CJEU - Recent Developments in Direct Taxation 2021

S. 1821. Introduction

This chapter considers two cases that originate from Gibraltar: one case – Mead Johnson Nutrition v European Commission (Case T 508/19) – is currently before the General Court; the other case – Fossil (Gibraltar) v Commissioner of Income Tax (Case C-705/20) – is a reference to the Court of Justice from the Income Tax Tribunal of Gibraltar. Both cases arise out of Commission Decision (EU) 2019/700 of 19 December 2018 on the State Aid SA.34914 (2013/C) implemented by the United Kingdom as regards the Gibraltar Corporate Income Tax Regime (“the Commission Decision”). This chapter discusses first the background to the various reforms of Corporate Income Tax in Gibraltar. It then discusses the Commission Decision, after which there is a discussion first of the Mead Johnson case and then secondly the Fossil case.

2. Background – the Corporate Income Tax in Gibraltar

In the 1990s, Gibraltar had a special tax regime for offshore companies which comprised both exempt companies, which were exempt from Corporate Income Tax, and qualifying companies, which paid Corporate Income Tax at a variable rate. In 2001, the European Commission opened a State Aid investigation into the offsh...