November 01, 2021

Tax Treaty between Spain and Gibraltar

The Tax Treaty between Spain and Gibraltar came into effect on 4th March 2021, the taxable period of which will come into force in Spain as from 1 January 2022.

Gibraltar companies which are established and managed in Gibraltar, or are governed by Gibraltar law, shall be considered to have residency only in Spain when any of the following circumstances exist:

  • The majority of the assets, whether directly or indirectly owned, are located in Spain or consist of rights that may or must be exercised in Spain;
  • The majority of the income accrued in a calendar year derives from sources in Spain;
  • The majority of the natural persons in charge of effective management are tax resident in Spain;
  • The majority of the interests in the capital or equity, voting or profit-sharing rights are under the direct or indirect control of either natural persons who are tax residents in Spain or legal persons, entities and other legal structures or arrangements linked to tax residents in Spain.

If no action is taken, from 1st January 2022 the company may be considered a tax resident in Spain and so it will be required to comply with Spanish filing/taxation requirements.

If you have any concerns as to whether this could affect your company, and what options may be available to your company, please contact your company manager.