MADRID: pain will target what it considers to be Gibraltar’s “unjustifiable privileges” on tax in Brexit negotiations.
A leaked Spanish government report has revealed Madrid will use its veto over the future of Gibraltar in post-Brexit Europe to target “unfair competition” in the British overseas territory.
Gibraltar describes itself as a “low-tax regime”, but denies being a tax haven. Corporate tax on the Rock is 10 per cent, while in Spain companies pay 25 per cent.
Just days after Spanish Prime Minister Mariano Rajoy said that his government did not have “red lines or lines of any colour” on the post-Brexit future of Gibraltar, an internal government document leaked by the newspaper El País has revealed that Madrid is actively planning to alter the Rock’s status.
The European Council’s approved guidelines on negotiating Brexit with the UK government externalises the issue of Gibraltar, specifying that Madrid and London must come to an agreement separately on whether the eventual terms between the EU and Britain should also apply to the Rock.
Noting that Gibraltar has “developed its own permissive regime of taxation, customs and company registration, which in practice have made it into a tax haven”, the report states that the territory’s “situation has become one of unjustifiable privilege”.
