Saturday, July 02, 2005

UK and Gibraltar Government seek deal on witholding tax

EU Taxation Directive

The Gibraltar Government yesterday announced that the EU Directive on Taxation of Savings came into effect yesterday July 1st.

The directive is applied to savings income payments made in one Member State to someone resident in another Member State.

Convent Place declared that because the UK and Gibraltar are not separate member states, the Directive does not apply between them.

In a joint statement with the UK Paymaster General, Chief Minister Peter Caruana said the Gibraltar and UK Governments were keen to agree on an arrangement to offer a choice between exchange of information and withholding tax.

A Convent Place spokesman said:

“The Competent Authority in Gibraltar for the administration of the Directive is the Chief Secretary.

The Directive does not apply as between the UK and Gibraltar.

Following consultation and discussion with the Gibraltar Gibraltar Bankers’ Association and the Finance Centre Council, the Gibraltar Government has agreed to the issue of the following statement jointly by the Chief Minister and the Paymaster General, Dawn Primarollo:

"The Savings Tax Directive, which comes into effect today, applies to savings income payments made in one Member State to someone resident in another Member State. Accordingly, because the UK and Gibraltar are not separate member states, the Directive does not apply between them.

The UK and Gibraltar Governments are in discussion and working together with a view to agreeing arrangements to close this gap between them as soon as possible during the next few months, on terms that would offer a choice between exchange of information and withholding tax.”

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