Friday, March 11, 2005

ECJ Rules against Spain and Commission

VAT and Gibraltar duties harmonisation

Antonio Tizzano, Advocate General for the European Court of Justice has asked the judges of the Court to reject a case brought by Spain and the European Commission which sought to oblige Gibraltar to impose VAT and set duties at the same rate as in Britain.

The root of the case against Britain was the failure to implement an EU Directive on direct and indirect taxation in Gibraltar.

Sig Tizzano has expressed serious doubts as to the justification for the action. Britain had always maintained that the situation in Gibraltar is set by the terms first established in the Accession Treaty.

The Advocate also considers that Britain is not obliged to apply to Gibraltar the terms of another directive that requires disclosure of specific duties. This is understood to be a reference to duties on fuel, tobacco and other such items.

The Commission is being told to pay Britain's and its own costs and the Spanish Government to meet its cost for joining in the action.

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