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Bloomberg
Gibraltar was ordered by European Union regulators to reclaim some 100 million euros ($114 million) in tax breaks that aimed to lure multinational firms to the British territory.
The European Commission said Gibraltar’s corporate tax exemption rules for interest and royalties unfairly favored some multinational firms. It also judged illegal five tax rulings involving some income from Dutch partnerships. Gibraltar must now assess the precise amount companies must repay to authorities. “Gibraltar gave unfair and selective tax benefits,†EU Competition Commissioner Margrethe Vestager said in emailed statement.
“This preferential tax treatment is illegal†The decision ends a five-year probe into Gibraltar’s tax exemptions for interest, mainly from intra-group loans, and royalty income from 2011 and 2013. The EU also examined 165 tax rulings, saying the documents may not have enough information to ensure the companies were taxed in the same way as others based in the territory.