GBGA expects PoC case to be referred to EU
Industry body's CEO Peter Howitt says decision over whether Gibraltar's trade with the UK is covered by European law is likely be passed to the European courts
The Gibraltar Betting and Gaming Association’s (GBGA) bid to overturn the UK Point of Consumption tax is “likely” to be referred to the European courts, its chief executive Peter Howitt has told eGaming Review.
A key part of the judicial review of the controversial tax, and central to the GBGA’s case, is the argument that the 15% levy breaches European law, more specifically the Treaty on the Functioning of the European Union Article 56.
However during last week’s proceedings, which overrun into an as yet unscheduled fourth day, the defendant HMRC argued the law should not be applied to Gibraltar due to it being an overseas territory of the United Kingdom.
According to the HMRC, the GBGA’s claim represented a “purely internal situation” and that article 56 should only be applied to individual Member States, which Gibraltar is not.
“In my view the Gibraltar question is likely to be referred and the question will be whether European Community law, and in particular Article 56, applies to services provided from Gibraltar into the UK on the basis that Gibraltar is within the EU yet is not another Member State, nor is it part of the same Member State,” Howitt said.
“However, if anything is referred the case still must be decided in the UK taking into account the answers received from the CJEU,” he added.
The chief executive said the case was dependent on whether the PoC is deemed to infringe article 56 on the basis that it is an extra-territorial tax on operators based elsewhere in the European Union.
“[The tax] hinders [operators’] ability to provide services into the UK and does not have a legitimate public policy aim since it purports to have been implemented to increase UK competitiveness and is not, for example, connected to consumer protection,” Howitt added.
GBGA’s case comes at the same time as the UK Treasury is fighting against the introduction of a Financial Transaction tax, which is currently under consideration in Germany, France and a number of other EU countries.
The UK states the tax, which if implemented would see a levy applied to transactions involving City-based companies, is unlawful because it is extra-territorial and has not been agreed to by the UK.
“Clearly, the UK takes a different view on tax when it might impact its major economic sector i.e. financial services,” Howitt said.
HMRC declined to comment.