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Julian Manduca
Prime Minister Lawrence Gonzi has confirmed that the tax exemption Malta will be granted on the purchase of Malta House in Brussels will be lost in part should it be used commercially, but hopes to negotiate an agreement to retain the exemption. The Prime Minister said the government will try and negotiate not to lose the exemption and indicated that other states have done just that.
However, MaltaToday is informed that should the government decide to rent floors commercially for a reasonably long period - which would make commercial sense - the exemption will not be extended and Malta will have to pay tax.
It took more than two months to squeeze an answer, if not complete, from the Prime Minister after questions were put to him by this newspaper about the tax exemptions that could be lost on Malta House in Brussels, should it be rented out commercially.
Despite many requests by this newspaper, the Prime Minister saw fit not to reply, but answered a question on the topic put to him by Opposition EU spokesperson Leo Brincat in Parliament.
Asked when he was going to furnish the Public Accounts Committee with the opinion of KPMG Brussels about Malta’s tax status should part of Malta House in Brussels be rented out commercially, Lawrence Gonzi did not indicate a date when he would be submitting KPMG’s opinion, but offered a reply.
“The general principle adopted by the Belgian government when properties are purchased by sovereign states is that an total exemption registration tax at 12.5 percent is allowed on the purchase price or the market value if that is higher,” the Prime Minister said.
“Should part of the building be leased commercially tax will have to be paid once on that part of the property. However, the government is informed that other Embassies have asked to be exempted on the entire properties including parts that are leased.
“It seems that these have negotiated with the Belgian fiscal authorities for the exemption to remian since part of the of the building is being rented on a temporary basis until their countries need them when they assume the presidency of the EU. The Malta government intends to ask for the same exemption when the time comes to rent part of the building.”
The Prime Minister had promised the Public Accounts Committee that it would present it with KPMG’s report, but so far nothing has been forthcoming.
When this newspaper contacted Lawrence Gonzi’s communications coordinator, Alan Camilleri, this week it was referred to the Parliamentary question referred to above and answered on 25 October. MaltaToday is, however, still waiting for answers to questions sent more than two months ago about the tax that would have to be paid on revenue from renting parts of Malta House commercially and regarding the extra costs and considerations that may have to be made for security should four floors be rented to third parties.
julian@newsworksltd.com
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