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Gibraltar loses landmark lawsuit on EU passporting

Gibraltar has lost a landmark legal battle to be recognised as a separate EU state for tax purposes, in a ruling that deals a further blow to the British overseas territory’s hopes of securing a special status post-Brexit.

Gibraltar loses landmark lawsuit on EU passporting

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The European Court of Justice (CJEU) has ruled against The Gibraltar Betting and Gaming Association (GBGA), a trade body representing offshore gambling operators, as it fought for an exemption from the UK’s 15% point of consumption (POC) tax on operators.

The association successfully challenged the tax in the UK’s High Court on the grounds that the rocky territory on Spain’s southern tip can be treated as a separate entity to the UK with regards to EU passporting and the freedom to provide services.

The GBGA argued that the 15% levy is “an unlawful restriction on the supply of services to the UK”, violating EU law.

It was then referred to the CJEU, with UK judges unclear as to whether this was the case.

However, CJEU has rejected the claim, explaining that, under article 56 of EU law, Gibraltar and the UK cannot be regarded as two member states.

The court concluded that “the provision of services by operators established in Gibraltar to persons established in the UK constitutes a situation confined in all respects within a single member state”.

Brexit ‘special status’

The landmark ruling deals a major blow to The Rock’s hopes of achieving a special status after Britain pulls out of the European Union.

However, James Tipping, director of Gibraltar Finance, a government body promoting the British overseas territory’s commercial interests, has previously told International Adviser that although Gibraltar “aspires” to maintain access to the single market post-Brexit, it is resigned to losing its EU passporting rights.

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