For Spain, Gibraltar will soon no longer be a tax haven

Spain's Ministry of Finance has published a draft ministerial order that will formally remove Gibraltar from the country’s blacklist of tax havens, ending a designation that has stood since 1991.

The draft order will undergo a public consultation for seven working days closing on June 1, after which it will be published in Spain’s official gazette, the Boletin del Estado.

It will come into force the day after publication and in effect will mean that Spain no longer views Gibraltar as a tax haven.

The order proposes Gibraltar’s removal from Spain’s blacklist on the basis that it meets Spain’s criteria for fiscal transparency and tax fairness under Spanish law.

Gibraltar has appeared on Spain's list of non-cooperative jurisdictions since the very first iteration of that list, when Royal Decree 1080/1991 of July 1991 classified Gibraltar as a tax haven.

That designation persisted through successive reforms over 35 years, notwithstanding Gibraltar's well-established record as a transparent and internationally cooperative jurisdiction.

Gibraltar has been on the OECD whitelist for tax transparency since 2009 and has never appeared on the European Union's own list of non-cooperative jurisdictions in respect of tax information exchange.

When the tax treaty between Spain and the United Kingdom in respect of Gibraltar entered into force in March 2021, Spain committed explicitly to remove Gibraltar from its blacklist within two years.

That commitment was not met on time.

That now seems set to change, with Gibraltar among several other jurisdictions to be removed including Barbados, Dominica, Samoa, Seychelles and Trinidad and Tobago.

The Spanish list was last updated in 2023 but Gibraltar was kept on it, an issue repeatedly raised in Gibraltar by the Opposition.

Chief Minister Fabian Picardo made clear publicly that Gibraltar would “pull out” of the tax treaty if Spain did not honour its undertaking.

The publication the draft order on Thursday fulfils that commitment.

“This is a long-overdue and very welcome step by Spain,” said Chief Minister Fabian Picardo.

“For 35 years, Gibraltar has carried the label of a tax haven.”

“That label was wrong. It was wrong when it was first applied in 1991, and it became harder to justify with every passing year as we built one of the most transparent, well-regulated financial centres in the world.”

“Spain has now started the process of correcting the record.”

“The commitment made in 2021 when we signed the International Tax Agreement was clear: delist Gibraltar.”

“It took longer than it should have, and that delay had real consequences for our economy and our reputation.”

“But what matters now is that Spain is acting on its word.”

“This is good news for Gibraltar, for our financial services sector, and for the many businesses and individuals on both sides of the border whose working lives were affected by this outdated designation.”