Gp12 IBudgeBt RAp22 Tax LTAAug/Sept/ORct 2013 INTERNATIONAL F I N A N C E l I N V E S T M E N T l B U S I N E S S AIFMD A new dawn for the European Alternative Investment Funds Sector www.gibraltarinternational.com SPONSORS Gibraltar International Magazine is grateful for the support of the finance industry and allied services (with the encouragement of the Finance Council) in the form of committed sponsorship. We would like to thank the following sponsors: GIBRALTAR FINANCE CENTRE Tel: + (350) 200 50011 • Fax: + (350) 200 51818 www.gibraltar.gov.gi DELOITTE QUEST INSURANCE MANAGEMENT LTD. Tel: + (350) 200 41200 • Fax + (350) 200 41201 Tel: + (350) 200 74570 • Fax + (350) 200 40901 www.deloitte.gi www.quest.gi EUROPA TRUST COMPANY LIMITED BARCLAYS Tel: + (350) 200 79013 • Fax + (350) 200 70101 Tel: + (350) 200 41222 www.europa.gi www.barclays.com/wealth HASSANS GIBTELECOM Tel: + (350) 200 79000 • Fax + (350) 200 71966 Tel: + (350) 200 52200 • Fax: + (350) 200 71673 (SLHKPUN.PIYHS[HYSH^ÄYT www.gibraltarlaw.com www.gibtele.com GRANT THORNTON KPMG with a tried and trusted reputation Tel: + (350) 200 45502 • Fax: + (350) 200 51071 Tel: + (350) 200 48600 • Fax: + (350) 200 49554 www.grantthornton.gi www.kpmg.gi since 1905. BAKER TILLY (GIBRALTAR) LTD SAPPHIRE NETWORKS Tel: + (350) 200 74015 • Fax: + (350) 200 74016 Tel: + (350) 200 47200 • Fax + (350) 200 47272 www.bakertillygibraltar.gi www.sapphire.gi Property t Family PIRANHA DESIGNS TRIAY & TRIAY / T&T MANAGEMENT Tel: + (350) 200 45599 • Fax + (350) 200 52037 SERVICES LTD Dispute Resolution t Financial Services www.pdg.gi Tel: + (350) 200 72020 GIBRALTAR INSURANCE ASSOCIATION (GIA) Tel: + (350) 200 76108 Shipping and Admiralty t Employment Tel: + (350) 58452000 www.triay.com • www.ttms.gi www.gia.gi Corporate, Commercial & t Intellectual Property & BDO LIMITED eBusiness Trademarks CREDIT SUISSE (GIBRALTAR) LIMITED Tel: + (350) 200 47300 • Fax: + (350) 200 47590 Tel: + (350) 2000 4000 • Fax: + (350) 2000 4900 www.bdo.gi www.credit-suisse.com/gi Private Client & Tax t Criminal SG HAMBROS BANK (GIBRALTAR) LTD ISOLAS / FIDUCIARY GROUP Tel: + (350) 2000 2000 Tel: + (350) 200 78363 Fax: + (350) 200 79037 Tel: + (350) 200 76651 www.privatebanking.societegenerale.com/hambros Triay & Triay, 28 Irish Town, Gibraltar www.gibraltarlawyers.com www.fiduciarygroup.com Tel: +350 200 72020 t Fax: +350 200 72270 tPUMV'[YPH`JVTt^^^[YPH`JVT www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 3 Aug/Sept/Oct 2013 EDITORIAL COMMENT Volume 19/ Number 3 Confidence Contents faces tests NEWS P6 here is undoubted confidence in Chief Minister Fabian Accelerating growth to bring “on target” economy Picardo and his team at being able to achieve the Airport leads the way in rate of tourism growth Manifesto commitment to grow Gibraltar’s Gross TDomestic Product (GDP) by over 10 per cent a year on FUNDS P10 average in each of their four years term of office to reach £1.65bn AIFMD - a new dawn for the European Alternative by 2014/15. Investment Funds Sector In year one, there was an 8 per cent improvement, leaving growth now averaging 10.5 per cent per annum to be achieved. BUDGET P12 Picardo says this is “despite the many suggestions from some Gibraltar Budget 2013 quarters that this was impossible”. The Chamber of Commerce eGAMING P14 called it a “stellar-like growth”, for example. Undaunted, Picardo Developments in gaming post KPMG Summit boasts the economy is “on target to deliver or exceed the ambitious target we set”. FUNDS P16 It’s somewhat surprising therefore, to find the government’s Auditing of funds ensures investor ‘fair deal’ first full year budget prediction for the current year of near static revenue, Import Duties and taxes – personal and corporate PROPERTY P18 combined – all are expected to be little more than in 2012-13. New office projects in sight to combat “low availability” Overall after a “modest” 5 per cent rise in expenditure, Picardo PENSIONS P19 “conservatively” expects a £17m surplus, sharply down on Growing appeal as a home for retirement schemes 2012-13. So where is the growth to come from? The government BANKING P21 believes its programme of investment in building around 1,000 Building reserves for expanding bank social homes and other commitments such as the planned new power station will be the drivers to enable GDP growth. But TAX P22 since most of that extra income will be in taxes from construction Leading the way on tax to gain “a level playing field” workers and some higher business profits, the Budget clearly doesn’t anticipate those effects working through in the current INVESTMENT P24 year. New countries being targeted for inward investment And there are uncertainties over European and global TERCENTENARY P27 economic fortunes, important since Gibraltar’s economy in large “Determination” marks tercentenary of peace Treaty part rests on a growing finance centre, tourism and on-line gaming, where the UK represents a significant threat to income BUSINESS ROUND UP P28 by proposing to tax bets at source. Only time will tell if Picardo’s confidence is well founded – GIBRALTAR INTERNATIONAL MAGAZINE but the previous administration used extensive construction work on the new airport terminal, for example, to fuel GDP Published by Gibraltar No part of this publication may be growth previously. International Publications Ltd . reproduced without the written The leadership on tax evasion and exchange of information G7 Cornwall's Centre permission of the publishers. is certainly more achievable – indeed it is already part-delivered. PMB 104 The publishers have tried to PO Box 561 ensure that all information is Gibraltar has a draconian approach to tax evasion and money Gibraltar accurate, but emphasise that they laundering, with Zero tolerance, as will be seen by the numerous cannot accept responsibility for bi-lateral, international and Euro-wide measures that have been any errors or omissions. The adopted by the territory or concluded progressively over a period Editorial enquiries publishers accept no responsibility from 2005, but rapidly in the past 18 months under Picardo. [email protected] for statements made by contributors or for any claim However, the true result for these efforts to ensure tax made in an advertisement. evaders have nowhere to hide will be in the additional income to Advertising enquiries [email protected] the Treasury, and other governments in the world stand to be far © 2013 Gibraltar International greater beneficiaries than Gibraltar, even if in the US there are Publications Ltd. Design claims the cost of administration of exchange under FATCA will [email protected] be as great as any extra income gained. Showing that exchange of information works is a necessary UK Agent: means of ‘encouraging’ individuals to ‘fess-up’, so it’s a pity that Tel: + 44 (0)1993 703560 Gibraltar, so far, has been reluctant to give any details of activity, other than a creditable response to the relatively few TIEA requests. All of this however, leaves Spain nowhere to go in its (false) claims that Gibraltar is a conduit or destination of evaded tax money from Spain. There’s one way for the Spanish to find out, of course: put it to the test and seek out tax information. Ray Spencer 4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS Accelerating growth to bring “on target” economy £138.5m, Picardo assured in his Gibraltar’s economy is “on target to deliver or exceed the speech, had been kept under tight ambitious target” of £1.65bn by 2015/16 “despite the continued control to end the financial year European and global economic downturn”, Ray Spencer reports largely in line with the original budget. That was the confident prediction year, “directly attributable to a However, an increase of of Chief Minister Fabian Picardo reduction in PAYE collections around £7m over the original when delivering his first complete from a number of different sec - budget was required to meet year budget in June, confounding tors particularly the construction the recurrent costs of four “the many suggestions from some industry” as well as lower self- Government-owned companies, quarters that [achieving 50 per employed receipts. including the new Gibraltar Air cent growth in four years] was However Corporation Tax, Terminal. impossible”. a significant indicator of the Other areas of revenue each He delivered his forecast jurisdiction’s business health, year include housing and com - after saying that early estimates grew 8 per cent in 2012-13 mercial rents and general rates, point to 2012-13 GDP reaching to reach £64.7m. It was an airport departure tax, the Port £1.23bn - a rise of 7.8 per cent. unexpected result that the Chief Authority and tourism sites, for However, Picardo said growth Minister identified as “a signifi - example. would accelerate, in particular as cant increase”, particularly after The important gaming sec - a result of construction of around last year’s caution that “this tor, accounting for an estimated 1,000 affordable houses, and it increased revenue stream will 21.6 per cent of GDP, contributed would “comfortably surpass” his need to be closely monitored” to a total of £48.1m in gaming and promise of £1.65bn GDP at the see if it was sustainable. Gibraltar Income Tax and company tax and PAYE, 6 per end of this government’s first In the years to 2011 - when Corporation Tax for the financial cent above 2011-12. term of office. the Zero Rate Corporation Tax year 2012/13 reached £189.6m, However, gaming’s impor - Picardo acknowledged “yet was available to many compa - marginally above the £189.4m tance to Gibraltar can best be another year of economic prob - seen in the £17.2m (and growing lems throughout the rest of because some companies have Europe and most of the rest of not yet reported) Corporation the world”.