After the UK Government’s decision to implement a point of consumption tax of 15% on the gambling operators which services are remotely provided to the local customers, the tension between the UK and Gibraltar has heated up. Now the Gibraltar Betting and Gaming Association (GBGA) has been trying to overturn the UK’s decision over the tax heading the matter to the competent European Union’s authorities.
As a result, the case has been referred by the UK High Court to the Court of Justice for the European Union (CJEU), which is to examine the decision of the UK for the implementation of the 15% point of consumption tax. The principal law court of the European Union economic community would now be the competent authority that is to issue a ruling over the situation of Gibraltar as a British overseas territory and more specifically, on the matters of its legal status when it comes to the local gambling industry.
The CJEU will have to make a decision if Gibraltar has the right to separate its legal status from the UK within the European Union laws regardless of the fact that it is a British overseas territory. The Court has been requested to clarify the status of Gibraltar, and more specifically the matters in regard to its gambling and betting sector before the broader issue of taxation levels to be finally settled.
The 15% point of consumption tax was implemented by the UK in December 2014, following the pre-emptive legal battle that has been initiated by the Gibraltar Betting and Gaming Association. After on June 23rd the UK citizens voted to leave the European Union, the tension between the UK and Gibraltar have become even greater. This week, the Court of Justice for the European Union officials have started the review of the web-based gambling industry.
The GBGA argued that the new tax regime that introduced the 15% point of consumption tax is not compatible with the Treaty on the Functioning of the European Union’s (TFEU) Article 56. In addition, the GBGA shared its belief that the 15% point of consumption tax unlawfully restricted the services supply to the UK, which was not allowed under Article 56.
On the other hand, HM Revenue & Customs argued on this matter, saying that the relevant taxes which are imposed on gambling are not related in any way to Article 56 due to the fact they are domestic taxes which do not exclude British overseas territories.
- Author
Daniel Williams
