Gibraltar bound

Gibraltar bound

Gibraltar was not subject to VAT under article 28 of the Act of Accession. Under article 29 it did not form part of the EC Customs territory and was not subject to the harmonised rules on excise duties. On that basis the UK did not transpose the provisions of the EC Council Directive 77/799 into national law in relation to Gibraltar. (Under this Directive Member States are required to exchange any information which appears relevant for the correct assessment of income and capital gains tax and indirect taxes.) The EC Commission said that the UK should transpose the provisions and initiated infringement proceedings.
The European Court of Justice said that article 28 only excluded 'acts on the harmonisation of legislation of member states concerning turnover taxes' not enquiry and communication under the directive. Thus the UK had failed to fulfil its obligations in not...