Between The Rock and the hard place

A little taxation is a dangerous thing, according to its neighbor;

But is Gibraltar a tax haven? No, says the government. The Organization for Economic Cooperation and Development (OECD) has excluded Gibraltar from its list of tax havens after it signed 26 tax information exchange agreements with the EU. Although fiscal crime was previously only punished with three months in jail, since last January 1st the offense has carried up to seven years.

However, in Spain these arguments do not convince. "Here, a tax haven is a place that has a VAT of less than 21 percent, a marginal rate of income tax of less than 56 percent and a tax on companies that is less than 30 percent of their profits," says Paula Papp, an expert from International Financial Analysts.

What a difference a day trip makes;

In Gibraltar, the economy is a sensitive subject. The reason is obvious: it is doing very well. Last year, if it had been part of the IMF ranking of nations, it would have had the fourth-highest income per capita in the world, with 41,138 pounds (47,847 euros [$64,000 USD]) a year. In just one year it would have risen from ninth to fourth, driven by an economy growing at 7.8 percent annually.  

That's more than twice the figure for Spain.