The Chief Minister for Gibraltar, Paul Caruana has announced that they will reduce the corporate tax rate to 10 percent by the year 2010. This tax reduction is to be phased in over a number of years and reductions.
The need for the reduced corporate tax rate is supposedly to bring Gibraltar in line with other the European Union regulations.
Our view
There is an argument, under EU law, that Gibraltar is technically part of the UK. There is a court case in session at present. The case surrounds the fact of whether Gibraltar should or should not have the same tax regimes as the United Kingdom. Gibraltarian authorities are confident that they will be victorious and they will be allowed to continue with their own tax regime and the benefits that it brings. We are not so sure.
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