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Gibraltar

For over 300 years, Gibraltar has been a self-governing British Overseas Territory. Having in turns been occupied by the Spanish and Moorish empires, in 1704 Gibraltar became a British Crown colony, and ever since has been strategically important in the defence of Britain and her allies. Gibraltar‘s imposing presence and location on the turbulent straits that lie between the Atlantic ocean and the Mediterranean sea, separating Europe from the continent of Africa, ensured its historic role in shipping, international trade and communications from the earliest days. Today, it is also a finance centre, a principal centre for insurance and online gaming, and a tourist location.

STEP Gibraltar branch page

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New developments
  • Success at the European Court of Justice (ECJ) in December 2008. The Gibraltar government can now continue with its plans to introduce a low corporate tax regime, competitive with other rates currently existing within the EU. Proposed new low flat rate of corporate tax to be introduced by 1 July 2010, anticipated to be set at approximately 10 per cent. Draft legislation to be issued in June 2009.
  • Signed first tax information exchange agreement (TIEA), with the USA.
  • Limited liability partnerships (LLPs) introduced.
  • New personal pension legislation being introduced.

1. Introduction

a. History and background

For over 300 years, Gibraltar has been a self-governing British Overseas Territory. Having in turns been occupied by the Spanish and Moorish empires, in 1704 Gibraltar became a British Crown colony, and ever since has been strategically important in the defence of Britain and her allies. Gibraltar‘s imposing presence and location on the turbulent straits that lie between the Atlantic ocean and the Mediterranean sea, separating Europe from the continent of Africa, ensured its historic role in shipping, international trade and communications from the earliest days. Today, it is also a finance centre, a principal centre for insurance and online gaming, and a tourist location.

Gibraltar has internal self-government, while the UK oversees defence and external affairs. Gibraltar, a member of the European Union (EU) since 1973, complies with EU law, incorporating EU directives into domestic legislation, including those governing companies, banking, insurance, investment business and direct taxation. Gibraltar is excluded from the Common Agricultural Policy and Common Customs Tariff. It levies certain import duties, but no value added tax.

On 28 December 2006, a new constitution came into force that incorporates a constitutional relationship with the UK (not based on colonisation).

The currency is the pound sterling (GBP), with the Currency Notes Act 1934 conferring on the government of Gibraltar the right to print its own notes, and the obligation to back and exchange each printed note with sterling reserves at a rate of one pound to one pound sterling.

b. Legal system

English common law and equity is applied in Gibraltar. It has its own Parliament that passes statute law in the form of Acts, many of which are based on English statutes. Several English statutes have been incorporated directly into Gibraltar law by English Law (Application) Act.

The court system follows that of the UK. The Court of First Instance deals with small civil cases. The Magistrates’ Court deals with minor criminal matters, licensing and road traffic offences. The Supreme Court Higher deals with higher-value civil cases and more serious criminal matters. Appeals are made to the Gibraltar Court of Appeal. In certain cases, there is a further right of appeal to the Privy Council in the UK.

Editorial board
Andrew Gardner TEP
STM Fidecs Management Limited, Gibraltar
Elizabeth Plummer TEP
STM Group plc, Gibraltar

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