European Commission confirms probe into whether Gibraltar tax regime is state aid - La Treizième Étoile: A blog on EU politics
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European Commission confirms probe into whether Gibraltar tax regime is state aid

Sunday, 5 August 2012
European Commissioner Joaquin Almunia has this week confirmed that the Commission was looking into Gibraltar’s new corporate tax regime and whether it constitutes a form of state aid not permitted under current European competition laws.

The Competition Commissioner, who is Spanish, was responding to a written question submitted by Spanish MEP Francisco Sosa Wagner which cited the judgement of 15 November 2011 at the European Court of Justice that Gibraltar’s corporate tax regime contravened European competition law.

In his reply of 30 July, Commissioner Almunia said thatAs Gibraltar's proposed tax reform notified to the Commission in 2002 was never put into effect, the Court's judgement did not require any particular action, either from the Commission or from Gibraltar's Government.

However,he continued, “the Commission is currently examining the compliance of Gibraltar's new corporate tax reform, introduced in 2011, with EU State aid rules in light of the recent Court judgement.

The UK and Gibraltar Government were reportedly informed of this investigation several weeks ago but it was not publicly confirmed until now. Initially it is being handled by civil servants in the Competition directorate in Brussels and is a preliminary step aimed at gathering information from the authorities in Gibraltar. Depending on what they find at this stage, a decision will be made whether or not to open a formal state aid investigation.

UPDATE (09/08):
Responding to this news, a spokesman for No.6 Convent Place told the Gibraltar Chronicle that “The Gibraltar Government is compiling the data necessary to provide a full response […] We are fully confident that the new Income Tax Act complies with all EU laws.

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