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Govt publishes tax treaty Bill as deal is debated in Gibraltar and Madrid

New Spanish Foreign Minister Arancha Gonzalez Laya looks on after being handed over the portfolio in Madrid, Spain, January 13, 2020. REUTERS/Jon Nazca

A Bill that will pave the way for the implementation of the tax treaty between Gibraltar and Spain was published yesterday by the Gibraltar Government, as the agreement was discussed in both the Gibraltar and Spanish parliaments.
The Bill has yet to be debated and approved by Parliament here but the Leader of the Opposition, Keith Azopardi, raised the issue and asked the Chief Minister to reflect on recent comments made by Arancha González Laya, the Spanish Minister for Foreign Affairs, during an interview the Financial Times.
In that interview, Ms González told the FT: “We are living in the 21st century; what we have done with the fiscal treaty is probably much more important than we realise for our sovereignty.”
The GSD has long maintained that the treaty is “intrusive and harmful” for Gibraltar because it “surrenders elements of sovereignty” to Spain.
But responding to the GSD Leader, Fabian Picardo once again refuted any suggestion that the treaty impacted on sovereignty in any way, a position he said was backed not just by his cabinet and senior advisors, but by Sir Peter Caruana, who had written legal advice for the government.
The government’s position is that the treaty would help address "deep misunderstanding" in Spain as to how Gibraltar's tax system worked, and was in line with the Rock’s wider commitment to fiscal transparency.
“There is absolutely no question of the international tax treaty between Gibraltar and Spain being anything that could be characterised as a cession on sovereignty,” he said.
“But you could say that these days, for some, it is more important to reach arrangements that are practical, than to simply pursue ephemeral concepts.”
By coincidence, almost at the same time as the debate in Gibraltar was under way, Mrs González Laya was in the Spanish Parliament in Madrid taking questions on foreign affairs during a session of the Foreign Affairs Commission in the Spanish Congress.
She was asked by a VOX MP about her comments on taking a pragmatic approach to negotiations on Gibraltar’s future relationship with the EU and her reference to a “21st century” approach to sovereignty.
In her reply, she skirted any reference to sovereignty but referred again to the tax treaty.
“I would like us not to underestimate the tax treaty on fair tax competition by Gibraltar signed by Spain and the United Kingdom, and to appropriately acknowledge its value,” she said.
“Because that was an Achilles' heel in our relations with Gibraltar, an Achilles' heel that has been addressed through this tax treaty.”
The Spanish Parliament has yet to debate and vote on the Bill that would give effect to the treaty in Spain.
Mrs González Laya was also asked about Spain’s aims in any negotiation regarding its future relations with Gibraltar.
"What does Spain want in any future agreement on Gibraltar? It wants an agreement that respects the interests of Spain, the interests of its citizens, the interests of the Campo de Gibraltar and the interests of its businesses," she said.
But she would not be drawn on the detail of that position.
"You'll understand that it wouldn't be very prudent on my part to tell you publicly what our negotiating tactic will be,” she added.
"That would not be very responsible."