Gibraltar’s tax authorities breaking EU law

Gibraltar’s tax and customs authorities are breaking European Union (EU) law
by not only failing to cooperate with the rules of foreign EU-member states,
such as Spain, but with mainland British agencies, the European Court of Justice
has ruled.

Judges have decided that even though the UK-dependent territory is not part
of the EU’s customs union, it should work with other tax and customs enforcement
organisations, under a 1977 directive, as amended.

This mandates ‘mutual assistance by the competent authorities of the member
states in… direct taxation… VAT and certain excise duties’.

Britain has been resisting European Commission calls for full cooperation,
saying that Gibraltar had no responsibility to comply given that EU rules on VAT
and excise duties to not apply on the Rock.

But judges said that Gibraltar needed to exchange information with other tax
authorities to safeguard its own interests.

‘The exclusion of Gibraltar from the (EU) customs territory does not mean
(it) falls outside the requirement of mutual assistance’, ruled the court.

And by failing to make sure this cooperation happens, the British government
had broken its EU treaty commitments, said the ECJ, which has the power to fine
the British government if it ignores the ruling.

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