The state of Gibraltar has secured approval from the European Council of Economic and Finance Ministers for its Income Tax Act, which has made it compliant with the EU Code of Conduct for Business Taxation, reports International Adviser.
The state of Gibraltar has secured approval from the European Council of Economic and Finance Ministers for its Income Tax Act, which has made it compliant with the EU Code of Conduct for Business Taxation, reports International Adviser.
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Gibraltar’s tax system now has full endorsement from both the Code Group and ECOFIN. The EU Code of Conduct Group in November 2012 found that the country’s Income Tax Act, which was adopted in 2010, was a harmful tax measure.
The flaw in the tax act was due to a policy related to non-taxation of inter-company loan interest income, which benefited transactions with non-residents, as reported by International Adviser.
Fabian Pcardo, the chief minister of Gibraltar, said: "The Government has therefore been working very intensely indeed with the European Commission in finding a way to address that concern.
"Gibraltar’s listing as a harmful tax jurisdiction under EU Code of Conduct criteria has been damaging to Gibraltar’s reputation over the last 15 years. Code Group approval has eluded us since its creation in 1997."
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By GlobalDataPcardo added that the amendment made in June "had been found satisfactory and has now given Gibraltar, for the first time, a clean bill of health under this important process."
