Has GBGA’s UK POC challenge hit a wall?

The Gibraltar Betting and Gambling Association’s (GBGA) long-running legal challenge against the implementation of Britain’s point of consumption (POC) tax may have hit a wall after the Court of Justice for the European Union (CJEU) handed down its ruling this week.

The British High Court, in July 2015, requested the CJEU rule on Gibraltar’s relationship within the EU and UK to aid in its determination of the case between the GBGA and Her Majesty’s Revenue and Customs (HMRC).

Gibraltar’s basis for the challenge is its belief that Gibraltar-based operators shouldn’t be penalized by double-taxation as the regime presents barriers to free trade between countries within the European Union bloc.

However, the CJEU’s ruling puts a spoke in the GBGA’s wheel by determining that Gibraltar and the United Kingdom can be treated as a single EU member in certain aspects of EU law.

Although the court confirmed Gibraltar’s separate and distinct status from the United Kingdom, it also said that trade between the two countries differed from trade between two European Union member states due to their relationship and connections.

“It follows that the provision of services by operators established in Gibraltar to persons established in the United Kingdom constitutes, under EU law, a situation confined in all respects within a single Member State,” the court said.

The CJEU’s ruling will form an important part of the British High Court’s ruling on the case.