icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

Spain & Britain ink Gibraltar tax deal ahead of Brexit

Spain & Britain ink Gibraltar tax deal ahead of Brexit
A fiscal treaty regarding disputed Gibraltar has been signed by Spain and Britain. Hailed as “massively significant” by Gibraltar’s leader, it is part of a deal sealed in November between London and the EU on Brexit.

The deal must now be approved by the Spanish cabinet and ratified by the parliaments of both countries.

Gibraltar’s leader Fabian Picardo said the Spanish government had pledged “that the effective implementation of this treaty will lead to Gibraltar being removed from the Spanish blacklist of tax haven jurisdictions in the future.”

Also on rt.com Borders & barriers: Could Spain derail Brexit because of Gibraltar?

According to Spain, the treaty provides “clear rules to more easily resolve conflicts of tax residence” and allows for “the reduction and elimination of tax fraud and [other] effects that harm the Spanish Treasury, deriving from the nature of Gibraltar’s tax regime.”

Gibraltar offers very attractive tax rates for businesses and capital. Corporate profits are taxed at a top rate of 10 percent compared with 25 percent in Spain. There are an estimated 55,000 companies registered in Gibraltar even though the population is just around 30,000.

READ MORE: Time to close down Gibraltar, major part of criminal network

It is “essential” that Gibraltar’s departure from the EU, planned for March 29 with Britain, takes place “in an orderly way and in keeping with Spanish interests in terms of fighting fraud and tax evasion,” said Madrid.

The Spanish Foreign Ministry noted that the treaty’s text stipulates that individuals and other entities in Gibraltar must register their tax residency in Spain if that is where they earn most of their revenue, own most of their assets, or if a majority of their owners or managers live there.

Also on rt.com Spain will not use Brexit to retake Gibraltar – Spanish foreign minister

Spain has long criticized Gibraltar’s low-tax regime, while the latter has argued that it is a crucial part of its services-based economy.

Spanish Foreign Minister Josep Borrell welcomed “the first international agreement signed by Spain and the United Kingdom over Gibraltar since the Treaty of Utrecht,” which dates back to 1713 and saw Spain cede the “Rock” to Britain.

A tiny British territory located at the southern tip of the Iberian Peninsula, Gibraltar has long been a point of contention between the UK and Spain. Madrid asserted a claim to the territory despite it being ceded to the British Crown centuries ago after being captured from Spain. Over the years, the Spanish have tried various attempts to retake the land.

For more stories on economy & finance visit RT's business section

Dear readers and commenters,

We have implemented a new engine for our comment section. We hope the transition goes smoothly for all of you. Unfortunately, the comments made before the change have been lost due to a technical problem. We are working on restoring them, and hoping to see you fill up the comment section with new ones. You should still be able to log in to comment using your social-media profiles, but if you signed up under an RT profile before, you are invited to create a new profile with the new commenting system.

Sorry for the inconvenience, and looking forward to your future comments,

RT Team.