Yesterday July14th 2026 was signed the agreement between the European Union (EU) and United Kingdom (UK) involving also Spain and Gibraltar (GIB) which rules about different topics, among others, but not limited, the termination of the so called “Gate” between Spain and the “Peñon”.
Today July 15th, citizens of both jurisdictions will be supposedly able to cross the gate with no migration controls. Actually, GIB will become “Schengen” territory.
Those are relevant milestones but focusing on taxation, among those measures, a very important one was put in place during the last two weeks:
Spain removes Gibraltar from the Spanish Tax Haven Black List (recently renamed as Non Cooperative Jurisdictions List).
Direct international taxation
This measure will improve the business relationship between the two countries as several barriers will disappear out of this, among others but not limited to:
- The application of participation exemption (dividend exemption) for dividends and funds repatriation to Spain from GIB subsidiaries or permanent establishments
- Less scrutiny in tax audits
- Less strict applicability of the CFC (anti-abuse fiscal transparency rule) for controlled entities in GIB
- Improvement in Fiscal Unity (Group taxation or fiscal consolidation) tax treatment.
- Rules affecting to both Venture Capital Risk (Sociedad de Capital Riesgo) y SICAV, UCITs, ETF’s etc (entidades de inversion colectiva)
- Some minor change in Merger and acquisition regime.
- Despite attraction of tax resident may occur regarding GIB entities, it will not be automatic as used to be.
Indirect taxation
There has been changes in:
- VAT;
- Local special taxes;
- Customs and duties
So we will address this topic in a separate detailed article.
International tax field
Please note that the UK-Spanish tax treaty is not applicable to GIB but the convention dated 2019 regarding Gibraltar between the UK and Spain which is the reason why Spain has removed GIB once a real and effective exchange of info between the two countries has shown to be effective (as well GIB adhering to the OECD inclusive framework BEPS and Pillar Two).
Transfer Pricing
Please be aware that operations between Spanish parties and other entities or individuals residents in black listed countries, like GIB in the past, were subject to transfer pricing anti abuse rules as well as documentation obligation, no matter whether parties were related or not. GIB being now out of the Black List, Transfer Pricing will apply only for operations between related parties as any non black listed jurisdiction. Remember that transfer pricing in Spain not only for companies but also individuals, so that Private Clients and HNWI are exposed to this anti abuse rule as well.
Recent fiscal years tax risks
As all this improvement arising from removal from black list applies to the future operations and business, it is important that companies and individuals tax resident in Spain (or GIB entities with activity with Spanish parties) review whether some tax liabilities may apply for the open to audit tax years, meaning 2022 and following fiscal years, as there is no possitibe restrictive benefits from today and future tax treatment.
Tax Optimization
It is then a proper time to analyze how Spanish companies, groups as well as individuals/directors and entrepreneurs may be affected with this new tax framework. Important also to review how other EU or LATAM groups/businesses may operate with GIB without the application of anti-abuse measures as long as those are real business and out of potentially aggressive tax schemes.
Do not hesitate to contact Andersen Tax Department for any further information or documentation.
You can download the full document here.
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