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Gambling tax blow as Gibraltar is deemed ‘one entity’ with UK

Britain and Gibraltar count as one EU state in terms of a key aspect of the single market, a senior EU lawyer has said in an opinion that could affect the territory’s life after Brexit.

The lawyer rebuffed a challenge by Gibraltar’s huge electronic gambling industry, the mainstay of its flourishing economy, against new taxes imposed by Britain in 2014.

The industry said Britain was trying to tax what should be part of the free movement of services, one of the so-called “four freedoms” of the EU market along with people, goods and capital.

But the advocate general to the European Court of Justice (ECJ), Maciej Szpunar, “takes the view that, for the purposes of the freedom to provide services, Gibraltar and the UK are to be treated as one entity,” the court said in a statement.

Therefore the UK has the right to impose the domestic tax, because it is not covered by EU law, which would bar London from introducing a tax having an impact on another EU state.

The ECJ is not obliged to follow the advocate general’s rulings when it hands down its final decision but it frequently does.

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