example, is to prevent profits being shifted to a country with lower or no taxes. MEPs are due to vote on Parliament's position in June. In addition Parliament is being asked to voice its views on plans concerning tax authorities exchanging tax reports by multinationals that have global revenues of more than €750 million. According to the proposal, these large multinationals have to file a country-by-country tax report in the member state where the parent company is legally based. This member state must then share this information with other member states where the company operates. Parliament's economic committee has called for the Commission to have full access to this information. MEPs are due to vote on the Parliament's position in May. Parliament plays a key part in public transparency rules for multinationals. Multinationals with global revenues of more than €750 million would have to make information on where they make their profits public and also where they pay their taxes in the EU on a country-by-country basis. MEPs asked for this in the report adopted in December mentioned previously and as a result the Commission published a report on this in April. It is not known yet when MEPs will vote on the plans in plenary. Later this year the Commission is planning to propose legislation on a common corporate tax base. In addition it is expected to publish a proposal on a common list of non-cooperative tax jurisdictions, more commonly known as tax havens. <strong>MBR</strong> Creditline: EP/Economics 42
GOZO Malta Business Review Gozo wins the prize of best to sustainable destination in the Mediterranean The Minister for Gozo Justyne Caruana welcomed international honor for the island. Gozo won the prize of best sustainable destination in the Mediterranean. This award was announced at the renowned fair of tourism ITB Berlin, Germany, and is given by Green Destinations, an international organization promoting sustainable tourism. A total of 100 have been identified destination and with 32 finalists; 10 places were eventually recognized by their region. Gozo won the prize in the Mediterranean region. Gozo was a finalist for this award in 2017 after it was included in the list of 100 worldwide destination set to meet sustainability criteria. Gozo as a destination competed evaluate cultural initiatives and the identity of its communities. In this way, the island encourages initiatives in the villages to Photo: MGOZ- Terry Camilleri keep alive the identity of the place, in order that the traveler has a unique experience of the destination. While this is part of a strategy to attract quality tourists, Gozo has an opportunity to enjoy widespread sustainable tourism benefits to island communities. The kirterji of this award are set by the Global Sustainable Tourism Council. The Council is recognized by the UNWTO, the Tourism of the United Nations Organization, and establish international criteria for sustainable tourism on both operational as well as policy making. Justyne Caruana said that such a prize it, to aġġidukat a professional and independent jury, do honor not only our country but also Gozitans themselves contributing to this success. She stated that through these Gozo name honors continue to rise on the international scale and is recognized as a destination that offers authentic experience to travellers. The Minister Caruana said how 2017 was a record in the tourism sector where the amount of foreign tourists who visited Gozo amounted to 215 184, an increase of 13% over the year 2016. She said that is optimistic that Gozo this year also seeing an increase on the amount of foreign tourists visiting the island as indicated by unofficial figures. <strong>MBR</strong> Creditline: Gozo Ministry WE DETECT WATER LEAKS! Non destructive testing of water leakages . trace Minimize cost of damage of and access water leakage. Repairs services. Call us on 79839810 CONSULTANCY • INNOVATION www.maltabusinessreview.net 43
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