Gibraltar’s Chief Minister, Peter Caruana, speaking to reporters whilst attending the UK Labour Party’s annual conference in Manchester, said that Gibraltar had successfully reformed the territory into a leading financial services hub, abandoning the image of a European ‘tax haven’.
His comments come after the long-awaited implementation of a new corporate tax regime, which, from January 1, 2011, will set a flat 10% tax rate on resident and non-resident companies under the new Income Tax Act.
A change to the territory’s corporate tax regime was permitted after a ruling by the European Court of First Instance, which confirmed the territory’s fiscal autonomy from the UK, paving the way for the replacement of the territory’s outlawed exempt companies regime, for a tax system which taxes both resident and non-resident companies on the same basis, at 10% of profits.
In comments to the Associated Press (AP) at the conference, Caruana said that the government had adopted a policy whereby it was seeking to develop its strength in financial services, online gaming and shipping to push forward the territory’s economic development, “where Gibraltar has leading global positions, [in terms of] high standards of regulation and supervision.”
While other offshore territories still offer lower lower taxes, Caruana explained the government would be offering companies a reputable jurisdiction, with a regime endorsed by the European Union. He explained that Gibraltar must build a “reputation for soundness”, explaining that otherwise “reputable companies just don't want to be established in your territory.”
“We do need to make our little corner of Europe look as normal as possible,” he said.
“As Gibraltar is such a small place, we don’t need a huge amount of quantity of economic activity, and therefore we can strive for quality. It’s a lucky position to be in.”
Commenting on the forthcoming tax regime, Caruana told AP: “It’s a low rate [of corporate tax], and we hope companies will find it attractive.”
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