Tax treaty will damage Gibraltar's economy, GSD says

Gibraltar will lose business, inward investment and jobs as a result of the tax treaty with Spain, the GSD said yesterday, as it lambasted Chief Minister Fabian Picardo for resorting to "mindless nationalism" to counter Opposition criticism of the agreement.

In a statement, the Opposition insisted it would move to terminate the treaty of elected into government at the next general election.

The GSD was reacting after the Chief Minister accused the party of "siding with Spain" and "undermining" Gibraltar's economy with its criticism of the deal.

Earlier this week, Mr Picardo had addressed the UN Committee of 24 and praised the agreement, in which he said Spain had recognised Gibraltar's tax authorities and the legal status of the Gibraltarian.

Mr Picardo insisted too that the agreement made no concessions to Spain on sovereignty.

But yesterday the GSD remained firm in its stance that the tax agreement is "flawed" and "bad for Gibraltar".

The Opposition said the agreement treats some Gibraltar companies as if they were resident in Spain even when they are doing no corporate trading in Spain, and will tax some Gibraltarians for four years as if they were in Spain even after returning home to Gibraltar.

Additionally, the agreement taxes Spaniards and Spanish companies as if they were in Spain even though they conduct their activities in Gibraltar or live here.

“This is a Treaty that will mean the loss of business, inward investment and consequently jobs," said GSD Leader Keith Azopardi.

"It is unfair on Gibraltarians returning home to Gibraltar. And this is what they signed up to in their indecent haste. It is not a fair and neutral double taxation agreement."

"It is on the heads of this Government."

Mr Azopardi said the government had signed up to the deal without consultation and in breach of its promise to debate the matter in Parliament beforehand.

"We understand that Mr Picardo doesn't like to be reminded of this uncomfortable truth and flawed agreement but he is not defending Gibraltar by twisting the truth of what his concessionary deal does at the UN or anywhere else," Mr Azopardi said.

"Nor are we siding with Spain by pointing out these flaws given that they are the actual legal effect of what the Government have signed up to."

"Mr Picardo cannot cajole the GSD into hiding that from people by a shallow appeal to mindless nationalism."

"He needs to deal with the present and justify to people why he entered into a deal which is so different to the UK Government’s own tax agreement with Spain."

Mr Azopardi said the UK Government's tax agreement with Spain was "neutral and fair" and contained no concessions to Spain.

He said the GSD stood ready to debate the agreement in Parliament and called on the Chief Minister to set a date for the motion he has tabled.

"So far he has been avoiding debating the tax motion in Parliament," Mr Azopardi said.

"He should table it as soon as possible so everyone can see what a bad agreement this is."

“As we have made clear if we are elected to Government at the forthcoming general election we intend to request the termination of the tax treaty and its replacement with a fair and neutral double taxation agreement that does not unfairly penalise Gibraltarians, Gibraltar companies or harm our economy."