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Today’s Top Headlines

Spain Claims Loss Of EUR1bn To Gibraltar Tax Regime

by Ulrika Lomas,, Brussels

29 August 2014

A high ranking Spanish politician has claimed that the Spanish government misses out on EUR1bn (USD1.3bn) of tax revenues each year as a result of Gibraltar's tax regime.

Iñigo Méndez de Vigo, Spain's Secretary of State for the European Union (EU), made the claim during an interview with the country's ABC newspaper.

"The Ministry for Public Finances calculates that the current tax regime in Gibraltar generates losses to the Spanish treasury of close to one billion euros annually, in the form of lower returns on different types of taxation," he said.

He called for the European Commission (EC) to investigate the British Overseas Territory's tax policies for possible illegal state aid.

The Gibraltarian authorities hit back at the Spanish claims, describing them as "a financial flight of fancy."

The statement said that out of the 15,673 active companies there are only 102 Spanish nationals with a Spanish address holding one or more shares in a total of 66 companies. "This helps to clearly demonstrate that Gibraltar is, unsurprisingly, not seeing significant numbers of Spanish individuals using Gibraltar's financial services," it said.

Gibraltar's Income Tax Act 2010 has, after minor amendments by the current administration, been approved by the Code Group of the EU with only Spain not approving it, according to the statement. "That demonstrates that the relevant Gibraltar legislation fulfills all the criteria required by Brussels in this respect; although Spain is continuing its attempt to ensure our law is nonetheless found to fall foul of the requirements. A state-aid investigation is still under way."

TAGS: compliance | Finance | tax | European Commission | tax compliance | Gibraltar | Spain | regulation | European Union (EU) | Europe

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