WRITTEN QUESTION No. 2269/98 by Karl von WOGAU to the Commission. Tax relief in respect of goods produced in Malta for export to the EU
Date: 1998-07-22
Institutions: European Parliament, VON WOGAU
Subjects: EU production, Malta, World Trade Organisation, agreement (EU), countervailing charge, export, export subsidy, originating product, restriction on competition, tax exemption













EUR-Lex - 91998E2269 - EN






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91998E2269

WRITTEN QUESTION No. 2269/98 by Karl von WOGAU to the Commission. Tax relief in respect of goods produced in Malta for export to the EU  


Official Journal C 096 , 08/04/1999 P. 0066 





WRITTEN QUESTION E-2269/98by Karl von Wogau (PPE) to the Commission(22 July 1998)Subject: Tax relief in respect of goods produced in Malta for export to the EUIs the Commission aware that firms, for instance of British origin, are producing goods in Malta which are then exported to the EU under the terms of an Association Agreement between Malta and the EU?Malta grants such firms full tax relief, but only in respect of goods which Malta exports to the EU.The granting of full tax relief is distorting competition with firms producing goods within the EU. Moreover, the Commission has concluded that tax breaks are also covered by the prohibition on subsidies and aid.Answer given by Mr van den Broek on behalf of the Commission(15 September 1998)By virtue of the "Industrial Development Act" enacted in 1988 and amended in 1993 with the purpose of sustaining investment promotion efforts by the Malta development corporation (MDC), a number of incentives are offered to export-oriented companies, including "an initial 10 year tax holiday to companies, which export at least 95 % of their sales".This tax incentive is not only available to Community companies operating in Malta, but also to companies from other countries, including Maltese, on condition of MDC approval. The tax incentives are not only offered to products exported to the Community, but all export destinations are acceptable. The need to apply rules of origin from Malta has to be borne in mind. The Community-Malta Association Agreement indeed allows industrial products originating in Malta to enjoy free access to the Community market.It should be added, however, that Malta, as a member of the World trade organisation (WTO), is subject to the provision of the WTO Agreement on subsidies and countervailing measures (ASCM). If Malta is granting subsidies which are countervailable under the provisions of the ASCM, and if products exported to the Community are benefiting from these subsidies and thereby causing injury to the Community industry, the latter is entitled to ask the Commission to investigate the situation. In this regard, the provisions of the Community legislation in this area will be applied (under Council Regulation (EC) 2026/97 of 6 October 1997 on protection against subsidized imports from countries not members of the European Community(1)). The Community-Malta Association Agreement does not preclude the Community from taking countervailing duty action against imports from Malta if the relevant requirements of this regulation are met.(1) OJ L 288, 21.10.1997.