Monday, December 22, 2008

Spain Upset Over Gibraltar's Tax Victory

Well, seems like the Spaniards are not gaining any friends in Gibraltar according to this report by Panorama:

Spain considers backing anti-Gibraltar appeal

The Spanish foreign ministry has lost no time in saying that it is considering to appeal against the decision by the European Court of First Instance which favoured Gibraltar's position.

As reported last week, the European court threw out the position taken by the European Commission. The Commission had said that 'regional selectivity' applied in Gibraltar's case, meaning that our taxes should be the same as those of the UK.

But the court has confirmed Gibraltar's fiscal independence. And this appears to have annoyed our 'friends' in the Spanish foreign ministry.

Th Spanish ministry has stated that the Spanish government is studying the implications of the court ruling, and has pointed out at the prospect of appeal that exists within a two-month period.

The Spanish Opposition party PP has come out against the pro-Gibraltar ruling of the European court, as if it is wrong for Gibraltar to win a court case.

Both the Gibraltar and the UK Government took the Commission to court following their decision over 'regional selectivity' and 'material selectivity'. So that, in the same way that Gibraltar is content with the outcome of the court, so is the UK who have always defended that Gibraltar's taxation system differs to that of the UK.

In other words, Gibraltar is separate to the UK in respect of tax law.

But there are those in Spain who think that Gibraltar must be an integral part of the UK in everything, and worse still, that Gibraltar must align itself with Spanish practice, as if it were an integral part of Spain.

Spanish PP calls for action

Jose Ignacio Landaluce, PP member of the Spanish parliament, says that the court ruling goes against the interests of the Campo area and of Spain. As such, it should be stopped.

He urges the Spanish government to use every avenue available to reverse the court ruling.

However, the European court has already decided that the three conditions set out in the judgment on the tax regime in the Azores are met in the case of Gibraltar.

The Azores are a part of Portugal yet it was allowed to have a separate tax system, thus how can such a ruling not apply to Gibraltar which has always been independent of the UK for tax purposes.

Gibraltar, the Azores and the Basque country

If the European courts were in future to reverse the decision favourable to Gibraltar having a separate tax system to the UK, it follows that this would have repercussions in the prior ruling on the Portuguese Azores, because it is on the Azores ruling that a decision has been taken on Gibraltar.

Such a reversal would thus have repercussions with Portugal. Not only that, but in the Basque country as well.

The Basque authorities have hailed the ruling that favours Gibraltar, because they see it as strengthening their own position in respect of having a separate tax system to that of Spain.

As soon as the GDead fish and oil back on Camp Bay shorelinep6p7Pic.jpgibraltar decision became known, the Basque authorities said that the Basque position is upheld and that in Gibraltar's case, a separate tax system to that of the UK does not breach the EU treaty, thus neither are they.

The Basque country was able to make headway as well by reference to the Azores case.

The European court has confirmed the autonomy of 'this British region', the Basques say when referring to Gibraltar.

If the Spanish government were now to attack the court ruling that favours Gibraltar, it would also be attacking the position of the Basque country and the Portuguese Azores.

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