There are two telling quotes in an article in the Guardian on Gibraltar this morning. One is this:
“On the gaming side, we've got all the big players; we've got 888, we've got bwin.party; we've got Ladbrokes, we've got William Hill,” says Christian Hernández, president of the Gibraltar Chamber of Commerce. "The reason they are here is because Gibraltar is a highly regulated gaming centre and we only want to attract bluechip business.”
The other perspective is:
“Frankly speaking it does not give me a second of happiness if the Spanish flag is on the rock,” Javier Nart, a Spanish liberal MEP, said on Monday. “What is important for Spain, and for me, is that this territory is not used as a fiscal base against Spain.”
The self delusion of the first quote is obvious. First, without the legal back up of British courts ultimately Gibraltar has no real capacity to regulate anything, especially when it is so obviously dependent upon not upsetting the gaming business. That business is not there for good regulation. It's there precisely because there is low regulation, especially when it comes to tax.
And the second quote makes it appropriately clear that Spain deeply resents this.
In a nutshell the reality of discussion in Gibraltar is exposed. The truth is it probably does not matter enormously to Spain to get Gibraltar back. On the other hand having a location at its southern tip deliberately run as a tax haven with the intention of undermining its tax revenues must be deeply aggravating, and that's a precisely fair summary of what the UK is permitting. Of course Spain us rightly upset about that. And the EU is for this reason right to support Spain.
So what's the solution? Isn't it obvious? It must be to take the tax haven out of Gibraltar, make it truly British, and leave it under British control, unless of course, joining Spain is then considered desirable by Gibraltarians. I cannot see another option that the UK can reasonably offer without making its own dependence on tax abuse in the post-Brexit world obvious. Unless, that is, independence were to be put in the table. But independence would have to really mean just that, without hidden defence, legal and other subsidies which are still provided at present. And I am quite sure Gibraltar can't survive like that, and nor do I think Spain would accept this.
So the issue comes down to a straightforward question of why Spain should be expected to live with a hostile tax haven seeking to undermine its laws and taxes as its immediate neighbour and the answer is, quite reasonably, that this should not be happening. In which case the solution is to take the tax haven out if Gibraltar. At which point, I suggest, there won't be much left to fight over. And at the sme time the issue will have been made explicit.
Ponder this though: how many UK politicians woukd be brave enough to say this?
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A few monkeys basically…………….that’s all that would be left.
“how many UK politicians woukd be brave enough to say this?” – there is a problem with this question – brave & politicians mutually contradict, particulalry in this case given the little-Britain bunch that currently “run” the country.
Take the tax aspect out of Gib & what is left is sun & sea – the Gib’s have been enjoying a free lunch for far too long – at some point Uk or England should pull the plug & pass the “problem” to Spain. Ditto the “sovereign bases” in Cyprus.
The Cypriot bases are, if anything, even more absurd
What are they for?
Naked power projection, of course…
So that our government can bomb people in the Middle East when it suits us.
A friendly and strategic airstrip within easy reach of the Middle East/Black Sea for our American chums to refuel/arm their planes without the expense of having an Aircraft carrier in the region.
Also a listening(spying? perish the thought) post for the Easter Med too.
So we don’t need it
Bargaining chip – I’d be inclined to get Trump & Vlad in a bidding race – “he who pays wins” – style of. Got to be worth – what Euro60 – Euro100 billion? – why did I think of that number – who knows – the EU might put its hand in it pocket…. or….. China (apologies – it has been a long day)
You’re right Richard, it is all about tax but not the tax most people would think of. Although in the EU for most purposes (including a lot of market access rights etc.) Gib is not in the common VAT area and does not have VAT. A gambling business makes exempt supplies and cannot therefore recover its input VAT. This is a huge cost to gambling businesses based elsewhere in the EU (except Malta where the government has conspired with the industry to create a fiction for VAT purposes). Gib based gambling businesses can therefore operate at a massive cost advantage to their competitors based in the common VAT area. This distorts the market and undermines the tax base of every Member State.
Thank you
It’s you who needs thanking Richard.
The sad (for me as an unashamed Europhile) truth is that the EU could stop this at a stroke. All that is needed is to amend the Principle VAT Directive to treat internet gambling in exactly the same way as electronically supplied services generally – taxable with the place of supply where the customer belongs. That would completely level the playing field as the bookie’s VAT exposure would be where it should be – where the punter is, not where the bookie is holed up. Why the EU doesn’t do this is beyond me.
Neat idea
But not enough
There is a large trust industry in Gib too
And a lot of offshore banking
Think you’ll find CYpriot bases are considered critical for UK middle east operations.
Suspect there are a fair number of Spanish elite who make use of gibraltar…
Do we need Middle East operations? Couldn’t we work with other countries? And if that was not possible, not at all?
I’m sure that, as the ‘Gateway to the Mediterranean’ Gibraltar is a strategic place for the UK to hang on to. Whilst we alll want anouther 60 years of peace, no-one can deny that Russia are flexing their muscles at the moment. We can easily close the Gib Strait to unwanted foreign vessels, due Gib’s ability ot house nuclear subs.
On a separate note, I do not agree with Gibralar’s tax free status. As a memeber of the EU, how are they allowed to get away with this?
They’re a semi-detached member of the EU
It’s the UK’s fault this hap-pens: we promote tax havens
And why do we need to police the Med. Are you saying Spain can’t now or won’t let us use the port?
If it was all about tax it would be much simpler. Spain have tried different ways including militarily to take Gibraltar from Britain – long before internet gambling companies existed, or low corporation tax and less regulation. If you give some credit to the Gibraltar administration perhaps it might be fair to recognise their efficiency. They provide excellent social services on the back of charging lower taxes and an environment of transparency and strong governance (not so common in the region). A low tax regime might be a thorn in the side of Spain but I think you need to look a little deeper to explain Spains action than just tax.
So how does Gibraltar achieve that?
Might it be massive British defence subsidies that pay for the port, airport, hospital etc?
And sure Spain are worried about more than tax. But take it out of the equation and a) would Gibraltar want to be in the UK? b) would Spain still be bothered? or c) would this become a non-issue
That was my point
You did not address it
Perhaps I need to be a little more specific … Take tax out of the equation a) would Gibraltar want to be in the UK? Yes, because the people are British, their culture is British and they have a right to self determination and have elected to remain British. Look at the TV listings in the local paper (the first English speaking paper printed outside of England btw) its BBC1, BBC2 ITV etc… It’s not a tax regime that attracts them to the UK, its heritage.
b) would Spain still be bothered? Yes. Its true that Gibraltar gives the Spanish Government a way of distracting national attention away from things at home that they would rather the electorate didn’t focus on, like 25% unemployment and near 50% youth unemployment. But that aside many feel a historic injustice which they feel should be righted. Although Gibraltar is smaller in size than Malaga airport, it sits as an icon and a reminder, in full view of Sotogrande where the great and good Madrid holiday, of this “historic injustice”
or c) would this become a non-issue – unlikely, take away any tax issues Gibraltarians will still want to be British and Spain would still like Gibraltar back.
Hope this answers your question?
If you want to be British there is, of course, an easy solution you seem to have ignored
You have also ignored hundreds of thousands British people live in Spain
Your argument holds no water
Massive British Defence subsidies?
Are you kidding? At last count the Royal Navy fleet permanently docked in Gib amounted to two fast inflatables and a dinghy!
As for the airport and hospital…. do you have any details to support your claim of this massive subsidisation?
Are you saying we don’t pay?
Show me
At least you confirm the strategic significance of then place
Oh my you are really showing your ignorance about Gibraltar if you think that ‘defence subsidies’ pay for things here. No Richard, the Gibraltarians pay for the Hospital and the new airport, we did not even get an EU development grant for it. How do we pay for that and the Port? simple, they generate income – millions of passengers use the airport and ships bunker and take on supplies in the bay.
Mrs Thatcher put an end to the ‘dockyard economy’ in the eighties when she shut it.
You also miss the point about regulation of the gaming sector. The large players want good regulation – which they get – as this keeps the ‘cowboy’ operators out and increases the credibility of their operations and those of the territory.
Gibraltar’s largest asset is its people. Education standards are higher than the UK and students for higher education get full grants, fees and subsistence paid by the government not loans and most of them return home because Gibraltar has a quality of life hard to find elsewhere.
Lets stop talking about Gibraltar as ‘a tax haven’ because it is not, in the words of George Osborne its a LOW tax economy. Government wishes to make it attractive to businesses, but in order to be licensed here they have to provide employment and house their servers locally. Gibraltar wins as it has world class internet, The sort you would find in the City of London but not anywhere else in the UK.
As a part of the EU Gibraltar complies with all EU requirements and our tax system has been specifically approved by the EU, so there is no ‘unfair’ competition and the government signs TIEA’s with anyone willing to do so, Spain refuses.
Yes people here voted for the UK to remain in the EU, mostly because they fear leaving will allow Spain to find even more excuses to ‘have a go’ at us. I see rather than calming things down, Sr Dastis has sent a gunboat into Gibraltar waters today as a provocation.
But please do more research and don’t talk nonsense about things you display no real knowledge about.
The best evidence of a place being a tax haven is its denial of being a tax haven
You all do it….
And we all laugh
And as to subsidies – I’ve looked at your government’s so-called accounts and I have no evidence at all that you are right
So you prove it
Very interesting Jim…
Richard has yet to show any links or data that back up his claim that Gib receives massive subsidies for it’s Military (lol), airport, hospital and port.
I can’t be sure but I’m not entirely convinced that his own comment-moderation policy allows for such requests for veracity and openness to be approved for display on his blog posts.
We shall eagerly await enlightenment with regard to his, no doubt, robustly researched sources.
It wasn’t robustly researched
It was a comment based on the fact that the presence of UK forces (and they are present) will have such subsidies attached to them as a matter of fact
Why bit prove me wrong using your government’s accounts? And those of other authorities if you like
This was in the Independent last night. Craig Murray is a former British ambassador who did not keep quiet about some of the abuses he saw.
Craig Murray:


There are 32,000 Gibraltarians organised into 11,400 households. Extraordinarily there are more registered companies than households, including 8,464 registered offshore companies.
The Government of Gibraltar’s own website is notably candid about its tax haven activities. It urges you to establish there so you can take advantage of:
Highly-developed business services infrastructure where it is possible to passport an EU licence in financial services such as insurance and re-insurance, EU-wide pensions, banking and funds administration, amongst others.
Distribute competitively priced VAT-free goods and services to the markets of the EU and Africa.
Conduct business in a quality low-tax jurisdiction with a profit oriented capital base at low levels of corporate tax, all in a stable currency with few restrictions in moving capital or repatriating dividends.
It is no wonder Gibraltar voted 96% pro-EU. Its entire economy rests upon the use of its anomalous status to undercut the tax regimes of genuine EU members. Remarkably for a population the size of Ramsgate, there are 17 registered banks in Gibraltar, including Credit Suisse, the money laundering giant raided by combined European police forces yet again yesterday, and RBS/Natwest’s tax avoidance entity.
Gibraltar was occupied by England (yes, England) in 1704 when it was sacked by the Hessian Prince George (wry smile Hessian — sacked) and 90% of the Spanish population fled after being subjected to mass rape.
Britnats have been all over twitter this last 24 hours shouting that Gibraltar was given to Britain “in perpetuity” by the Treaty of Utrecht of 1713. Thankfully the world has changed since 1713. The Treaty of Utrecht also gave Brazil to Portugal, much of Italy to the Hapsburgs and gave Britain the monopoly on the shipping of African slaves to South America. Thankfully none of those turned out to be perpetual and the British occupation of Gibraltar is equally immoral and anachronistic. That the Foreign and Commonwealth still quotes the Treaty of Utrecht is evidence of the moral bankruptcy of the British government’s position.
There is a key point here. Empires cannot cloak their continued Imperial possessions under the “right of self-determination” of Imperial client populations. Still less is there a “right of self-determination” for an entire Imperial client population to leech off tax avoidance activities by virtue of their Imperial possession status. The right of self-determination does not apply to the colonists of Gibraltar, who like the Falklanders are an introduced Imperial population — contrary to myth the large majority of Gibraltarians are not descended from the original Spanish population. Gibraltar is plainly listed by the UN as a Non Self Governing Territory. Self-determination is not applicable in international law. UN General Assembly Resolution 2353 specifically asserted that Gibraltar is a colony which impinges on the territorial integrity of Spain and thus on Spanish right to self-determination, and that a referendum of the colonial population could not change that.
Britain’s fervidly jingoistic attempts to hold on to its remaining colonies are pathetic. I have a memory as a very small child of watching Rolf Harris on TV dressed in union jacks singing “Please Don’t Alter Gibraltar” to the tune of Land of Hope and Glory. Google has just reassured me this really happened and was not a nightmare. I now realise from the timing that was a riposte to the UN General Assembly discussions. That it was Rolf Harris gives the perfect pointer to the grossly immoral British position on Gibraltar.
Ironies abound.
Irony 1
It is the Little England Brexiteers who are frothing at the mouth over the EU saying it will take heed of Spain’s position on Gibraltar — despite the fact the Gibraltarians voted 96% in favour of the EU.
They cry, how dare the EU take into account the position of the United Nations and of its member state, Spain, against what will be a non-member state? Who could have seen that coming?
Irony 2
Gibraltarians of course voted in favour of the EU in order to benefit from the opportunity to continue undermining EU tax regimes.
Irony 3
The Daddy of them all. The Britnats who crowed repeatedly at Scots, extolling alleged (and improbable) Spanish desire to veto Scottish EU membership, are shocked, shocked that Spain may veto a Brexit settlement over Gibraltar.




For once I agree with Craig
I guess its how far back you want to draw the date line? Gibraltar was British before the US was American but I can’t see many people suggesting the US should pass sovereignty to the native Indians. The hypocrisy of Spain in relation to Gibraltar when it has two Spanish enclaves in North Africa is hard to reconcile. Surely she should give these back to Morocco before trying to raise the issue of Gibraltar? Perhaps the UK should give Gibraltar back to the Morocco not Spain as the Moors inhabited Gibraltar for 500 years before the Spanish. Or perhaps I should study more tax and all would become clear 🙂
The clear anachronism is now Utrecht
And tit for tax is excerpionally childish – as I suspect you know
Spain does also not operate tax havens
So your arguments are pretty hollow
Richard
You say that Spain “does not operate tax havens”.
I would suggest that you urgently research the “Beckham rule”, which is used by a considerable number of wealthy foreigners to cap their liability to Spanish tax on their foreign income. It’s Spain’s version of the non-dom formula. All approved by Brussels of course.
That’s not exactly a tax haven
I accept it’s abusive
But please don’t grab at straws
I had a look at Ceuta and Melilla for a client a year or two ago. If I remember correctly they’re outside the EU for VAT and duties purposes, don’t charge a local VAT, and have significant direct tax breaks.
And no one uses them as a tax haven
Pardon Richard?
Clutching at straws? Me?
How many times over the past decade have you claimed that the UK is a tax haven because it has a nondom regime? But Spain now has one and you accuse me of clutching at straws?
Your inconsistency knows no bounds.
respectfully, shall we stick to the facts?
Richard
In what way am I not sticking to the facts?
Spain has the equivalent of a nondom regime – fact
You have attacked the UK for having a nondom regime and claim that it’s a tax haven – fact
You claim that Spain that isn’t a tax haven – fact
Go and read my books on tax havens
When you know what you’re talking about come back
“evidence of the moral bankruptcy of the British government’s position” – you would have to start with having morals to become bankrupt – looking at history, I’d suggest for the most part with respect to the bunch that ran the UK the “moral” bit was never there, but in fairness to the British establishment, they did buy their hypocrisy wholesale & as the late great Peter Cook once said on the Clive James show (he was vastly drunk): “ah yes hypocrisy- the vaseline of political intercourse” – stunned silence from the audience – & me almost wetting myself with laughter with respect to the truth of the statement – – in vino veritas
🙂
All those cross border workers from Andalucia into Gibraltar pay their income tax to Gibraltar. Yet they were educated in Spain, and travelled to the border on roads paid for by Spanish taxes. This is probably due to some supranational ruling on who gets the income tax, the territory of residence of the employer, not the residence of the worker.
Similar happens in the UK where we take doctors trained in Asian countries, depriving them of the talent they paid for, and then keeping the income tax they pay in the UK to ourselves.
It really needs sorting.
Ceuta and Melilla are tax havens—-50% the normal corporate and income tax rates.
That does not make a place a tax haven
Maybe you need to acquaint yourself with what one is
Amazing…
Your blog is called Tax Research but I’m not convinced you’ve done much of that before sharing your opinions on b Gib. Don’t get me wrong, you’ve every right to express your opinion but when your blog is called Tax Reasearch is it to much to expect that you’d do some?
You commented earlier that claiming a place is not a tax haven is a sure sign that it is. I shall refrain from comment on the staggering logic you used to arrive at that conclusion, but I can confidently assure you that I do not collect stamps. This does not mean that I am actually a philatelist.
In an effort to encourage your further research may I humbly submit the following for your attention. Took all of a couple of minutes to find… Remember: Ceuta is definitely NOT a tax haven
http://www.accountinginspain.com/spain-becomes-a-new-low-tax-jurisdiction-in-2014/
I have written two books on the subject
And am a Professor of Practice in International Political Economy at City, University of London
But what the heck, if you say so I don’t know a thing about what a tax haven is