Malta branded ‘Panama of Europe’ after anonymous tip-off

File photo. A view from Malta. [Shutterstock]

An anonymous tip has alerted German authorities to the existence of 70,000 offshore companies registered in Malta. Tax investigators now want to share that data with other countries. EURACTIV’s partner Italia Oggi reports.

Malta has been branded the “Panama of Europe” by one of Germany’s regional finance ministers, Norbert Walter-Borjans, after tax investigators in North Rhine-Westphalia (NRW) took delivery of an anonymous tip-off.

On Wednesday (10 May), tax authorities in Wuppertal were given a USB drive containing the names of 70,000 foreign companies registered on the small Mediterranean island.

Walter-Borjans revealed that some 2,000 German citizens and companies are registered in Malta and that national authorities had long suspected that German companies, economically linked to the island, were attempting to evade taxation.

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NRW’s finance minister also said, in a press release, that “the information shows how companies and private individuals, located on the Mediterranean island, use shell companies to bypass taxes in Germany”.

“This is, in part, possible thanks to legal tricks but, to a greater extent, through the use of offshore companies,” he continued. Walter-Borjans added that he is eager to share the data about the “Panama of Europe” with all other countries involved.

Maltese Finance Minister Edward Scicluna refuted the allegations of his German colleague, claiming that his country has a public register of all companies, which currently totals 53,000.

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He admitted that the register has, in the past, topped 80,000 but that this number has fallen due to a willingness to cut the number of offshores on Maltese soil.

The Maltese minister also claimed that it “is obvious that those who are making these claims are ill-informed”, as well as highlighting that Malta applies a 35% corporate tax rate (85% of which can be claimed back) that is in line with EU and OECD standards.

This isn’t the first time Germany has taken aim at Malta’s tax regime. Back in 2015, the Bundesrepublik reported that many German gaming companies were exploiting its favourable tax breaks. Authorities concluded that German betting companies have to pay their VAT in Germany if their customers are German.

Walter-Borjans is garnering a reputation as a crusader in the fight against tax evasion. In 2012, his ministry purchased a CD full of data about the banking details of wealthy Germans.

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