Corporate Countdown - Setting Out A Tax Timetable

This article first appeared in the July / August 2007 edition of Iberian Lawyer

While not as dramatic as anticipated, Gibraltar's recent budget provides a timetable for the long-awaited introduction of a new low corporate tax regime, says Michael Castiel, partner at Hassans.

"The Gibraltar Government's June 2007 budget may have disappointed the local business community, but they and investors will take consolation in the fact that it has now committed to achieve an across-the-board corporate tax rate of 10-12% by 2010," saysMichael Castiel, partner at Hassans.

While Gibraltar's financial services sector may have hoped for a bolder approach to corporate taxation, the Government, he believes, felt constrained by pressures to phase out tax exempt companies by 2010, and the imminent decision of the ECJ on Gibraltar's appeal against the European Commission's ruling on "regionality", in relation to Gibraltar's broader tax proposals.