Friday, Sept. 22, 2006

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Gibraltar tax decision welcomed by Internet gaming firms

By Sarah Polson

A recent European Court ruling upheld Gibraltar's taxation authority as established by the territory's 1969 constitution. This is good news for online gambling companies based on the island who have enjoyed the low tax jurisdiction and were facing a possible 30% tax from the United Kingdom if the decision had gone the other way.

The tax benefits that these companies receive in Gibraltar had been threatened by the European Union.

The European Commission had said in 2004 that tax rules in Gibraltar provided companies based there with an unfair advantage. To make it fair, the commission said Gibraltar had to abolish its exempt company tax regime and implement a replacement tax regime by 2010.

However, the European Court ruling reversed that decision based on the fact that Gibraltar's 1969 constitution provides the territory with fiscal autonomy, and determined that the region be allowed to continue providing companies with an attractive tax regime.

Related article: Gibraltar Makes Winning Bet With Online Gambling

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