In a highly positive development, Robert Jenrick, Exchequer Secretary to the UK Treasury, announced on 15 July that Gibraltar and the UK are to negotiate a Double Taxation Agreement (DTA) and aim to sign the deal “within a matter of months”.
The value of this move should not be understated. The DTA will add more substance to Gibraltar’s international status and provide a new, stronger framework that will underpin and encourage trade and investment between Gibraltar and the UK. It will also put Gibraltar on an equal footing with competing jurisdictions that currently enjoy the benefit of a DTA with the UK.
Gibraltar Chief Minister Fabian Picardo welcomed the announcement, which he said came on the back of “years of hard work” to position Gibraltar as one of the best territories in terms of transparency, tax information exchange and compliance.
“Bilateral taxation agreements remove barriers to international trade and investment and they provide a clear and fair framework for taxing businesses that trade between us,” said Picardo. “They’re positive agreements that should be welcomed by the community, this community in particular, and by service providers, clients and prospective clients of our financial services and other interested industries.
“Once concluded, this agreement is one that will invaluably strengthen our ability at this critical juncture when we expect to leave the European Union with the UK. These are the things that ensure that Gibraltar continues to grow and these are the partnerships that make Gibraltar stronger,” he added.
John Blake, Business Development Director at Sovereign Trust (Gibraltar), said: “The importance to the finance centre of having a DTA with the UK cannot be underestimated. This will enhance and consolidate our international standing as a serious, reputable and transparent jurisdiction in which to do business. It will also place us on a solid footing to seek further DTAs with other jurisdictions. As an international finance centre, it is crucial for Gibraltar to develop our DTA network as much as possible.”
At present there is no indication of what the Gibraltar-UK DTA will include, but an educated assumption is that it will follow existing DTAs that the UK has signed with Jersey, Guernsey and the Isle of Man.
For more information please contact John Blake by email or by phone on +350 200 76173.