Malta-based online gaming companies have seen their share prices fall significantly following the announcement of an agreement by the Organization for Economic Co-operation and Development (OECD) to set a minimum tax rate of 15%.
According to the figures described by the EGR, Evolution shares and Kambi shares fell 6% after the announcement.
Shares of the Kindred Group have taken an initial fall – however, it has actually picked up pace since then and seen its share price improve over the past two days.
On 8 October, the Maltese government was one of 136 countries and jurisdictions that form part of the important agreement – which is scheduled to enter into force in 2023.
It will apply to companies with annual revenues above $ 750m a year – and is projected to generate around $ 150 billion in tax revenue worldwide.
Despite being part of the agreement, the Minister of Finance of Malta Clyde Caruana said that he has reservations about the agreement and that the country will be submitting counter-proposals.
“Every country is bowing to the agreement. This is because even if no other country agrees on it, countries can still tax the difference between what Malta taxes locally and what 15% elsewhere, ”Caruana told Malta Today.
Malta currently has a corporate tax rate of 35% – however, a tax deduction system provided to companies owned by non-residents sees some operators in Malta paying around 5% corporate tax.
Malta is not the only country with these concerns with Ireland regularly facing criticism over its tax rate.
The schemes attract businesses to the country but have sparked controversy in some of the richest democracies in the world.
The agreement will eventually be discussed at EU level and could be implemented in a directive for the bloc.
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