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After UN speech, GSD slams CM’s ‘spin and delusion’ on tax treaty

File photo dated 26/01/18 of money, as the Bank of England is expected to keep interest rates unchanged at 0.5% next week, but the meeting will be watched closely amid expectations over another hike in May. PRESS ASSOCIATION Photo. Picture date: Sunday March 18, 2018. See PA story ECONOMY Rates. Photo credit should read: Dominic Lipinski/PA Wire

The Gibraltar Government’s defence of the tax treaty for Gibraltar and Spain “is based on spin and delusion”, the GSD said yesterday, as it again insisted that the agreement makes sovereignty concessions to Spain and does not protect Gibraltar’s self-governing status under the 2006 Constitution.

The GSD was reacting after Chief Minister Fabian Picardo, in his address this week to the United Nations Committee of 24 on decolonisation, said Spain had recognised the legal status of the Gibraltarian in the tax treaty, as well as Gibraltar’s institutions of government.

In a statement, the GSD said the treaty and the memorandums agreed under Prime Minister Theresa May’s Brexit deal were “concessionary” and said the Chief Minister was “mistaken” in his analysis.

“The agreements between the UK and Spain, under the umbrella of the Protocol, are all concessionary that favour Spain, on all issues covered, namely citizens’ rights, the environment, police and customs, taxation and the protection of financial services,” the GSD said.

“The GSD have never and do not support these actions of the GSLP/Liberal Government.”

“Further, the GSD do not support the position of the GSLP/Liberal Government that the Protocol and MoUs can form a basis for adoption for agreement with Spain should there be a hard Brexit.”

“The Tax Treaty is effective despite the nature of Brexit.”

The GSD repeated its position that the tax treaty “surrenders elements of sovereignty to Spain” on matters of taxation.

It highlighted, for example, the fact that Spanish nationals working in Gibraltar and companies controlled by Spanish nationals or residents that operate in Gibraltar after a stated date, will be taxed as if they were in Spain.

“It will also be a disincentive to economic growth by taxing Gibraltar companies exclusively operating here as if they were operating in Spain if their directors or shareholders reside in Spain,” the GSD said.

“The concessions are too fundamental to justify any questionable recognition by Spain of Gibraltarians.”

“If Spain was prepared to recognise Gibraltar, its Government, its people and our rights this would have taken a more obvious form than mentioning Gibraltarians so as to tax them as Spanish residents when they return home.”

“As usual Mr Picardo twists the truth to the point that it is not recognisable anymore.”

“What more sovereignty concession than a concession on tax?”

“Gibraltar’s elders will recall the mantra ‘no taxation without representation’. It was the cry of Sir Joshua Hassan’s AACR when the UK tried to tax Gibraltarians before some democracy was introduced.”