EC Ruling on Exempt Companies

Hammered out over the past year in protracted negotiations between Gibraltar, Britain and the European Commission, an agreement to extend the tax exempt status of 8,464 Gibraltar registered companies until December 2010 removes much uncertainty hanging over Gibraltar's Finance Centre.

The agreement, formally announced last month but reached in December, also provides for any existing companies which change ownership - or even the form of their activity - before 30 June next year to benefit from their tax exempt status until 31 December 2007. Uniquely, it also allows new exempt status business until 30 June 2006.

Essentially the arrangement provides Gibraltar's Finance Centre an important breathing space in which to prepare themselves and their clients for changes which have appeared inevitable since July 2001 when the EU Commission first challenged the legality of the Rock's exempt status regime under EU State Aid Rules. For, between now and New Year's Eve 2010,