Monday, July 04, 2005

Channel Island fury over Gibraltar tax ‘perk’

EU Directive on Taxation of Savings

The EU Directive on Taxation of Savings that came into force on Friday, to clamp down on tax evasion by residents of member states, was reportedly in chaos this weekend after Jersey and Guernsey claimed that Gibraltar’s special position with Britain, announced by the Gibraltar and British governments on Friday, denied them a “level playing field”.

UK Paymaster General Dawn Primarolo was forced to rush out a statement on Friday afternoon, stressing that the directive had come into force, after other offshore havens, such as Guernsey, began talking of a suspension of the new procedures.

They have tabled discussions of a potential suspension at a Guernsey Policy Council meeting on July 25.

The Sunday Telegraph reported that if the “discrepancy over Gibraltar” is not resolved before this date, the Guernsey authorities may also seek an opt-out from the ruling.

Peter Symes, managing director of Yorkshire Building Society Guernsey, said he had received assurances via the Treasury that the matter would be resolved before the meeting in three weeks’ time. Otherwise he would feel obliged to reassess the society’s position.

However, Primarolo’s statement indicated that it could be some months before the ‘gap’ with the Gibraltar arrangements can be plugged.

Symes described Friday to the Telegraph as the most “awful” day he had ever had experienced. He said:

“No one knows what is happening. We are supposed to have received assurances that the directive has come into force.

But the bottom line is, Gibraltar has not signed up, so we have not got the level playing field which was promised. It could yet all still be revoked further down the line.

At this moment in time, Gibraltar neither has to disclose information nor deduct the withholding tax, giving it an unfair advantage over the rest of us.”

Related Article:

02 July 2005 - UK and Gibraltar Government seek deal on witholding tax

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