The Wall Street Journal recently described quirks in the U.S. Tax Treaty with Malta that became a popular topic in the legal advice sector.[1] In the said article, WSJ describes an offshore tax shelter (a tax regulation in Malta) which promises rich Americans they can avoid lots of capital-gains taxes by setting up pensions in Malta. This issue is not only American struggle with tax abuse. For instance, Poland has also signed an international tax treaty with Malta (Agreement between the Government of the Republic of Poland and the Government of Malta for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed in La Valetta on 7 January 1994)[2] and in 2020 the Treaty was amended due to the necessity of closing loopholes in the international (bilateral) tax system[3]. Moreover as a restoration of the Polish industry after COVID-19 pandemic, the Polish Government and the Ministry of Finance prepared the new Tax Act which shall prevent the change of the entity’s tax residence to the offshore tax shelter [4].

Before we move to the tax abuse based on the U.S. bilateral tax treaty with Malta it is advisable to start with Treaty’s provisions treatment.

U.S. – MALTA TAX TREATY

The Treaty was done in 8 August 2008 and came into force in late 2010. As Jeffrey L. Rubinger wrote The Treaty contains very favorable provisions that can result in significant tax benefits to U.S. members of a Maltese pension. In order for such U.S. members to take advantage of these benefits, the pension must qualify as a resident of Malta under the Treaty and also satisfy the limitation on benefits (LOB) article of the Treaty. [5] In his article Rubinger enumerates the Treaty’s provisions that could become a victim of the interpretation tax abuse.

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On 7 September 2021 KIELTYKA GLADKOWSKI will take part in the Webinar Analysing the Role of Telemedicine in Post-Pandemic Care organised by Reuters Events in conjunction with the Digital Health division of the World Health Organisation which provides opportunities to accelerate progress in attaining health and well-being related Sustainable Development Goal (SDGs), especially SDG 3, and achieving triple billion targets for 2023 as articulated in its Thirteenth General Programme of Work (GPW13).

The webinar will focus on the growing importance of remote telemedicine, its aspects and opportunities. The speakers will include:

– Peter Thomas, CCIO and Director of Digital Medicine at Moorfields Eye Hospital

– Toralf Schnell, Chief Digital Officer and Head of the Digitization Unit at University Medicine Greifswald

– Dr. Evgeny Zheleznyakov, Technical Officer, WHO European Centre for Primary Health Care.

Telemedicine and digital health remains in the core specialisation of lifescience and healthcare expertise of KIELTYKA GLADKOWSKI, having vast experience in handling projects at the intersection of new technologies and healthcare, including data protection, regulatory and transactional aspects.

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On 2 to 4 November 2021 KIELTYKA GLADKOWSKI KG LEGAL will take part in the virtual SPG 2021 Forum organised by R3 (Association of Business Recovery Professionals) SPG Forum (link) is a conference for trustees, restructuring experts and their employees.

During this 3-day event, our lawyers will have the opportunity to discuss the practical issues, participate in workshops and network with peers.

Some of the topics discussed will be the current regulatory framework for insolvency practitioners, key legal changes affecting the insolvency and restructuring of people and companies, and the exclusion of directors, the FCA’s guidelines for managers appointed or intended to be appointed by regulated firms; panel sessions with representatives of the financial industry discussing their experiences with the pandemic, recovery and new market trends; workshops, during which it will be possible to look at issues related to the insolvency of a real estate enterprise; workshop sessions during which the investigation and prosecution of claims in insolvent real estate will be discussed in-depth; interactive workshops, entirely devoted to the possibilities of the hotel business dealing with the challenges of the pandemic.

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Identification of the hacking problem

Based on the US Cybersecurity Trends Report (link to an online source at the end of the article), the hacking phenomenon records an increase in cyber-attacks in 2019 and 2020. From the legal perspective, what is particularly interesting is a significant increase in the recorded data loss events as a result of hacking activities in relation to the number of cases in individual years in the 2015-2020 prediction. One of the studies in the indicated report shows two specific moments over the years. The first one took place in 2016-2017, where we see an increase in hacker attacks by nearly 2,000 violations, but this is not related to a proportional increase in lost data, which differs from those from 2016 by about 1.5 million. In 2017, there was a slight increase in infringements, but more importantly, less data was lost. The second of these important moments indicated by the experts took place in 2018-2019, when there was a drastic increase in lost data with a slight increase in violations compared to 2018. We are seeing a drastic decrease in the number of breaches with a simultaneous huge increase in lost data.

From the analysis of the report, a surprising conclusion can be drawn that currently data breaches by hackers are less and less frequent compared to previous years, but much more effective.

The report also shows annual global cybersecurity transactions and equity financing in 2016-2021. In this respect there can be observed the huge projected increase in cash outlays for the cybersecurity target compared to 2020. The projected increase is over $ 10 billion. Despite the increase in spending, there has been a decline in the number of cybersecurity contracts.

The report presents the share of global cybersecurity transactions in 2020 by country. The first thing that throws up is that the US has over a half of shares in global market and is thus becoming a sort of hegemon in the fight against hackers. China ranks second with 12%. On the other hand, Israel ranks third with a 10% share, also showing a 4% increase compared to 2019. With the same trend, it has a good chance of overtaking China in this respect. The report shows the number of annual departures from the cybersecurity sector through mergers and acquisitions and stock market debuts. In the years 2016-2019, an upward trend can be noticed. From year to year, the number of departures increased by 100.

The report also shows the ratio of the increase in the number of the so-called megarounds (contracts worth over $100 million), which results in an increase in the volume of transactions.

All these increases in value did not go unnoticed. The consequence of the development of this type of industry, which is cybersecurity, is the creation and development of private companies. There are already over 30 companies in the world involved in the development of cybersecurity technologies, the value of which exceeds $ 1 billion. In Europe, for example, Acronis is such a company.

Almost 75% of cyber defenders are based in the United States, most of them in California. Second place, with almost 20% concentration of cyber defenders, is Israel. Canada and Ireland boast one “cyber defender” within their borders. In Canada it is the company “Isara”, and in Ireland “Tines”.

Methods of counteracting cyber attacks

There can be differentiated various methods of counteracting cyber-attacks. Most innovative ones are presented below:

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Purpose of existence

The main task of the Polish Platform for Handling Investment Projects (POPI) is fast and accurate implementation of broadly understood investment projects, which is (as the Polish Ministry of Health maintains) one of the most important activities of the Ministry of Health. In order to bypass many entities that would be involved in the implementation of a given investment, the Ministry of Health brought to life the POPI platform, which automated the above-mentioned process and thus facilitated navigation in the area of investment projects and increased the number of investment projects implemented in the area of health. The platform for servicing investment projects of the Polish Ministry of Health is a place bringing together entities that are directly involved in the process of launching investment projects. As part of this platform, entities can apply for funds for any investment co-financed by the Ministry of Health. Additionally, the POPI platform can function as a place where applications are assessed, and the given investments are monitored and settled. It should also be remembered that mutual contact regarding the implementation of specific investments is also part of POPI.

The Investment Project Support Platform (POPI) is available at the following address:

e-inwestycje.mz.gov.pl

It is also important that in order to fully use the POPI platform, it is required to set up an account through a certified profile, and to submit the application with the use of a qualified electronic signature.

What can POPI enable?

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