Gibraltar
has not entered into any bilateral Mutual Assistance
Treaties. However, the 1997 EU Directive on the
Exchange of Tax Information with Member States
applies to Gibraltar.
The
Criminal Justice Ordinance 1995 (implementing
EU Directive 91/308) provides inter alia for the
confiscation of the proceeds of drug-trafficking.
Neither it nor any other piece of Gibraltar legislation
deals with tax evasion.
In
the year 2000 various international organisations
issued 'offshore lists' in which Gibraltar fared
quite well:
-
In
June 2000 the Gibraltar Government wrote a 'Letter
of Commitment' to the OECD's Financial Action
Task Force in which it promised to comply with
international standards of transparency and
mutual assistance.
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Gibraltar did not feature on the FATF's blacklist
of jurisdictions that were considered to have
inadequate money laundering controls.
-
It was in the middle group of the Financial
Stability Forum's "could cause instability"
list along with Bermuda and Malta.
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However, three of its offshore company types
were included in the Primarolo Committee's
list of 'harmful tax practices' in the EU.
This is perhaps the most serious of the offshore
lists for Gibraltar but it was thought politically
improbable that the Code of Conduct Committee
was going to achieve much considering that
virtually every member state figured on the
list, mostly with quite significant low-tax
regimes.
Nonetheless,
in July, 2002, Gibraltar's Chief Minister, Peter Caruana
announced the territory's new corporate taxation policy,
with effect from July, 2003, which would include the
abolition of the existing corporate forms which allowed
zero taxation, the Exempt and Qualifying companies.
Further
major changes to Gibraltar's corporate tax regime
were announced in Caruana's June 2007 Budget speech.
Mr
Caruana explained that:
"The
Tax Exempt Company has been the backbone of the development
and growth of both our finance centre and the online
gambling industry, and thus of a very significant
part of our economy. It continues to underpin thousands
of jobs in Gibraltar and large amounts of Government
revenue."
"In
order to comply with EU law we must phase out the
tax exempt company in 2010. However, in order to sustain
our successful economic model we must retain a commitment
to a very competitive corporate tax model."
Since
it is no longer legally acceptable to have one tax
model for ‘local’ companies and a different
one for ‘foreign’ companies it is necessary
to have a low tax system for all companies because
without a low tax system for overseas companies they
will leave, and our economy
will suffer hugely. Thousands of jobs would be lost,
as well as significant Government revenue. I have
therefore already said, and I reaffirm now, that the
Gibraltar Government is irrevocably committed to the
principle of ‘low tax’ for our economic
operators."
"By
mid-2010 the Government will have introduced an across
the board flat, low corporate tax rate. This will
most probably be set at 10%, but in any event not
higher than 12%. This will be similar to arrangements
that already exist in Ireland, Cyprus, Malta and other
EU Countries."
"In
the intervening period, the Government will engage
in an intensive, detailed and lengthy process of consultation
with the different economic sectors."
"In
order to signal the Government’s seriousness
of purpose in this respect I am today taking the first
step in the process of reducing corporate tax rates
in Gibraltar, by 2% for the year of assessment 07/08
from 35% to 33%, and with effect from the year of
assessment 2008/09 by a further 3% from 33% to 30%."
"
I would also signal the intention of a further reduction
the year after that to 27%, in anticipation of the
introduction of the flat low tax rate in 2010."
In
July, 2004, it was announced that the Malta Financial
Services Authority (MFSA) and the Gibraltar Financial
Services Commission had entered into a Memorandum
of Understanding on exchange of information. The Memorandum
was signed in Malta on June 30, 2004 by MFSA Chairman
Prof. J.V. Banister and Mr. Marcus Killick, Chairman
and Commissioner of Gibraltar’s Financial Services
Commission.
The MOU set out to establish “a formal basis for co-operation,
including the exchange of information and investigative
assistance in the fields of banking, insurance, investment
services and the provision of professional trusteeship
and company management services, and the exchange
of information on supervisory practices and techniques.”
During Mr. Killick’s visit, bilateral talks were held
on how regulatory and supervisory collaboration between
the two organizations may be further enhanced, including
proposals for reciprocal visits by staff and other
means of improving mutual understanding of the operations
and supervisory techniques of the organizations.
Also
in July, Gibraltar’s Financial Intelligence Unit (GFIU)
was formally admitted as a full member of the Egmont
Group during the Group’s Annual Plenary session held
recently in Guernsey, further enhancing the jurisdiction’s
credentials in the fight against global money laundering
activities. The Egmont Group, which has a current
total membership of 94 countries, was established
in 1995 and brings together anti-money laundering
organisations or financial intelligence units from
all over the world. The Group aims to improve communication
and co-ordination between the various agencies.
Gibraltar first applied for membership in 1998 and
whilst the GFIU was found to be fully compliant by
the Egmont Group, its application was put on hold
due to an objection from Spain to Gibraltar's inclusion
as a full and separate member of the group. However,
at a Plenary meeting of the Group held on 23 June
2004 Gibraltar was unanimously accorded full membership
in its own right.
In
September, 2004, a Memorandum of Understanding on
exchange of information was entered into between the
UK’s Financial Services Authority (FSA) and Gibraltar's
Financial Services Commission (FSC). The Memorandum
establishes a formal basis for co-operation, including
the exchange of information and investigation assistance.
The agreement commited both regulators to providing
full assistance within the limits of the respective
laws of the two jurisdictions, defining confidentiality
constraints and setting up procedures and liaison
points so that information requests can be handled
speedily and efficiently.