Leaked documents show that Spain wants to use its veto over the application of any European Union deal with the United Kingdom to Gibraltar to force citizens of the Rock to accept higher taxes.
The document, entitled Negotiations About the Exit of Britain from the EU, has been attributed to the Spanish foreign ministry. It claims that “Gibraltar has developed an extremely permissive regime in terms of taxes, customs and the establishment of companies which has practically converted it into a tax haven”.
Businesses in Gibraltar pay a 10 per cent tax whilst personal income is taxed at 20 per cent, according to The Times.
Spain, on the other hand, levies a 29 per cent corporation tax on businesses. Income tax varies by region, reaching a high of 56 per cent in Catalonia – a relatively productive area with a strong independentist movement.
The ministry asserts that “Spain cannot accept that the EU negotiates with the United Kingdom a relation that is not compatible with the Spanish position over the territorial claim, that does not respect Spanish interests, the interests of the Spanish [living near Gibraltar] and that does not impede the unfair competition with Spain”.
The Rock’s chief minister, Fabian Picardo, has warned Brussels and Madrid that the Gibraltarians will not take ill-treatment “lying down”.
Today’s front page. pic.twitter.com/MSePeXz5Py
— Gibraltar Chronicle (@GibChronicle) May 2, 2017
“If anybody thinks that they can discriminate against the people of Gibraltar and that we’ll take it lying down, they’ve got something else coming,” he told crowds celebrating May Day.
“We will deal with any attempt to discriminate against or prejudice the people of Gibraltar in the way that every nation does: with the principle of reciprocity. What they do unto us, we will do onto them and theirs.”
The chief minister had previously indicated that Spain’s belligerent position could end up having negative consequences for the many Spanish citizens who currently make their living in the British Overseas Territory.
“At present, their ‘brilliant’ politicians have ‘successfully’ negotiated a clause that will not automatically extend [protections] to Spanish workers in Gibraltar if such arrangements are negotiated between the UK and the EU,” he pointed out.
“Well done. In Gibraltar we say ‘ponte un badge’ when you achieve such great pyrrhic victories.”
— Jack Montgomery ن (@JackBMontgomery) April 1, 2017