The British overseas territory is currently considered a tax haven by Spain. Gibraltar is part of the European Union, but it will also leave the bloc when Brexit eventually takes place. Companies based in Gibraltar may then see a rise in their tax bill for exports to the EU. Spain is set to decide whether to Gibraltar should remain a tax heaven in the coming months.
José Manuel Lizanda Cuevas, the head of the regional inspection team of the Tax Agency and Treasury inspector, said: “Gibraltar would be considered as a tax haven for all purposes, without the possibility of benefiting from the exceptions provided for tax havens that are members of the European Union in certain articles of the Corporate Tax Law, for example, exemption of dividends, capital gains and income from permanent establishments.”
Gibraltar opted out of the EU customs union in 1972, meaning it has much lower taxes than Spain.
For example, there is a corporate tax rate of 10 percent in Gibraltar, while Spain’s is 25 percent.
But Spain will have the power to decide whether Gibraltar will still remain a tax haven following Brexit.Meanwhile, Mrs May’s Brexit deal is expected to be brought back to the House of Commons for a third vote next week, despite it already being rejected by MPs twice.
If MPs vote the deal through, there will be a Brexit delay until May 22.
But if they say no again, the delay could only last until April 12.
Then the UK will need to decide whether to seek another extension or leave without a deal.
But Gibraltar’s chief minister Fabian Picardo believes revoking the UK’s Article 50 notification is the only way “to take back control” of the Brexit process.
He said to Sky News: “If MPs support the withdrawal agreement we can leave without having to have a catastrophic bump on the road for the UK.
“If MPs do not support the withdrawal agreement then parliament has already said no deal should be taken off the table.
“The EU said ‘we won’t even start negotiating withdrawal with you until you give the Article 50 notice’.
“Well, now we’ve seen all their cards. Let’s revoke and let’s slowly determine for ourselves, as a nation, together, what we want to do in the future.
“I would still advocate remaining. Even if you advocate leaving, this may be the best way to engineer how the UK leaves in the future.”