This is the first time that Gibraltar’s tax system has been fully endorsed by both the Code Group and ECOFIN.
In November 2012, the EU Code of Conduct Group found that Gibraltar’s Income Tax Act as adopted in 2010 was "a harmful tax measure", on the basis that the non-taxation of inter-company loan interest income in practice benefited transactions with non-residents.
In a statement, Gibraltar’s chief minister Fabian Pcardo said that “the Government has therefore been working very intensely indeed with the European Commission in finding a way to address that concern”.
Pcardo added that “Gibraltar’s listing as a harmful tax jurisdiction under EU Code of Conduct criteria has been damaging to Gibraltar’s reputation over the last 15 years. Code Group approval has eluded us since its creation in 1997”.
The amendment made in June “had been found satisfactory and has now given Gibraltar, for the first time, a clean bill of health under this important process”, he said.
Gibraltar’s zero-10 corporate tax regime is not affected.
International Adviser reported in December last year that almost a year to the day after Jersey and the Isle of Man finally had their zero-10 corporate tax regimes approved by ECOFIN, Gibraltar was under scrutiny from the EU body.
