Gibraltar’s financial services industry has been defended by the EU Commission after its tax practices were questioned by a Spanish politician and activist.
A Spanish member of the European parliament, Maite Pagazaurtundúa Ruiz, tabled a questioned in parliament on 17 August concerning Gibraltar’s tax practices.
“The Gibraltarian authorities have avoided being blacklisted, despite lax fiscal standards.
“The OECD itself states that shortcomings persist, such as the absence of any provision for penalties in the law regulating associations or the lack of a systematic supervision of associations’ accounting obligations,” she said.
In light of these comments, Ruiz asked if the commission plans to carry out case studies for jurisdictions with shortcomings, such as Gibraltar.
Further, she asked: “How does the EU intend to ensure that those which fail de facto to comply with the law — even if they appear to do so formally — are included on its blacklist?”
No inconsistencies identified
The commission responded to Ruiz’s questions by saying that, to date, there was no indication Gibraltar had failed to meet its reporting standards under European Commission law.
“It is important to note that, to the commission’s knowledge, no EU legislation aims to regulate associations’ accounting obligations, or their supervision, since these are not limited liability companies,” the commission said.
When it comes to the automatic exchange of information, the commission noted that it “had not identified inconsistencies in the practice of Gibraltar”.
“It should, however, be recalled that most automatic exchanges started quite recently.”
Gibraltar was not part of the 2017 screening to establish the EU blacklist as it has a “special” relation with the EU through the UK, established through a unique treaty.
Gibraltar welcomes support
HM Government of Gibraltar said it is “delighted to note the answer” provided by the commission.
“The commission’s answer confirms the Government of Gibraltar’s long-stated position, which the OECD and the EU’s own Code Group has confirmed; Gibraltar’s financial services are not in any way ‘harmful’ to the tax authorities of other member states,” a government spokesperson said.
They said the “prejudices” held against Gibraltar by some “uninformed sources in Spain” do not stack up when a fair and objective assessment is made by a impartial observer.
“Gibraltar benefits from clear statements that we comply with our international obligations,” the spokesperson said.
“No one should for one moment believe that Brexit is going to change our attitude of compliance to the highest international standards in respect of the financial services offered from our jurisdiction,” they said.