Else Beekman
Gibraltar’s Chief Minister, Fabián Picardo, revealed in an interview on RTVE’s ‘La Noche en 24 Horas’ that Spain is expected to remove Gibraltar from its list of tax havens before the finalisation of the ongoing treaty negotiations between the European Commission and the UK.
“This was discussed, agreed upon, and signed as the first treaty since Utrecht. Spain committed to removing Gibraltar from the tax haven list, and we are close to seeing that happen,” Picardo stated in the interview.
By taking Gibraltar off this list, Spain acknowledges that Gibraltar’s financial regulations and tax practices have improved to the point where it no longer considers it a place used for tax evasion or aggressive tax avoidance. This change could positively impact Gibraltar’s international reputation and economic relations, especially with Spain and the European Union.
Tax transparency and reporting
As part of the process of being removed from the tax haven list, Gibraltar would likely need to comply with international tax transparency standards. This would lead to increased information sharing with Spain and other EU countries, enhancing fiscal cooperation. Additionally, individuals who are tax residents in Gibraltar but maintain ties to Spain, such as property or family connections, may face greater scrutiny from Spanish tax authorities. This could impact cross-border financial activities and require more detailed reporting of income and assets.
Treaty negotiations nearing conclusion
While Picardo remains optimistic about the treaty, he avoided setting a specific timeline. “I no longer dare to predict dates,” he admitted. Additionally, he noted that it has been nine years since the Brexit referendum, which led the UK and Gibraltar to exit the EU. However, he emphasised that the resolution of the “few remaining issues” is close. “A well-constructed agreement is better than a quick one, as it will last longer,” he added.
Passport stamping to track Gibraltarians’ stays in Spain
One significant change on the horizon is the introduction of passport stamping for Gibraltarians entering Spain. This measure will officially document their length of stay within Spanish territory, a step linked to ensuring Schengen Zone security. Picardo acknowledged that recent border queues were exceptional cases and emphasised the need for strict adherence to the Schengen Code. He highlighted the importance of balancing security requirements with maintaining fluid movement for daily commuters between Gibraltar and Spain. Until a formal agreement is reached, both sides aim to minimise disruptions, which have generally been rare except for occasional incidents.
Customs and immigration controls: a key sticking point
Negotiators currently focus on customs and immigration controls, a complex issue tied to Schengen security and Gibraltar’s economic integration. “96% of goods arriving in Gibraltar come through the EU,” Picardo explained. A proposed solution would place Schengen entry and exit points at Gibraltar’s port and airport, monitored by Spanish police. Picardo assured that the arrangement would not affect British sovereignty over Gibraltar or Spain’s claim to the territory.
Political climate favours resolution
Picardo highlighted the positive political environment, noting progressive administrations in London, Madrid, and Gibraltar. Furthermore, he expressed hope for a fluid transition at the border for daily commuters until a formal agreement is reached. “We’ve found a way to ensure Schengen security without hindering daily movement between Gibraltar and Spain,” he affirmed.
Environmental controversy: sea reclamation projects
Addressing environmental concerns, Picardo defended Gibraltar’s land reclamation projects, comparing them to similar activities at Algeciras Port. He argued that these projects are conducted in British territorial waters, in line with the United Nations Convention on the Law of the Sea. However, environmental groups in Spain have raised concerns about the ecological impact of these reclamation projects. That is to say, they are planned in a Special Conservation Zone (ZEC) of the Strait of Gibraltar. This is a marine protected area within the European Natura 2000 zone.