Boost for Gibraltar's tax independence
Posted, December 18, 2008 @ 12:00
Boost for Gibraltar's tax independence
Today's decision by the European Court of Justice (ECJ) to allow Gibraltar to set different rates of corporation tax is good news the local business community said Giles Chichester, Conservative MEP for South West England and Gibraltar.
The case refers back to 2002 when the UK notified the European Commission of the Government of Gibraltar's proposed reform of corporate tax. Following a formal investigating procedure in 2004, the commission decided that the reforms of Gibraltar's corporate tax system constituted a form of state aid that was incompatible with the EU common market and should therefore not be implemented. The commission saw the reforms as regionally selective as, in general, Gibraltarian companies would be taxed at a lower rate than those in the UK.
However the ECJ announced today that: 'that the reference framework for assessing whether the tax reform at issue is regionally selective corresponds exclusively to the geographical limits of the territory of Gibraltar'.
Commenting after learning of the decision, Mr Chichester said:
"The Gibraltarian economy is largely autonomous and should not be subjected to a one-size-fits-all tax policy that is directed from the UK.
"Today's decision is welcome news for the business community in Gibraltar and is a timely boost given the current financial climate."