  |
Gibraltar suddenly calls itself 'onshore' to escape the G20 tax axe
|
With the G20 meeting due in London this week, the Gibraltar government is pressing ahead with its hope that the Gibraltar finance centre will be accepted as an 'onshore' centre as opposed to an 'offshore' centre. The words 'offshore' and 'taxhaven' have become dirty words in the world financial scene.
The chief minister Peter Caruana, accompanied by finance centre director James Tipping and private secretary John Reyes, flew to London last night for a number of finance centre related engagements. They return tomorrow as the curtain begins to raise for the G20 meeting.
Gibraltar has been changing its stance, accepting that exchange of information on taxation is now inevitable if it is going to avoid the new Black list that is expected to emerge from the G20 meeting.
The Spanish Government has made it its hobby-horse to knock the Rock as if it was the only financial centre in the world, and no doubt will not lose any opportunity this week to highlight what they consider to be detrimental for Gibraltar.
WAY OUT
But the offshore centre, as epitomised by the 'tax exempt' company is already on the way out, given a court ruling that gave Gibraltar breathing space until next year. Now, with the financial crisis having gained the upper hand, the scene has gained greater emphasis. If you are 'onshore' you should be allright, if you are 'offshore' you should have problems.
When the naval dockyard closed in the 1980s, Gibraltar had to push ahead with offshore services to try and fill the economic vacuum which the loss of MOD income had created. Britain was not averse to Gibraltar developing its finance centre at a higher pace than had been the case till then.
So, the Rock managed to survive thanks to a fast developing offshore centre. Now, the offshore centre needs to be phased out of existence.
These are issues that will be talked about at the latest encounters with British officials in London today and tomorrow.
Britain is adopting a tough stance to ensure that words and promises will become concrete guarantees in its myriad of offshore centres as represented by its overseas territories and crown dependencies.
A draft code of practice has been drawn up to determine what is tax avoidance - and the UK authorities will have the final word.
Banks and big business which have used offshore services as part of their policies to heighten profitability will now find the doors to greater wealth closed. The plan is to ensure that tax is paid and not avoided.
'BAD BOYS'
With banks being perceived as the 'bad boys' of the financial crisis, it is thought that they will have no option but to sign on the dotted line, even if they would rather not.
Caribbean offshore centres are likely to be under strict surveillance, but Gibraltar will argue that it is part of the EU and hence applies EU directives and regulations.
There may be other places in Europe that are bound to escape the axe, such as Luxembourg and the Netherlands. The Americans had a problem with their own finance centre of Delaware - but the way out has been the invention of the distinction between 'offshore' and 'onshore' centres, which Gibraltar might also find to be a useful escape route as Mr Caruana knows full well. - JOE GARCIA.
|
|
|
|
