Maltese tax scheme raises state aid concerns

The European Commission has opened an in-depth investigation to determine whether certain maritime entities in Malta are erroneously receiving tax breaks. Under existing guidelines, Member States can reduce taxes for “for maritime transport of passengers or freight under certain conditions,” but Malta’s tonnage tax scheme appears to cast too wide a net – including in the favorable tax bracket fishing vessels, yachts, oil rigs, and lessors and financial institutions who themselves conduct no shipping activity at all. Commissioner Joaquin Almunia stated that such inclusion “seems neither justified from a competition perspective, nor appropriate in times of high budgetary constraints.”

The Commission seeks to address concerns that the favorable Maltese tax scheme may distort competition among EU member states by “attracting companies and vessels from other Member States.”

Full content:  EU Commission

Related content: The Current Financial Crisis and State Aid in the European Union: Has It Been Timely and Appropriate?

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