Defeat is largely irrelevant

In August 2002 the UK notified the European Commission (EC) of Gibraltar’s proposed reform of corporate tax. The system was to be repealed and three levies a companies registration fee a payroll tax and a business property occupation tax (BPOT) were to be applied to all Gibraltar companies.

In 2004 the commission decided the proposals constituted state aid. It also found the reform was regionally selective since companies in Gibraltar would be taxed in general at a lower rate than those in the UK.

In December 2008 the European Union's General Court annulled the commission’s decision. The EC and Spain appealed to the European Court of Justice (ECJ) which judged the General Court erred in law in finding that the proposed tax reform did not confer selective advantages on offshore companies.

The ECJ said a different tax burden resulting from...