Spain is going to remove Gibraltar from the list of tax havens. The kingdom has been moving towards this decision for a long time, since the distant 1991, when the same black list was created.
This was finally made possible by the entry into force of the Agreement on Taxation and Protection of Financial Interests between Spain and the United Kingdom in respect of this overseas territory of March 4, 2019. A significant event took place on March 13 this year.
The objectives of this unprecedented contract are: ️
– application to Gibraltar of rules equivalent to the European ones in terms of tax transparency and the fight against money laundering after the UK left the EU;
– Strengthening cooperation and information exchange between Spain and the British colony to prevent old problems related to tax evasion.
?The agreement sets out clear rules governing when an individual and legal entity will be considered tax resident in Spain. ⠀ In the case of individuals, one of the following conditions must be met: • stay in Spain for more than 183 days a year; • residence of the spouse (s) of the person (or equivalent) or dependents in Spain; • finding the only permanent home in Spain; • the location of two thirds of the net assets of an individual in a sunny country. ⠀
With regard to legal entities , under the Agreement, these include companies, trusts, foundations and similar organizations.
Such persons are considered taxpayers if one of 4 conditions is met:
• most of the assets are located in Spain;
• most of the income for the calendar year comes from Spain;
• most of the individuals responsible for good governance are tax residents in Spain;
• most of the capital, voting rights or participation in profits is controlled by individuals who are taxpayers in Spain, or legal entities associated with tax residents in Spain.
The above terms and conditions apply to all legal entities registered in Gibraltar after November 16, 2018.