The Spanish Treasury has submitted to public consultation—until last Monday, June 1—the Draft Order that will modify the list of “countries, territories, and harmful tax regimes deemed non-cooperative jurisdictions.”
Among the updates, the most notable is the proposed removal of Gibraltar, Dominica, Barbados, Seychelles, and Trinidad and Tobago as non-cooperative jurisdictions, meaning they would no longer appear on the Spanish blacklist.
Conversely, the Draft Order plans to incorporate the tax regime applicable to Russian international holding companies as a harmful tax regime.
Alignment with International Standards
The projected modifications stem from the reform introduced by Law 11/2021, which adapted the traditional concept of “tax haven” to the broader and more updated term “non-cooperative jurisdiction.” This 2021 reform aligned Spanish regulations with international standards promoted by both the European Union and the OECD, incorporating criteria related to tax transparency, effective exchange of information, and the existence of harmful tax regimes.
Regarding the specific case of Gibraltar, KPMG experts point out that the Rock was first included in the Spanish list of tax havens via Royal Decree in 1991. In March 2019, Spain and the United Kingdom signed a tax treaty regarding Gibraltar that introduced significant progress in terms of the tax residence of individuals and legal entities, enhanced administrative cooperation, and information exchange.
The Draft Order now justifies its removal from the list by considering that Gibraltar currently complies with transparency and fair taxation standards.
Key Tax Implications for Gibraltar
According to the experts:
“The exclusion of Gibraltar from the Spanish list would represent, from the perspective of domestic Spanish tax regulations, a structural change in its tax treatment, as it would stop automatically triggering certain anti-abuse measures provided for in domestic law (Personal Income Tax – IRPF, Corporate Income Tax – IS, and Non-Resident Income Tax – IRNR). Generally speaking, Gibraltar would be treated as an ordinary jurisdiction. This would imply the elimination of reinforced presumptions (for example, regarding the presumption of deductible expenses in Corporate Income Tax).
Likewise, the automatic exclusion of certain tax benefits would disappear. This includes the exemption for double taxation in Corporate Income Tax or the exemption for work performed abroad provided for in Article 7.p) of the IRPF Law. Until now, these were not applicable to transactions or deployments linked to Gibraltar due to its status as a non-cooperative jurisdiction, but they would now become potentially applicable subject to the general requirements of domestic regulations.”
However, it is worth noting that there is currently no Double Taxation Treaty between Spain and Gibraltar. Consequently, certain issues remain unresolved, such as the application of withholding tax under the IRNR regarding income obtained by Gibraltar residents who do not have a permanent establishment in Spain.
