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GSD says Gib could have signed tax treaty, were it not for Spain

Johnny Bugeja

The GSD said the Gibraltar Government was not able to sign the Spain/Gibraltar tax treaty itself because of Spain’s refusal to recognise Gibraltar, and not because of limitations arising from the Rock’s constitutional relationship with the UK.

The treaty was signed by the UK on Gibraltar’s behalf, but the GSD said this was only because of the Spanish position.

The Opposition was reacting after Chief Minister Fabian Picardo told GBC that his government was unable to directly sign the agreement because of Gibraltar’s constitutional status.

Under the constitution, the UK retains competence for defence, external affairs and internal security.

But Mr Azopardi said a mechanism existed to enable Gibraltar’s direct signature on agreements, so long as all parties agreed to it.

“Gibraltar’s constitutional status has not prevented us from signing numerous bilateral international agreements concerning tax with countries such as the United States, Germany, France or Portugal,” said Keith Azopardi, the Leader of the Opposition.

“These are normally simply enabled under a letter of entrustment from the United Kingdom after which Gibraltar can sign the agreements directly.”

“The fact is that this mechanism cannot be used here because Spain has not and would not recognise Gibraltar.”

“Spain would have been unwilling to sign an international agreement with Gibraltar even if there had been a letter of entrustment in place. It is unreal to say otherwise.”

The GSD opposes the tax treaty, which this week secured the backing of the Spanish Congress despite opposition from rightwing parties in Spain, which said the agreement put Gibraltar authorities “on an equal footing” with their Spanish equivalents and failed to push Spain’s sovereignty agenda.

But the GSD believes the treaty is a “harmful, intrusive and unfair agreement”.

“It was a mistake to enter it,” Mr Azopardi said.

“Together Gibraltar, in their reaction welcoming the Spanish parliament’s vote, says the international agreement makes concessions. That, at least, is a genuine recognition of its effect.”

“It is in overall terms a bad agreement for Gibraltar. We will explain why when the motion on it is debated in our Parliament at the end of June.”