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Spain/Gibraltar Tax Treaty – Other relevant agreements

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16 May 2019

Tax residence of entities: Legal persons, entities and other legal structures established and managed in Gibraltar, or governed by its legislation, shall be deemed to have residency only in Spain when any of the following circumstances concur:

(i) The majority of the assets, whether directly or indirectly owned, are located in Spain or consist of rights that may or must be exercised in Spain;

(ii) The majority of the income accrued in a calendar year derives from sources in Spain;

(iii) The majority of the interests in the capital or equity, voting or profit-sharing rights are under the direct or indirect control of either natural or legal personas who are tax residents or linked to tax residents in Spain.

The above shall not apply if the entity has a fixed place of business with an adequate number of employees, qualifications and operating expenditure, and is effectively subject to pay Corporation Income Tax in Gibraltar and it has operated in or from Gibraltar without interruption since 1 January 2011, and it has more than 75% of its income for the tax period ending 31 December 2018 deriving from sources in Gibraltar, and has less than 5% of income from Spanish entities with annual turnover exceeding 6 million euros, or 10% between 3 to 6 millions, or 15% for less than 3 millions.

Administrative cooperation in tax matters: exchange of information, whether automatic, spontaneous or upon request, including simultaneous tax examinations or participation in tax examinations abroad; assistance with collection; transfer of documents. And in particular, annual information on workers registered in Gibraltar as residents in Spain and six-monthly information on vessels, aircraft and motor vehicles registered in Gibraltar relating to tax residents in Spain.

Gibraltar will give as well direct and free access to the records of the Registrar of Companies and Land Registry, and in particular to beneficial ownership information as is public or, on request to the Commissioners of Income Tax in Gibraltar on companies, partnerships and foundations, and on settlors, trustees, beneficiaries, assets of all types of trusts when they are tax resident in Spain or the assets held are located in Spain.

The first exchange of information shall be in respect of tax periods from 1 January 2014 until the date of entry in force of the treaty and it will take place within four months as from the date of ratification.

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