|By David Eade
The war of words between the Partido Comunista and PSOE in the Campo de Gibraltar continues over the demonstration at our border staged by Izquierda Unida against what Spain calls “paraisos fiscales”.
I will turn to that in a minute but first I want to restate the words of James Tipping of our Financial Centre. When I asked him in June about Spanish offshore accounts he opened his reply with this statement: “I cannot emphasise enough that Gibraltar is now an onshore and internationally cooperative jurisdiction in all aspects e.g. Gibraltar has signed 20 tax information exchange agreements (TIEAs) and 18 are in force.” Therefore in the view of our Financial Centre Gibraltar is no longer a “paraisos fiscales”.
Whilst that is the view here it is not the view of Madrid. In addition when I asked John Christensen of Tax Justice in my July 27 article on Gibraltar’s standing on the secrecy issue he pointed me to last year’s Financial Security Index. This told me Gibraltar was 44th in the index, a ranking based on its secrecy score and scale weighting. Gibraltar had 78 secrecy points out of 100 which puts it at the top end of the secrecy scale. I made the point then and I will repeat it now that there is a large gulf between fact and fiction on this issue and it is one our Financial Centre has to urgently address.
Having said that the Financial Security Index also stated Gibraltar accounts for just one per cent of the global market for off-shore financial services making it a minnow. Indeed it is and whilst Spaniards obviously do bank in Gibraltar the major issue of tax evasion by Spain’s multinationals does not affect the Rock at all.
In my article of yesterday I pointed to the major role played by the Spanish bank BBVA in handling the off-shore funds for Spain’s major companies – but whilst BBVA has bases in numerous “paraisos fiscales” Gibraltar is not amongst them.
In his recent blast against PSOE Luis Almagro, the Campo de Gibraltar secretary of the Partido Comunista stated: “El PSOE siempre se muestra contrario a los paraisos fiscales cuando está en la oposición pero cuando está en el Gobierno se olvida de ellos, ¿será por qué el 80% de las empresas de IBEX tienen negocios en estos lugares y además son responsables del 75% del fraude fiscal en España?”
Obviously Spain, in common with all other major countries, does have a problem with its major companies and other multi-internationals based there who legally limit their tax paid to Madrid by operating in “paraisos fiscales”. It might not be ethical but these companies pay tax experts to ensure it is done legally.
So if 80 per cent of the IBEX Madrid stock exchange listed companies operate in “paraisos fiscales” that is one thing: but you can be pretty sure Gibraltar isn’t on their list. I suspect the key reason for this is that banking in a “paraiso fiscales” is controversial enough but can you imagine the furore if Repsol or Telefonica did so on the Rock.
Whether what these companies are doing amounts to fiscal fraud as Almagro and the Partido Comunista insist it is or careful tax planning and avoidance as the IBEX crew would view it as is a matter for debate. Obviously with Spain in financial meltdown this issue is going to be one not just of debate but very heated debate at that.
However we shouldn’t dismiss the Partido Comunista as being of no consequence. The PCA is the key component of Izquierda Unida and the IU is in coalition with PSOE in the government of Andalucía. Hence it will be a very powerful voice in the Sevilla based government for the next four to five years. The fact that Gibraltar is being unfairly targeted in this campaign is neither here nor there because since when has politics been fair?
What do YOU think?
Have your say in Facebook