At the conclusion of a very busy period of negotiations with a large number of jurisdictions, Gibraltar's government yesterday signed a further three Tax Information Exchange Agreements ('TIEA') with the Faroe Islands, Greenland and Finland. This brings the total number of TIEAs signed by the Gibraltar government to thirteen, one more than the magic number twelve, as a result of which, Gibraltar has now been moved on to the so-called 'White List' of jurisdictions that have substantially implemented the internationally agreed standard (see below progress report updated 20 October 2009).
The process of signing these agreements auspiciously began on 31 March 2009 with the signing of a TIEA with the United States of America on the eve of the G20 summit, during which summit the role of offshore jurisdictions in the practical quasi-collapse of the global financial system was put under the microscope. At the signing ceremony, the Chief Minister Mr Peter Caruana sat along the table from the US Treasury Secretary, Mr Timothy Geithner and entered into the process of moving Gibraltar from the 'grey list' firmly on to the white list. The international pressure for the achievement of a level playing field has been growing inexorably as a result of the world's many, varied and potentially catastrophic financial woes. This level playing field, although not yet a reality, is now a distant form on the horizon which the international economic community will now focus on as it ramps up efforts to ensure that the TIEAs signed, not just by Gibraltar but by all other participating jurisdictions, are actually enforced through a monitoring process.
The significance of this achievement cannot be overstated. For Gibraltar this development is a crucial element of its reinvention as a specialist finance centre in Europe, capable of offering world-standard solutions in a dynamic, responsive, fully-compliant yet sensible environment of regulation which meets with all the requirements, not just of the EU, but now also those of the OECD.
With the implementation of a 10% flat rate of corporate tax already in progress, the development of a funds industry set, potentially, to act as the European solution to the challenges of the proposed Alternative Investment Fund Directive, the success of Gibraltar's Finance Centre industry is assured. Throw in the attractive personal tax regimes and the benefits of its reputation, location, climate and lifestyle, Gibraltar's stock is surely on the up.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.