Maltese tax hike to hit up to 20 large foreign entities

Maltese government sources have warned that up to 20 large foreign companies could see their taxation rates increase to 15% after it was announced that a minimum tax floor could come into effect on the island as soon as January 2023, reports the Times of Malta.

The minimum corporate tax rate agreement struck by the Organisation for Economic Co-Operation and Development (OECD) will impact only those international companies with annual revenue above €750m (£637.9m) which currently pay 5%. Firms in the gaming and corporate services will be most affected.

Malta is home to more than 300 igaming licensees and approximately 6,500 people work in the industry. The gambling industry accounts for around 13% of Malta’s GDP.

When the announcement that Malta had signed up with 129 other countries, shares of Malta-based online gambling companies, including Evolution, Kindred and Kambi, slid dramatically.

One source suggested to the Times of Malta that some firms have indicated they would consider shutting down their Maltese operations if the tax increase came into effect, although another countered this saying that no employers have suggested they would leave.

The outlet’s sources claimed that the government had already turned its attentions to international companies that earn less than €750m annually and would be able to operate under the 15% floor.

The agreement was ratified in order to stop countries, like Malta, competing to offer the lowest possible tax rates in an attempt to attract global multinationals including Google, Amazon and Facebook.

The OECD hopes the new tax regime will generate $150bn (£112.7bn) for global governments.