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EU closes in on Gibraltar tax dealings

01 October 2014, 19:23 CET
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(BRUSSELS) - The European Commission on Wednesday deepened a probe into the tax affairs of Gibraltar, the tiny British territory that is suspected of attracting major corporations to its shores with promises of low taxes.

The announcement comes the same week as EU regulators confirmed a similar probe into Ireland, which is specifically accused of offering an unfair tax arrangement to iPhone-maker Apple.

Gibraltar's government immediately denied any breaches of EU tax law and said it was cooperating with Brussels.

In the line of fire are so called "tax rulings", special negotiated deals governments offer companies to entice them to set up shop in their country.

The EU's Spanish Competition Commissioner Joaquin Almunia, who steps down later this month, believes these deals constitute state aid and therefore breach EU rules on an open internal market.

The Commission announced several probes on "tax rulings" this summer, while warning that other countries could later get added.

Other than Ireland with Apple, the Netherlands is accused of illegal tax links with coffee-shop chain Starbucks, while Luxembourg is under probe over a deal with Fiat Finance and Trade, the financial arm of the Italian carmaker.

In Gibraltar's case, the EU is in fact widening an overall probe of the enclave's corporate tax regime, with 165 tax separate arrangements under the microscope.

The leader of the British-governed territory on the tip of southern Spain, First Minister Fabian Picardo, said in a statement that "Gibraltar complies with all EU rules."

The statement said Gibraltar would be "very vigorously contesting" allegations against its tax-assessment methods.

"We are fully confident we will prevail once a fair and unbiased analysis of the issues is made by impartial decision-makers," it said.


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