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GSD again raises tax treaty concerns after Spanish expert echoes party's analysis

Brian Reyes

The GSD has again raised its concerns about the tax treaty for Gibraltar and Spain after a Spanish tax expert last week echoed many of the issues highlighted by the Opposition.
Jorge Sánchez Álvarez, director of the international tax department at Seville-based Montero I Aramburu Abogados, said the treaty will introduce rules that widen the Spanish tax net beyond the remit of existing domestic law and are "unjustified" in many aspects.
As reported by the Chronicle last Friday, Mr Sánchez said the treaty was "different, distinct" to any other tax agreement entered into by Spain "both in its structure and its effects".
He described it too as "imprecise and vague" in many areas, suggesting it had not been drafted - "on the Spanish side" - by technical experts in taxation.
Tax Treaty Criticisms by Spanish Tax Expert Vindicate GSD Position
The GSD said the views expressed by the tax lawyer mirrored those voiced by the GSD repeatedly.
“Mr Jorge Sanchez Alvarez has come to similar conclusions as the House of Lords did as to the one-sided nature of the treaty and also coincides with the GSD’s view of the unfair aspects of the treaty," said GSD MP Roy Clinton, who shadows the public finance portfolio.
"That he goes as far as to describe the treaty as ‘imprecise and vague’ and suggest that it was not drafted by technical tax experts goes to the heart of the matter showing that the treaty is, as the GSD has said throughout, political first and foremost."
"It is also very significant that Mr Alvarez notes that the tax provisions go well beyond anything in current Spanish Tax law and so is open to challenge in court and for discrimination."
Mr Sánchez made his comments during a seminar in the University of Gibraltar that formed part of the annual summer courses organised by the University of Cádiz.
Chief Minister Fabian Picardo also addressed the seminar and, in response to questions, had defended the treaty as a positive step that reflected Gibraltar's wider commitment to the highest standards of regulation and transparency.
"I think it's important that we have that level of transparency," Mr Picardo said at the time.
"I don't think neighbours should be poking each other in the eye."
During his intervention, the Chief Minister referred to the way France and Monaco had used a tax treaty to help generate wealth on both side of the border.
But the GSD picked up on the example and used it to attack the Chief Minister.
"Mr Picardo holds up the tax relationship between Monaco and France, by way of example, to defend the treaty’s intrusive nature, without acknowledging those countries entwined histories, the blockade threats from France that led to that tax relationship and that Monaco is practically a protectorate of France," Mr Clinton said.
"Perhaps unconsciously that is what Mr Picardo is resigned to, but the GSD will not accept any dilution to Spain of Gibraltar’s tax sovereignty, which is what Mr Picardo’s GSLP-Liberal Government has conceded.”