US President-elect Barack Obama is soon expected to enact plans on clamping down 34 international tax havens, including Malta.
Last year, then State Senator Obama was one of the three signatories of the Stop Tax Haven Abuse Act, a bill presented to congress in which Malta, along with Guernsey, The Isle of Man and 32 other jurisdictions were black listed.
The international media reports that Obama is now planning to lead a reform based on this very bill.
Key US presidential aides expect a minimum of $50 billion per year recouped in lost US tax revenues once this bill is enacted.
This newspaper is informed that some time after the Act was presented to the US Congress last year, the Maltese-American Chamber of Commerce (Amcham) had lobbied for the introduction of a Double Taxation Treaty between the Maltese and the US government, which when enacted, should lead to eradicate the perception of Malta being a tax haven.
Key measures by Obama are likely to encompass revealing the owners of secretive trusts, prohibiting accountants from charging fees on specific tax services, and identifying “offshore secrecy jurisdictions that unreasonably restrict US tax authorities from obtaining needed information.”
Contacted by Business Today, Amcham Vice-President James Satariano said that after the Tax Haven Abuse Act was put to congress last year, the governments of Malta and the US “have signed a Double Taxation (Avoidance) Treaty which should come into force by the US Senate’s Foreign Relations Committee.
“The signing of this treaty,” Satariano added, “virtually puts a stop to the wrong perception in the US that Malta is a tax haven. The US Internal Revenues Service would have never consented to negotiations and the signing of the treaty with Malta if it was convinced that Malta is a tax haven. One now expected the 2007 Tax Haven Abuse Act to delete any references to Malta in its list of alleged tax havens. Malta is not a tax haven but a reputable onshore financial services jurisdiction praised by the international financial community.”
Asked whether Obama’s bill could act as a deterrent to potential US investors in Malta, Satariano said: “In its previous context, yes. In the present context, no - thanks to the Double Taxation Treaty signed by both governments. On the contrary, the tax treaty should stimulate US investors towards Malta.”
Being US Veterans day yesterday, a US bank holiday, the US Embassy was closed. Therefore, American Ambassador Molly Bordanaro could not be reached for her reaction.