Britain and Gibraltar are part of the same market according to an opinion from the European Union’s Advocate general, a ruling that hurts Gibraltar’s challenge of UK online gaming taxes and could affect the protectorate after the Brexit vote.
The ruling came after Gibraltar’s challenge of new UK online gambling taxes or point of consumption taxes imposed in 2014. Gibraltar’s online gaming industry challenged that the UK was taxing the free movement of services within the EU.
Advocate General to the European Court of Justice Maciej Szpunar issued an opinion in the case saying his office “takes the view that, for the purposes of the freedom to provide services, Gibraltar and the UK are to be treated as one entity,” the court said in a released statement.
Szpunar said the UK tax is a domestic tax not covered by EU law as it does not affect another EU state.
The court is not obligated to affirm the advocate general’s rulings in a final decision, but generally supports such rulings. Britain’s High Court had asked the EU Court for a ruling on whether Gibraltar was considered a separate territory than the UK.
The ruling could have implications for the small protectorate and its large online gaming industry as the UK goes through with its exit from the European Union. Gibraltar is part of the EU due to its status as a British overseas territory. Its residents voted overwhelmingly against the UK leaving the EU. Gibraltar officials have said they hope to negotiate a different associate relationship with the EU as Britain withdraws.
As for the advocate general’s ruling, Gibraltar’s government said it “notes the opinion,” but would not comment until the final judgment of the European Court of Justice.
