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EU’s Vestager Takes UK To Court Over Gibraltar Tax Exemption

 |  March 21, 2021

The European Commission has referred Britain to the Court of Justice of the European Union for failing fully to recover illegal State aid of up to €100 million (US$118.9 million)granted as tax exemptions in Gibraltar.

According to Reuters, the Commission, which oversees competition policy in the 27-member EU, stated on Friday, March 19, the corporate tax exemptions covered passive interest and royalties between 2011 and 2013 and so took place before Britain exited the European Union.

Margrethe Vestager, the Commission’s vice-president in charge of competition policy, said, “The aid granted by Gibraltar in the form of corporate tax exemption for passive interest and royalties gave an unfair advantage to some multinational companies and had to be recovered by the United Kingdom and the Gibraltar authorities. However, more than two years after the Commission adopted this decision, the aid has still not been recovered in full and sufficient progress has not been made in restoring competition. That is why we have decided to refer the United Kingdom to the Court of Justice for failing to implement this decision.”

Recovery was still pending from Mead Johnson Nutrition and partially from Fossil, the Commission stated.

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