Country Rankings - Gibraltar
May 10, 2017 Gibraltar: visionaryThere has been a mix of responses from regulators around the world as to what to do with virtual currencies, of which Bitcoin is the most talked-about example. Some jurisdictions have run a mile, others seem to be just ignoring them, hoping that they will be a geeky fad that soon goes away, while others are deciding to embrace them. What I have noticed though, is that the territories falling into the latter of those three categories tend to be what you would call "offshore." For instance, in 2014, the Isle of Man enabled the formation of the first company with Bitcoin capital and, in October last year, Jersey extended its anti-money laundering and countering the financing of terrorism laws to cover virtual currencies. In July 2016, the first European regulated financial product listed on the Gibraltar Stock Exchange in the form of BitcoinETI, an asset-backed exchange-traded instrument and, last month, the Rock's financial regulator announced that it would soon release proposals for firms engaging in "distributed ledger activities," also known as Blockchain, which is seen as a secure way of recording Bitcoin transactions, among other things. Anti-secrecy campaigners might point out that the anonymity inherent in transacting in virtual currencies makes them a perfect fit for tax havens, and perhaps offshore financial centers are doing themselves no reputational favors by associating themselves with this relatively unknown financial phenomena so readily. But perhaps these IOFCs are just better at spotting emerging trends in business and finance. Many of them saw the e-commerce revolution coming in the late 1990s and legislated early for it, although, ultimately, most failed to deliver on their "e-commerce hub" ambitions. This time, it could be the growth in the nascent Fintech industry they have spotted, hence their willingness to provide accommodating regulatory regimes for virtual currencies. Some say that digital currency is the future. If it is, its future may well be offshore.
Aug 04, 2016 Gibraltar: braveIt is probably fair to say that the world hasn't quite got to grips with Bitcoin. And you could say that's because there's nothing to physically get to grips with, apart from, of course, your smartphone or computer mouse when you decide to open your "virtual" wallet and send a string of code to an invisible purse located somewhere else in the websphere. I'll be honest, the concept of "virtual" money still baffles me, despite attempts to "unbaffle" myself. Virtual currencies still feel nothingy, and illusory. As a Florida judge put it recently when dismissing a case against a man for allegedly laundering money using Bitcoin, virtual money cannot be stashed under the mattress like good old-fashioned cash. Having said this, virtual money is, apparently, the future. Several tax authorities have issued guidance on digital currency, under the general Bitcoin umbrella, and financial centers are now in something of a race to capture as much Bitcoin business as possible. So, if we're giving points for innovation, Gibraltar should be at the head of the line after its stock exchange become the first in Europe to list an instrument invested entirely in Bitcoin. It's either a foolhardy move, or a brave one. But they've said that about a lot of successful inventions.
Mar 07, 2016 Gibraltar: matureYou're probably not going to be too concerned with the interior décor of a building you're attempting to save from crumbling. But, to switch subjects, if you've ever asked your sulky teenage offspring, for about the 100th time that week naturally, to tidy his or her room, you might be familiar with the refrain "I didn't ask to be born!". Likewise, Gibraltar didn't ask to be a British possession perched on a rock in southern Spain, but it is, and has been for the last 300 years. However, Spain just refuses to accept it. Actually, it's very unfair of me to compare Gibraltar to a hormone-fueled adolescent with a persecution complex. Of the two parties, the "Rock" that appears to be the mature one, and Spain the obstreperous child. Because, for a supposedly "mature" nation itself, Spain hasn't exactly covered itself in glory with its recent treatment of its tiny neighbor. It has hectored Gibraltar in all sorts of ways short of sending in troops, making life for its inhabitants about as uncomfortable as it possibly could. And this is because it resents having a British "tax haven" on its door step, and would rather like Gibraltar back. I suppose the thinking behind this is that once it's back in Spanish hands, the harassment will stop – although these tactics have hardly endeared the population of Gibraltar to Spain's cause. Quite the reverse in fact. In a sovereignty referendum in 2002, 98.5 percent of the electorate voted for the status quo. I'm mentioning this subject this week because Spain has long accused Gibraltar of being a hive of money-laundering and tax evasion, and Gibraltar was once again forced to defend itself, quite robustly, recently in the face of what Deputy Chief Minister Joseph Garcia termed "ignorant and unsubstantiated" criticism of the territory from a Spanish MEP. A low-tax jurisdiction it might be. You might even call it a tax haven. But a haven for dirty money? As a member of the EU, it is obliged to have all the relevant EU financial regulations in place, and Brussels simply isn't going to tolerate the presence of a rogue jurisdiction in its backyard. But still the allegations and insinuations come. However, I'd like to know why Madrid hasn't replied to Gibraltar's request to sign a bilateral tax information exchange agreement though. It's almost as if it's useful for the Spanish Government to have Gibraltar in reserve so it can bash it when things aren't going right for it. And another pertinent question: if Britain must give Gibraltar back to Spain, then shouldn't Spain give Ceuta and Melilla back to Morocco? The silence in Madrid is deafening. Some might not like it, but Gibraltar deserves an encomium for quietly going about the business of building a successful, modern economy.
Jun 08, 2015 Gibraltar: pluckyGibraltar is another jurisdiction that seems to have been in an almost constant state of conflict with the EU over tax in recent years. And the "Rock" was again fighting its own small corner of Europe last week, sending Chief Minister Fabian Picardo along to brief the European Parliament's so-called TAXE committee on national tax rulings, with Gibraltar's regime very much in the EU's sights. And brief it certainly was, for the Q-and-A session lasted little more than an hour – surely not enough time for an in-depth discussion on what is a complex and technical area of taxation. There are two strands to the EU probe on tax rulings: whether these rulings were granted to certain companies on a selective basis in breach of EU state aid laws; and whether, by granting these companies favorable tax treatment, they eroded the tax bases of other member states. However, reading between the lines of the various announcements and comments of the key figures overseeing this investigation over the last few months, it seems that they have already decided that, yes, tax rulings, comfort letters, sweetheart deals – whatever you want to call them – can constitute state aid and erode the tax bases of other jurisdictions. So Picardo's trip to Strasbourg was probably a wasted one. The European Commission and Parliament have mostly ignored the fact that tax rulings do perform a very important function as well, which is providing corporate taxpayers with the certainty they need to plan their activities in a certain jurisdiction. And if there's one thing that tends to deter investors above all others, it's legal uncertainty. It seems like the EU is angling towards greater transparency around tax rulings rather than stopping them outright. However, in the 21st century, businesses tend to be highly mobile, and the EU should be very wary of the law of unintended consequences. Something, judging by its past record, it's not very good at.
Jun 13, 2013 Gibraltar: after 300 yearsNow I'm going to surprise you, saying something good about bête noire Algirdas Šemeta, European Commissioner for Taxation, Customs, Anti-Fraud, Audit and Statistics, who has often figured negatively in this column. Well, he has slapped down a Belgian MEP who wanted him to investigate Gibraltar's e-gaming industry, which has been one of the Rock's success stories as it struggles to scrape a living under the lowering glare of "neigbour" Spain, which has trouble accepting the conclusions of the Treaty of Utrecht, which allocated Gibraltar to England "in perpetuity" a mere 300 years ago this year. I wonder if the Gibraltarians will be celebrating? At home, and very quietly, if they have any sense. Anyway, it's good news about the gaming, and let's hope that Šemeta is equally resistant to equivalent siren calls regarding Malta's even more successful gaming regime from the growing number of EU Member States, including the UK, Greece, Spain itself and many others, which are operating illiberal and almost certainly illegal e-gaming regimes under the selectively sensitive noses of the Commission and the European Court of Justice. All countries have got their peculiarities, and they should be allowed to benefit from them: the Dutch have got their water (tulips), the Greeks have got their islands (tourism), the Danish have got their grass (butter) and Malta, which like Gibraltar is mostly made of rock, has got its wits.