Conservatives condemn Gibraltar tax ruling
Posted, November 15, 2011 @ 15:00
The three Conservative MEPs representing Gibraltar today condemned a European legal ruling that the Rock must abandon a competitive business tax regime which has seen it become a burgeoning hub for financial services and internet transactions in recent years.
In a joint statement, Giles Chichester, Ashley Fox and Julie Girling said: "We are dismayed that Gibraltarians' growing prosperity, which has bucked the Erupean trend, will be undermined by this attack on their right to set tax levels as they please. It is deeply regrettable that the European Court of Justice has chosen not to back people's freedoms.
The decision by the court in Strasbourg is the latest in a saga that began in 2002 when the UK first informed the European Commission that Gibraltar was to introduce a business-tax regime based on payroll and property-use in the overseas territory and which effectiveley capped corporation tax at 15 per cent of profits.
In 2004 the Commission ruled the tax system must be scrapped as it amounted to unlawful state aid that was incompatible with the common market.
Gibraltar and the UK appealed against the ruling and the Court of First Instance ruled in their favour in 2004. The court said Gibraltar's Government had set the tax in a manner that was institutionally, procedurally and financially independent of the UK - so it was wrong to suggest that the UK was involved in the decision or was involved in any in wayin offsetting it. The lower court also ruled that the Commision had not followed proper procedure in declaring the regime illegal.
An appeal against that decision by the Commission led to a new hearing and today's judgment.
The MEPs, whose Euro-constituency is named the South West England and Gibraltar, said: "We know Gibraltarians well and while they are proudly British and loyal to the Crown, they are also very quick to assert their democratic independence, their right to self-determination and their right to set their own laws and taxes.
"Unfortunately the court has not vindicated those rights and has allowed Gibraltar to be victimised by the Commission."