The tax agreement between Gibraltar and Spain, with the somewhat longwinded title of The International Agreement on Taxation and the Protection of Financial Interests between the United Kingdom of Great Britain and Northern Ireland and the Kingdom of Spain regarding Gibraltar, came into force this week, having now been ratified by all three parties. Although the Gibraltar government is able to carry out its own negotiations, in many cases final agreements of this type have to be signed by the UK government on Gibraltar's behalf after receiving authorisation to do so.
The aim of this treaty is to improve tax cooperation and exchange of information between the tax authorities of Spain and Gibraltar and it also sets out rules and mechanisms for resolving conflicts over residency. A press release issued by the Gibraltar government says its arrangements "will provide for greater administrative cooperation, information sharing and for addressing relevant disputes through a Joint Committee structure".
Chief Minister Fabian Picardo said: "This is an important step forward in tax cooperation with our neighbours and I trust it will be seen as undeniable evidence of Gibraltar's commitment to transparency which is widely recognised internationally. We are ready to start the work of exchange of information that is provided for in the Treaty and we look forward to building strong institutional and interpersonal relationships with the relevant Spanish tax authorities in this field, as we have alreadydone with tax authorities around the world."
The treaty will benefit people who are resident in Spain and work in Gibraltar as it guarantees that the benefits of the double taxation agreement will apply to them.