Is Malta Being Targeted by the EU's New Digital Taxation Policy?Published December 23, 2019 by Lee R
The EU jurisdictions relying the most heavily on iGaming are going to feel the impact of incoming digital taxation.
Well known for its liberalized regulation approach, the hotspot market for online poker, sports betting and slots sites that is Malta will be feeling the heat with a new tax regime for digital companies coming down from Brussels.
Digital Tax Goals
The digital tax proposals primarily target large American corporations including Apple, Facebook and Google, but an International Monetary Fund evaluation confirms that tax reforms adversely affect the tiny nation's economic position.
Relying on iGaming
The fact is online gambling accounts for a near eight of the island's economy and competes with finance and tourism as the largest sector for the island nation. With a population of 430,00, Malta has few natural resources to fall back on.
The Maltese government is fighting the developments with its own initiative for global tax reforms through the Organisation for Economic Cooperation and Development.
The Issues in Malta
Malta is also considered a target of legislation because of persistent money laundering and tax evasion issues, with many EU officials of the belief that Malta needs to show more initiative:
“Malta has a general problem with money laundering and tax evasion,” claims German European People’s Party MEP and European Parliament Economic and Monetary Affairs Committee vice chair Markus Ferber. “For me, it is very clear that the Maltese government has to significantly step up their game.”
So: is Malta over-relying on gaming, or is Malta under-enforcing current anti money laundering regulations? EU governments that rely on gaming are held to higher standards because of the disproportionate amount of online money laundering attempts that clinically take place in any liberalized jurisdiction.
Hopefully, Malta can continue to diversify its economy so that the tiny nation is not so heavily affected by the shifts in EU tax law applying to online gaming that take effect in the spring of 2020.