14/02/23

GIBRALTAR: GSD pushes Govt on Spanish tax blacklist.

As published on chronicle.gi, Monday 13 February, 2023.

The GSD has pressed the Gibraltar Government to clarify by when it expects Spain to remove Gibraltar from its blacklist of tax havens.

The party was reacting to news that Spain had last week confirmed its latest updated list and that Gibraltar was still on it.

The GSD noted that the Gibraltar Government “sold” the tax treaty entered with Spain three years ago by saying that one of the positive outcomes from it would be that Gibraltar would be removed from the Spanish blacklist within two years of it coming into force.

That commitment was confirmed in writing in a letter to the UK ambassador in Madrid, Hugh Elliott, by the then Spanish State Secretary for the European Union, Juan Gonzalez-Barba, in January 2021.

The Treaty came into effect in Gibraltar by Notice and Regulations made on February 26, 2021, and in Spain on March 4, 2021.

In a statement on Monday, the GSD said the Gibraltar Government must clarify when it considers the two-year deadline expires if not on March 4, 2023.

“Gibraltar remains on the blacklist despite the promises made at the time of the tax treaty,” said Keith Azopardi, the Leader of the Opposition.

“The publication of a new list four years after the tax treaty and almost two years after its entry into force would have been a good opportunity to remove Gibraltar from the list.”

“Unless this happens soon there will be a brazen breach by Spain of the commitment given at the time.”

“How is the Government going to defend its stated position about the positive effect of this bad deal then?”

From the outset, the GSD had described the tax treaty with Spain as “negative, intrusive and harmful” to the Rock’s economic interests, a position it reiterated on Monday.

The GSD said the treaty penalises Gibraltarians and Gibraltar companies, treating some of them as Spanish tax resident even if they do not live in Spain or have no economic activities in Spain.

The treaty acts as “a disincentive to inward investment” and is “nowhere near the standard and neutral” tax treaties that other countries would sign, the GSD said, adding it was “loaded to give Spain economic control and power in an unreasonable way”.