Luxembourg, 22/07/2005 (Agence Europe) - The United Kingdom has been found guilty of excluding Gibraltar from part of the scope of the Directive on mutual assistance in the field of taxation, explains a Court of Justice press release, pointing out that the 'of Gibraltar does not fall outside the requirement of mutual assistance by the competent authorities of the Member States in the fields of VAT and excise duties.'
A 1977 directive (77/799/EEC amended by Directive 79/1070/EEC and Directive 92/12/EEC) concerns mutual assistance by the competent authorities of the Member States in the field of value added tax (VAT) and certain excise duties. The Act of Accession of the United Kingdom provides that Community acts on the harmonisation of legislation of Member States concerning turnover taxes are not to apply to Gibraltar, and also excludes Gibraltar from the Community customs territory. Therefore the United Kingdom took the view that the provisions of the directive on VAT and excise duties did not apply to Gibraltar. The Commission challenged this and has won its case.
The Court explains that the relevant exception to the application of Community law in the territory of the European Community must be given an interpretation which limits its scope to that which is strictly necessary to safeguard Gibraltar's interests. Provisions which merely require cooperation between the Member States, leaving each of them to use their own methods of enquiry and communication of information, are not 'acts on the harmonisation of legislation of Member States concerning turnover taxes'. The amended directive refers to the limits to exchange of information arising from the laws or administrative practices of the Member State concerned and does not go beyond that cooperation. As for excise duties, the Court of Justice says that the exclusion of Gibraltar from the Community customs territory does not mean that Gibraltar falls outside the requirement of mutual assistance by Member States' competent authorities in this field. The fact that the Gibraltar authorities are subject to that requirement has no bearing on any non-application to that territory of provisions requiring harmonisation of those duties as such.