Updated May 29 

Malta ranked high in a global tax haven index that scored countries' tax systems based on the extent to which they enable corporate tax avoidance.

On a scale of 0 (best) to 100 (worst), Malta was given an overall score of 74 by the Tax Justice Network, a UK-based NGO, indicating a corporate tax policy that was "corrosive" to the global economy.

Malta ranked 23rd in the Corporate Tax Haven Index, faring worse than countries like Panama, the Seychelles and Botswana.

The island scored a 79 in transparency, with the study criticising reporting of tax avoidance schemes.

The country report also found that Malta’s treatment of foreign investment income was unhealthy.

On patent boxes, a special very low corporate tax regime used by countries to tax patent revenues differently from commercial revenues, Malta was also given the worst possible score. 

Anti-avoidance laws were heavily criticised, scoring 93 out of a 100 in the study.

This is not the first time that Malta has been described as a tax haven. Earlier this year, anti-poverty organisation Oxfam said the country should be blacklisted as an EU tax haven.

The European Parliament later went on to approve a motion voting in favour of a resolution labelling the country as a tax haven

In a statement, the Tax Justice Network said the jurisdictions mentioned have triggered a "race to the bottom" around the world, that will further deplete tax revenues.

Countries "desperate to claw back foreign investment" will engage in the "false economy" of tax competitiveness and increase their complicity in corporate tax havens, they said. 

The report did not mince its words on tax competitiveness: “what is often referred to as ‘tax competition’ is more aptly described as ‘tax war’,” it said.

The British Virgin Islands topped the Corporate Tax Haven List, followed by Bermuda and the Cayman Islands. 

This is the report's list of top 10 jurisdictions enabling tax avoidance: 

1. British Virgin Islands (British territory)
2. Bermuda (British territory)
3. Cayman Islands (British territory)
4. Netherlands
5. Switzerland
6. Luxembourg
7. Jersey (British dependency)
8. Singapore
9. Bahamas
10. Hong Kong

Behind the index's methodology

The first ever study of its size and scope, the Corporate Tax Haven Index ranks countries by their complicity in global corporate tax havenry.

The index scores each country’s tax system based on the degree to which it enables corporate tax avoidance. Each country’s corporate tax haven score is then combined with the scale of corporate activity in the country to determine the share of global corporate activity put at risk of tax avoidance by the country. The greater the share of global corporate activity jeopardised by the country’s tax system, the higher it ranks on the index.

Malta's country report from the Corporate Tax Haven Index drawn up by Tax Justice Network.Malta's country report from the Corporate Tax Haven Index drawn up by Tax Justice Network.

 

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