Gibraltar Responds To Criticism Over EU Savings Tax Directive

by Jason Gorringe, Tax-News.com, London

29 July 2005

Gibraltar is already within the ambit of, and is fully compliant with, the terms of the European Savings Tax Directive, the Gibraltar government argued this week in response to criticism from the UK's offshore dependencies that it has managed to wriggle out of its responsibilities under the directive.

"The Government of Gibraltar notes statements in the Channel Islands which refer to a 'last minute problem' and 'an initial difference of views between the UK and Gibraltar' in the implementation of the Taxation of Savings Directives between the UK and Gibraltar and demanding a 'quick resolution to the problem'. There have even been calls for UK to 'force' Gibraltar to comply with the Directive," the Gibraltar government noted in a statement released on Wednesday.

The statement continued:

"These remarks are based on lack of familiarity with the facts. Gibraltar already is within the ambit of and complies with the Savings Directive. There has been no 'last minute problem', nor any difference of views. Nor, as has been said has 'Gibraltar signed up to the Directive'. The Directive applies, and has always applied to Gibraltar as of right and obligation because Gibraltar is an integral part of the EU. However, as was stated jointly by the Gibraltar Government and the UK Government in a joint press statement issued by them on 1st July 2005, the Directive does not apply as between the UK and Gibraltar because we are not separate member states in relation to each other."

"Nevertheless, as announced jointly on 1 July 2005 the two governments are in discussion to agree appropriate arrangements for exchange of information between them outside of the legal framework of the Directive, which does not apply between them. The two Governments have jointly announced that they are working together with a view to agreeing such arrangements during the next few months. Expectations by ill informed third parties that this should happen by the end of this month are as inappropriate as they are unrealistic."

Speaking to the Isle of Man Online last week, the Isle of Man's tax assessor, Malcolm Couch, remarked that "Gibraltar has the capacity to completely derail the savings directive." The authorities on the island of Guernsey have also expressed dismay and confusion over the Gibraltar situation.

However, according to a spokesman for the Gibraltar government, the Crown Dependencies "appear to be getting over-excited about this issue".

"This is not a challenge or a difficult or controversial issue for Gibraltar or its finance centre, which is not orientated to or based on providing tax shelter to UK resident depositors affected by this Directive," the spokesman stated.

"Gibraltar’s Finance Centre has developed well beyond a dependence on the sort of business that is jeopardised by this Directive. We are happy to enter into appropriate exchange of information arrangements with the UK at its request which it has indeed made. Hence the discussions now taking place and the 1st July joint statement," the spokesman added.

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