OECD – Proposed Corporate Tax Deal Could Impact Thousands of Local Jobs
MALTA (November 30, 2021) — According to local media reports, in January 2023 Malta is expected to be forced to adopt a global minimum tax rate imposed by the Organisation of Economic Cooperation and Development (OECD).
Malta has reportedly already signed up to the principle of an OECD minimum rate, which should be drafted into law next year for implementation at the start of the following.
Government sources said the matter was recently discussed when ministers met at the Auberge de Castille for their weekly cabinet meeting.
While Malta has agreed to the OECD plan, the matter is still up for discussion at the EU level, where the island is hoping to negotiate for “carve-outs and concessions” that could limit the island’s exposure, the sources said.
The new rates are an OECD bid to clamp down on countries like Malta competing to offer the lowest rates.
The rates will also apply to companies with annual revenues in excess of €750 million.
The OECD estimates that this will generate around €130 billion in additional global tax revenues annually.
Government sources working on the island’s taxation game plan said that between 18 and 20 international companies, which employ thousands of people in lucrative industries such as gaming and corporate services, could see their tax exposure increased from five to 15 percent.
Malta has one of the highest statutory corporate tax rates in the world, taxing 35 percent of end-year company profits.
However, the island attracts foreign investment by offering overseas companies a series of rebates and benefits that allows them to bring their corporate tax rate down to an effective five percent.
SOURCE: Times of Malta.Tags: Malta, tax rates