Author: GMX USER

4 Dec 2017

ECJ Judgment on VAT (Di Maura C-246/16)

The European Court of Justice has recently issued an important judgement (Di Maura C-246/16) with regard to VAT and specifically to the interpretation of the provisions of the VAT Directive (Directive 2006/112/EC) for bad debts.

European Court of Justice release new VAT judgement

The Court ruled that, the Member States may not make the reduction of VAT taxable amount, in the event of total or partial non-payment, subject to the condition that insolvency proceedings have been unsuccessful, when such proceedings may last longer than 10 years.  In its ruling the Court made some very important findings in respect to the interpretation of the VAT Directive that might call for changes in the way the directive has been implemented and applied in some of the Member States.

According to the general rule laid down by article 90 par. 1 of the VAT Directive, the taxable amount, for VAT purposes, in case of refusal or total or partial repayment or when the price is reduced after the supply takes place, shall be reduced accordingly. According to the Court and its case law, that provision embodies the principle of neutrality of VAT which requires that the taxable amount, for VAT purposes, is the consideration actually received by the trader and the amount of VAT collected by the authorities should not exceed the tax which the taxable person has himself received.

However, article 90 par. 2 of the VAT Directive, gives to each Member State the power to derogate from the general rule in case of total or partial non-payment. As it was stated by the Court, the objective of such a power given to the Member States, is to take account of the inherent uncertainty of the definitive non-payment of an invoice and with the consideration that the situation of non-payment of the purchase price does not of itself restore the parties to their original situation, unlike cancellation or refusal of payment.  As a result it is for the Member States to decide whether each case shall lead to an entitlement to have the taxable amount reduced or whether such reduction shall not be allowed. Nonetheless, it is underlined that the exercise of the power to derogate from the general rule should be justified so that the measures taken do not undermine the objective of fiscal harmonisation pursued by the VAT Directive.

In any case, it is clearly stated at the ruling of the Court that Member States do not have the power to exclude the correction to the taxable amount altogether in case of a total or partial repayment. Such power would be against the principle of neutrality of VAT which, as already described, requires that the trader as tax collector should not be brought in a position to bear the burden of tax due or paid in the course of his economic activities.

Moreover, according to the principle of proportionality, one of the general principles of EU Law, the measures taken in order to accomplish the objective of the derogation from the general rule, should be appropriate to achieve the objectives stated in that measure and not go beyond what is necessary. In this respect, it was judged that the derogation from the right to reduce the taxable amount altogether might not be the only effective means towards that direction and mainly it might not be the less onerous for the taxable person who pre-finances the VAT by collecting it on behalf of the State.

4 Dec 2017

Malta elected to the Council of the International Maritime Organization

Malta was elected to the Council of the International Maritime Organisation (IMO) for the 11th consecutive time. The IMO regulates the maritime sector within the United Nations. In this election, which took place during the 30th edition of the General Assembly of this same organisation in London, Malta was elected from amongst 20 countries in the same category having special interest in the maritime sector.

Malta elected to Council of the International Maritime Organization for 11th time in a row

This prestigious achievement confirms that Malta, which has one of the largest registers of merchant ships in the world, has attained the respect of the international community within this sector.

Early last week, Minister for Transport, Infrastructure and Capital Projects Ian Borg addressed the General Assembly. The Minister stated that our country will continue giving its support to the IMO and continued by mentioning the financial contribution that Malta has made to the Programme of Integrated Technical Cooperation during the last two assemblies.

He further expressed his satisfaction at the Maltese Government’s intention to seek to contribute more to this programme. Minister Borg, who led the delegation during the assembly, thanked Transport Malta officials who worked to achieve this success, with the cooperation of the Ministy for Foreign Affairs and Trade Promotion.

30 Nov 2017

Greece published the list of preferential tax regimes for 2016 and 2017

The Greek tax authorities have recently issued a Ministerial Decision by the Minister of Finance (circular ΠΟΛ. 1173/2017) with the list of the countries having a privileged tax regime under the provisions of the Greek Code of Income Tax for the years 2016 and 2017.

Greece included in the preferential tax regimes of 2016-2017

As provided for in the Greek Code of Income Tax, the taxable income of any Greek natural or legal person or legal entity which directly or indirectly owns more than 50% of the shares or of the voting rights or of the capital or has the right to gain more than 50% of the total profits of a legal person or legal entity which is resident[1] in one of the countries included in the list, should be increased to the extent that it includes the undistributed income of that legal person.

Specifically, in case of EU Member States or members of the EEA which are included in the list, the abovementioned provision does not apply, provided that it can be adequately proven that the legal person or legal entity which is resident in that country, carries on genuine economic activities and it is established in order to pursue real business and not as part of a tax avoidance plan. Evidence that might be accepted by the tax authorities towards that direction is among others the conduct of real business, the personnel employed in the host country and existence of natural presence there.

According to the circular the following countries are included in the relevant list:

Albania, Andorra, Anguilla, the Bahamas, Bahrain, Belize, Bermuda, Bonaire, Bosnia-Herzegovina, British Virgin Islands, Bulgaria, Cayman Islands, Cyprus, FYROM, Gibraltar, Guernsey, Hashemite Kingdom of Jordan, Hungary (only for 2017), Ireland, Isle of Man, Jersey, Kosovo, Liechtenstein, Macau, Marshall Islands, Montenegro, Monaco, Montserrat, Nauru, Oman, Paraguay, Qatar, Republic of Maldives, Republic of Moldova, San Marino, Saudi Arabia, Seychelles, Sri Lanka, St. Eustatius, Turks and Caicos, United Arab Emirates, Uzbekistan, Vanuatu.

 

[1] The term “resident” is used with the meaning of “tax resident as it is defined under the Greek Code of Income Tax (Law 4172/2013)

7 Nov 2017

Malta’s ship registry continues growing

Malta continues to be regarded as a strong and safe maritime jurisdiction and so far its efforts are reaping rewards as the Malta flag continues to be the largest maritime flag in Europe and the sixth largest maritime flag in the world. The constant growth of the Malta maritime flag speaks volumes. During 2017 Malta flag ranked among the very top performers following the UNCTAD Review of Maritime Transport 2017 on the leading flags of registration by tonnage.

Increase in Maltese ship registry

The geographical position and its reputation as a strong and safe jurisdiction have established the Maltese flag among shipowners, financiers and ship management companies. In addition, Malta caters for efficient corporate and tax structures with regards to the shipping industry. Apart from all the other benefits, the main advantage of Malta flag is that it is viewed and acted upon holistically. At GMX we believe that the Malta flag is a leading maritime flag chosen by the better ship owner.

29 Oct 2017

Malta accepts EU grant to explore use of LNG as a marine fuel

In a bid to meet its obligations under the the 2014 EU Directive, Malta’s Energy and Water Agency has been awarded a €600,000 EU grant to explore the potential of have LNG as a marine fuel in Malta.  In accordance with the 2014 EU Directive, Member States have until 2025 to develop LNG refuelling infrastructure at maritime ports.

Exploration of LNG as marine fuel in Malta

The study will seek to identify the optimal offshore, outside port infrastructure solutions for the development of maritime LNG bunkering in Malta

Demand for LNG fuel is expected to increase substantially over the next few years due to economic and environmental implications, making LNG a more attractive alternative to heavy fuel oil.  The study will look at the safety, environmental, economic and risk elements of establishing the refuelling infrastructure in Malta, bearing in mind the Malta-Italy gas pipeline interconnector.

10 Oct 2017

Malta Budget 2018

Yesterday evening, the 9th October 2017, Malta Finance Minister Hon Profs Scicluna laid out the plans of the Government for 2018 in the first budget in decades that was put in a context of a surplus for Malta, continual economic growth (currently around 5-6% annually) and record numbers for tourism and employment. Therefore, as the Minister proudly announced, this Budget did not include the addition of any new direct or indirect taxes, and several measures, as shown hereunder, in order to continue building on the positive context of the island as well as to seek improvement in key areas such as traffic control and roads, as well as property and rent.

Breakdown of Malta’s 2018 budget

EMPLOYMENT

  • Every employee shall get a wages’ raise of Euro 1.75 weekly in line with the increase of cost of living adjustment;
  • Every employee shall be entitled to an additional one day of vacation leave from 2018;
  • The minimum wage has been historically increased by Euro 3 weekly after a year of employment;
  • In addition, each employee earning less than Euro 60,000 a year shall be entitled to a one-off government payment varying from Euro 40 to Euro 68;
  • Pensioners will get a raise of Euro 2 a week, while the government bonds with beneficial rates specifically for pensioners shall continue to be available.

VAT

  • The threshold for non-chargeable VAT shall be raised to Euro 20,000 in order to incentivise small or mid-sized self-employment and entities further;
  • VAT Grouping for the financial and gaming sectors shall be introduced in order to exclude intra-company services and provisions from the VAT cap.

PROPERTY

  • There shall be the laying out of a White Paper proposing a rent reform. This shall entail the proposal for the obligatory registration of all rental agreements, with a reasonable minimum duration of the rent period. Additionally, laws relating to eviction procedures shall be reviewed so that the time period for such actions becomes shorter and the eviction takes place within a reasonable timeframe.
  • The scheme for First Time Buyers shall continue in 2018 and therefore, individuals buying their first property shall not pay stamp duty on the first Euro 150,000;
  • A new scheme for people who are selling their first property and buying a second property, therefore, continuing to own just one property, shall be entitled to a refund for stamp duty of up to Euro 3,000, which goes up to Euro 5,000 in the case of a person with disability;
  • The Scheme for restoration of property within specific areas of Malta shall continue to remain active in 2018. Other schemes such as the decrease in stamp duty to 2% for property purchased in Gozo as well as the decrease in stamp duty to 3.5% for purchase of property in Urban Conservation Areas shall also remain.

INVESTMENT

  • The schemes of Malta Enterprise regarding businesses such as MicroInvest or Business Start shall continue to be improved with additional monetary assistance up to Euro 70,000 depending on the circumstances of the business in question;
  • The Individual Investment Programme shall remain in force next year.

TRANSPORT AND ROADS

  • There shall be the creation of an Agency entrusted with the improvement of all roads in Malta over a period of seven years with an investment of over 700 million Euro;
  • Youngsters between the ages of 16 and 20 shall receive a free card to use public transport during the next year;
  • School children shall be provided with free transport to and from school (both for government and independent or church schools) from the next scholastic year;
  • Full refund of VAT on bicycles and electric bikes shall continue to be given, as well as the extension of refund up to Euro 400 on the purchase of motorcycles, scooters or electric bikes;
  • There shall be an exemption from car registration tax for five years from registration for electric cars and hybrid cars.

ENVIRONMENT

  • There shall be the collection of organic material as an extension to glass and other waste;
  • The implementation of the gas pipeline between Malta and Italy shall continue to be performed, while a new electric distribution centre shall be built in Ricasoli.

SOCIAL

  • Aid of up to Euro 10,000 shall be given to parents seeking the adoption of children abroad;
  • Further buildings are added for social housing, including the rent of private property to the government for such purpose, and rent subsidies provided by the Government shall remain;
  • Social security forms and VAT returns can now be submitted electronically by companies.

EDUCATION

  • SEC and MATSEC examinations’ fees shall be halved next year and shall be fully abolished in the following year;
  • Individuals doing a Masters or a PHD shall be exempted from income tax for a maximum of two years after the completion of the course, as long as the individuals in question remain working in Malta for at least three years.

 

In conclusion, Malta’s beneficial working sectors such as the financial sectors, pharmaceutical sector, gaming and construction remain very strong and the Government continues to seek incentives in order to fortify the pillars of the country as an economic force.  The Maltese government is also seeking to reform in a more liberal way, controversial social issues such as recreational drugs, prostitution, access to reproductive health and quotas and the impact of such studies remain to be seen.

2 Oct 2017

The time has come for the fourth anti-money-laundering directive to be implemented in Malta

The aim of the EU fourth anti-money-laundering directive is to further enforce the fight against tax evasion, money laundering and financing of terrorism and includes such provisions as that of the setting up of the ultimate beneficial ownership registry which is deemed quite controversial.  The deadline for its implementation in the different member states was June 26th 2017.  However this was missed by several.

EU to introduce fourth anti-money-laundering directive

In any case, following a tumultuous period wherein Malta was formally asked by the European Commission for explanations as to why the rules were not yet implemented, the Government has confirmed that the Bill bringing into line Maltese legislation with this directive shall be tabled in Parliament today, 2nd October 2017, for its first reading.  Furthermore, additional subsidiary legislation is also in the pipeline in order to provide for further regulatory provisions and bringing together various authorities including the Registry of Companies, MFSA and FIAU that are responsible for such implementation.

28 Jul 2017

Proposal for Improved Seafarers’ Conditions

Yesterday, on the 27th of July, the Commission issued a press release in which it proposed to enshrine into EU Law an agreement between European Transport Workers’ Federation (ETF) and the European Community Shipowners’ Associations (ECSA) concerning the improvement of the working conditions of seafarers.[1]

EU backs proposal for improved conditions for seafarers

The ETF and the ECSA are recognized as social partners within the shipping industry, representing European workers and employers respectively. In their role as social partners the organisations liaise with the Commission as well as with Heads of the Member State Governments in order to direct policy initiatives. The latest product of this cooperation is the move towards adopting EU legislation which improves the conditions of seafarers working on EU-flagged vessels. In particular the proposal will ensure the protection afforded to seafarers against abandonment in foreign ports as well as their rights to compensation in the event of death or long-term disability due to an occupational injury, illness or hazard.

Abandonment usually occurs when a shipowner decides to discard a vessel that is no longer valuable, and the crew is abandoned along with the vessel. In such circumstances, seafarers working on the abandoned vessel are often owed wages for the last months in which the vessel was in operation. Furthermore they are put in a precarious position since without the shipowner financing the operation food and water supplies as well as fuel quickly run out. While it may sound like a rare occurrence, just in 2016 five merchant vessels were abandoned in EU ports with about 58 seafarers on board.

The Commission’s Proposal seeks to introduce more protection to seafarers who are abandoned and will also improve the mechanisms for compensation provided to such seafarers by making payment of compensation quicker and easier in cases of abandonment as well as in cases of death and long-term disability resulting from injury or illness at work. If the Proposal is followed through the conditions of seafarers would be greatly improved, but also, EU ports authorities would have to deal with fewer problematic cases of abandonment.

 

[1] ‘Seafarers: New measures to improve working conditions’ (27 July 2017)

<http://europa.eu/rapid/press-release_IP-17-2141_en.htm>

26 Jun 2017

Tragedy at Sea

The tragedy that took place on a Colombian reservoir is made all the more poignant by the fact that it occurred on the Day of the Seafarer, an initiative adopted during the 2010 Diplomatic Conference in Manila to adopt the revised STCW Convention.

Whilst applauding all the owners of leisure boats that rushed to help and the tireless efforts of all the personnel involved in the search and rescue, a moment’s thought must be spared for all those on board and the lives claimed by this tragic incident.

25 Jun 2017

Day of the Seafarer – Seafarers Matter

The 25th of June marks the annual Day of the Seafarer.    Whilst keeping Seafarers in our thoughts, on this day more than ever, we must also promote what the 2010 resolution that adopted the Day of the Seafarer states.  The resolution “encourages Governments, shipping organizations, companies, shipowners and all other parties concerned to duly and appropriately promote the Day of the Seafarer and take action to celebrate it meaningfully”.

True to the spirit of the 2010 resolution, we at GMX would like to do our part in promoting this day, which is this  year themed “Seafarers Matter”.

To all seafarers, we at GMX wish you “Fair winds and following seas”.