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Spain/UK: Agreement to prevent unfair competition in Gibraltar reached

By  |  March 4, 2019

The government of Spain, represented by Minister Josep Borrell, signed a new treaty with the United Kingdom to regulate the relations between both nations around the territory of Gibraltar, preventing the British colony from “being a focus of unfair tax competition.” The agreement is the first specifically to deal with Gibraltar since 1713, when the famous rock was ceded to the British government under the Treaty of Utrecht.

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    The new deal establishes fiscal rules in the cross-border area, detailing (along with four additional memoranda) what the relationship between Spain and Gibraltar will be like after the United Kingdom leaves the European Union at the end of the month. Spain has taken advantage of the imminent departure to extract commitments from the United Kingdom, agreeing with the latter that people who spend more than half of the year in Spain, as well as companies with a majority of assets in Spanish territory, must pay taxes in Spain – blocking the use of Gibraltar as a kind of tax haven. Gibraltar currently has only 30,000 inhabitants, with 55,000 registered companies.

    The government of Gibraltar must share fiscal data with its Spanish counterpart, including some automatic data transfers of workers, vehicles, vessels and aircraft registered in the Rock. The objective of the treaty will be “to prevent Gibraltar from cocentrating unfair tax competition with the rest of the territory,” said Minister Borrell.

    Full content: El País

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