Gibraltar Defends Its Interests In London

by Jason Gorringe, Tax-News.com, London

30 January 2012

Gibraltar's Chief Minister Fabian Picardo has met with the UK Minister for Tourism & Heritage, John Penrose, to question the rationale behind the UK government's plans to introduce a licensing regime for remote gaming operators, contained in the Remote Gaming Bill which may soon be tabled before the UK's parliament.

Under current arrangements in the UK (set out in the Gambling Act 2005), operators who have key equipment in Great Britain are required to be licensed by the Gambling Commission, whilst operators licensed in European Economic Area (EEA) member states, Gibraltar and 'white-listed' jurisdictions (Isle of Man, Alderney, Tasmania and Antigua and Barbuda) are permitted to advertise in the UK by virtue of the licence held in their home jurisdiction.

In launching a consultation on a proposed new regime, the UK's Department for Culture, Media and Sport found that fewer and fewer gambling operators are being regulated in Britain since the implementation of the Gambling Act 2005 (in September 2007) and that no major remote gaming operators have chosen to relocate to the UK.

The government has proposed to review the UK's regime so that offshore operators would be required to obtain a license from the UK regulator in order to transact with UK clients. The Treasury is also reviewing the case for changing the taxation regime in line with these proposals and taxing operators on the basis of customer location.

Presently gambling operators in the UK are required to pay gross profits tax at 15% but under the proposals this tax could be reduced and offshore operators would be required to contribute to UK coffers. Domestic operators in the UK have long bemoaned the country's gambling tax regime, but for years pleas for tax reform have fallen on deaf ears. Operators have increasingly looked to specialist, low-tax territories, such Gibraltar and the Isle of Man, to relocate operations, where operators benefit from substantially more favourable tax treatment with profits subject to tax as low as 0%.

During his London vists Picardo also met with the leader of the opposition Labour party, Ed Miliband, where the recent inflammatory comments made by Miliband on the topic of 'tax havens' were discussed.

The Gibraltar government said the meeting presented an opportunity for the territory to brief Miliband on the latest developments in Gibraltar and in particular on the work of the finance centre as a fully compliant EU financial services hub, which the government underscores "operates entirely in keeping with EU directives and regulations", and is "fully compliant with OECD rules" on tax transparency, and therefore not by any measure a 'tax haven'.

Miliband had earlier called for European Union decision makers to take action against offshore territories such as the Crown Dependencies on tax evasion concerns.

Recommended