Gibraltar continues to be a tax haven for Spain. The Ministry of Finance has approved the order that determines “the countries and territories, as well as harmful tax regimes, which are considered non-cooperative jurisdictions.” One more year, there is the British colony, which, on the contrary, does not appear on the list of the European Union last October. The denomination occurs in the midst of diplomatic negotiations to reach an agreement to tear down the fence that separates Gibraltar from the Peninsula and define the fit of the territory in the European Union after the departure of the United Kingdom. And four weeks before the two-year term that Spain was given to lift the rating expires, if Gibraltar complied with the commitment to exchange tax information signed with London.
Today’s order updates the so-called list of “tax havens” as required by the law of 2021 measures to prevent and combat tax fraud. This text included the update of the list of tax havens based on the new parameters of the EU and the OECD, point out from the Treasury, although this does not imply that the lists have to coincide with the one drawn up by Brussels. The European Union no longer considers Gibraltar a tax haven. The Spanish Treasury also recalls that the actions to combat tax fraud are part of the requirements to receive European aid, specifically component 27 of the Recovery Plan.
The new list is known just one month after two years have passed since the signing of the Tax information exchange and double taxation agreement between the United Kingdom and Spain on Gibraltar, which was to serve as a basis for removing the territory from the group of those who do not cooperate fiscally.
“The effective application of this agreement is the basis for the exclusion of Gibraltar from the list of tax havens,” reads a letter sent by the then Secretary of State for the European Union, Juan González-Barba, to the British ambassador in Spain. , Hugh Elliott. “For this case, Spain will adopt the pertinent measures within the current legal framework so that Gibraltar is not considered a tax haven within Spanish legislation. within two years from the entry into force of this agreement [13 de marzo de 2021]”, continued the letter, read by the plain “main minister”, Fabián Picardo, in his Parliament, according to the transcript to which this newspaper has had access.
Debugging of the list of tax havens
It so happens that today is the first complete purge of the list, which was created in 1991. 18 territories or countries have come out (including the United Arab Emirates, residence of King Juan Carlos) and another 24 are indicated.
Although Brussels has removed Gibraltar from its list, the International Financial Action Task Force (created by the G8 to combat money laundering and terrorist financing) maintains it as a jurisdiction “under increasing monitoring” to solve “deficiencies in its tax regimes against money laundering.” Since the high-level agreement with the institution in June 2022, the territory “has made progress” but has yet to implement certain policies against tax fraud.
The European Union and the United Kingdom have been negotiating for two years to put black on white the New Year’s Eve Agreement between London and Madrid, which aims to resolve the pending issues regarding Gibraltar after the departure of its metropolis from the EU. After twelve rounds, in which Spain and Gibraltar have also been present, it has not been possible to solve the main stumbling blocks of the Treaty, namely: the presence of Spanish agents in the port and Gibraltar airport to control customs and people entering the European Schengen area; the issue of British military facilities and personnel moving in and out of Gibraltar; tobacco smuggling or tax issues themselves.
At the end of last year, the talks were close to derailing, as this newspaper reported. The Foreign Minister, José Manuel Albares, pointed out that Spain had already presented its Treaty proposal and that it was on the ball for the United Kingdom to accept it or not. Negotiations resumed a few days ago, so far with no known result.
Other British territories under the magnifying glass
The list of regions that the Treasury considers “non-cooperative jurisdictions and harmful tax regimes” covers 24 territories. Most countries and territories included Are they islands or small archipelagos? spread over different continents. Many of them, in addition, are territories that belong to countries such as the United Kingdom or the United States or island states of Oceania.
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Among the territories, Bahrain also stands out, one of the kingdoms of the Persian Gulf and the only Arab country present in the Treasury classification.
The law approved in 2021 for the prevention of tax fraud expanded the necessary characteristics to consider a territory a tax haven. Thus, in addition to transparency and exchange of information, it is also demanded that there be tax equity, “identifying those countries and territories characterized by facilitating the existence of offshore companies aimed at the profit attraction without real economic activity or due to the existence of low or no taxation”, as indicated by the Treasury.