The European Union Court of Justice (CJEU), the EU’s principal law court has ruled against the motion set by The Gibraltar Betting & Gaming Association (GBGA), that the British overseas territory of Gibraltar should be treated as an independent tax jurisdiction.
The GBGA had set its EU legal dispute against the UK government relating to ‘Point-of-Consumption (POC)’ taxes introduced in 2014 charging online gambling/betting enterprises on revenues generated from British consumers.
Last October the CJEU began its review of the dispute, which specifically asked whether Gibraltar an overseas territory of the United Kingdom has a right to separate its commercial status from the UK in accord with EU business laws?
The GBGA stated that the UK’s industry taxation had breached trade terms set under the ‘Treaty of Functioning for the European Union’. Furthermore, the introduction of POC duties had resulted in Gibraltar licensed betting enterprises being ‘double taxed’, which infringed on EU ‘freedom of services’ laws.
On Tuesday the CJEU rejected GBGA’s motion, stating that as a British overseas territory Gibraltar had gained its access to EU community business laws through its attachment with the United Kingdom.
“It follows that the provision of services by operators established in Gibraltar to persons established in the United Kingdom constitutes, under EU law, a situation confined in all respects within a single Member State,” the CJEU statement read.
The treatment of Gibraltar and the UK as a ‘single Member State’ will add further concerns for industry stakeholders regarding the viability of Gibraltar as an industry jurisdiction post-Brexit.
A number of Gibraltar operators are currently revaluing their operational strategies should Gibraltar be likely impacted by ongoing Brexit negotiations.
Publishing its 2016 annual report last April, FTSE listed 888 Holdings detailed that Gibraltar’s current licensing remit remained ‘unclear’ with regards to servicing European gaming jurisdictions. 888 governance stated that it was reviewing its Gibraltar operations and whether they can service the firm’s strategic goals of increasing its European market footprint.