Gibraltar's regulator, the Financial Services Commission (FSC), has announced that local business will have to pay a 12% levy towards the British Overseas Territory's costs of preparing for Brexit.
The 12% tax will apply to regulated firms that passport into the UK, as these are viewed by the FSC to be the companies that will be most affected by Britain's new status outside the EU and which rely most heavily on access to the UK market.
Gibraltar's government has clarified that this will affect businesses including banks, e-money firms, insurance companies, alternative investment fund managers, insurance captives, MiFID firms, and insurance intermediary firms. The levy will not apply to companies from these sectors that do not passport into the UK, the GFSC added.
The government feels that it is fair and consistent that on this occasion there should be a contribution from the industry and is content to approve the fees regulations to facilitate the UK Single Market Levy."
In a statement the government said: "The government has secured a hugely significant commitment from the United Kingdom government to a reciprocal continuation of the single market in financial services based on the alignment of regulatory outcomes and has worked closely with the GFSC to make this a reality and is cognisant of the resourcing demands related to EU withdrawal and preparing for this continued regulatory relationship with the UK."
The statement went on to say: "The government has and is providing material amounts of extraordinary funding to the Commission and has funded all of the costs of the Legislative Reform Programme which has been years in development, due to the size of the legislative task, and which has now come to fruition."
"On balance therefore, the government feels that it is fair and consistent that on this occasion there should be a contribution from the industry and is content to approve the fees regulations to facilitate the UK Single Market Levy."
The tax has been set at 12% of the total annual regulatory fee for the year ending 31 March 2020.