Any change in Malta’s corporate tax regime must ensure that foreign direct investment is protected, enterprise minister Miriam Dalli said.
Her comments come after finance minister Clyde Caruana said he prefers Malta make changes to its corporate tax regime now rather than wait for the EU to force its hand.
Asked on Monday about what that might mean for foreign direct investment (FDI) the enterprise minister said that any change would need to protect FDI.
“As Malta Enterprise we are in discussions with the finance ministry to ensure whatever we have in the country doesn't affect foreign direct investment,” she said.
Malta has one of the highest statutory corporate tax rates in the world, taxing 35 per cent 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 per cent.
But Malta’s tax regime is under pressure from the EU and the Organisation of Economic Cooperation and Development who are forcing through a global minimum tax rate of 15 per cent.
Dalli said that her ministry and the finance ministry are discussing “several alternatives” to the current state of play but declined to give more details.
Malta enterprise approved €75 million through a total of 103 projects in the last twelve months creating over 1,000 jobs, Dalli said.
Of those 29 projects were foreign and 74 were local, a ministry spokesperson added.
She was speaking on the site of what is soon to be a pharmaceutical plant.
The Torrent pharma site in Ħal Far, announced last year is expected to be completed by the end of 2023.
The €22 million investment is expected to create 120 jobs, Torrent Malta CEO Fredrick Schembri said.
Schembri was flanked by Amul Agrawal the company’s European vice president. He said that the facility is expected to be the company’s European hub and a logistical centre for sub-Saharan Africa.
He said that Malta always “punched above its weight” and said he was pleasantly surprised by the professionalism of Maltese officials.
Malta Enterprise CEO Kurt Farrugia said that Malta’s foreign direct investment policies aim to attract industries such as Artificial Intelligence, pharmaceuticals and robotics.
“We intend to attract companies that not only help the economy but that have positive effects on society,” he said.