After 35 years, Spanish authorities have decided to remove Gibraltar from their list of ‘tax havens’. The decision will have very positive tax and political implications for ‘The Rock’, in particular for cross-borders workers and businesses.
Spain’s Hacienda tax authority has opened for public comment a ministerial order that removes Gibraltar from the list of “non-cooperative jurisdictions” for tax purposes, a designation it had held since 1991.
The draft ministerial order also establishes the removal of Barbados, Dominica, Samoa, Seychelles, and Trinidad and Tobago from the aforementioned list .
Conversely, Russia has been added to the list of jurisdictions that are considered non-cooperative, due to the eastern superpower’s reportedly detrimental tax regime.
The text states that the order will come into effect the day after its publication in Spain’s Official State Bulletin (BOE) and that it will apply to taxes accrued from its entry into force and to other taxes whose tax period begins from that moment.
The Government of Gibraltar has welcomed the publication of the draft ministerial order by the Spanish Treasury.
In a statement released Thursday in a press statement, reported by news agency EFE, Gibraltar’s Chief Minister Fabian Picardo said that this measure is “a long-awaited and very welcome step.”
“For 35 years, Gibraltar has carried the label of tax haven. That label was unfair,” Picardo argued.
“It was unfair when it was first applied in 1991, and it became increasingly difficult to justify as we developed one of the most transparent and best-regulated financial centres in the world.
“Spain has now begun the process of correcting the narrative,” he concluded.
According to the Gibraltar government’s press release, the draft ministerial order will be subject to a seven-day public consultation that will close on June 1st 2026, and will come into force the day after its publication in the BOE.
This is likely to coincide with Gibraltar’s new post-Brexit treaty coming into force this summer.
The regulation “proposes excluding Gibraltar from the list established by Order HFP/115/2023, considering that Gibraltar already meets the criteria of fiscal transparency and tax fairness required by Spanish legislation”.
Gibraltar was included on Spain’s list of tax havens from the first version of that list in 1991 and remained so through successive reforms for 35 years.
The British Overseas Territory has been included on the OECD’s white list since 2009 and has never appeared on the European Union’s list of non-cooperative jurisdictions.
In March 2021, when the International Agreement on Taxation and the Protection of Financial Interests between the Kingdom of Spain and the United Kingdom of Great Britain and Northern Ireland concerning Gibraltar entered into force.
At that time, Spain “expressly committed to removing Gibraltar from its list within two years” but commitment was not met within the stipulated timeframe.
“It has taken longer than it should have, and that delay has had real consequences for our economy and our reputation,” Gibraltar’s leader said
“But the important thing now is that Spain is keeping its word.
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“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 have been affected by this outdated rating,” Picardo stated.
Gibraltar’s paraíso fiscal (tax haven) designation created major financial and diplomatic consequences for individuals and businesses operating across the border, all of which will cease to exist when ‘The Rock’ is no longer blacklisted by Spanish authorities.
No more blocked income tax exemptions
For many years, Spanish tax authorities used Gibraltar’s blacklist status to deny frontier workers a considerable tax break.
Specifically, Spanish residents working in Gibraltar were blocked from accessing Spanish Income Tax exemption Article 7p.
The aforementioned allows qualifying employees to exempt up to €60,100 of employment income physically carried out abroad).
Avoiding Spain’s ‘tax quarantine’ rules
To prevent potential tax evasion, Spain enforced strict rules that prevented Spanish and non-Spanish nationals from easily transferring their tax residency to Gibraltar.
Individuals making the move to the ‘tax haven’ were subject to prolonged taxation in Spain, often lasting up to four tax years following their relocation.
Removing corporate scrutiny and forced tax residency
Under strict anti-avoidance measures, a company set up and managed in Gibraltar could still be deemed to have Spanish tax residency if its assets, revenue, management, or ultimate beneficial owners were tied to Spain.
This has forced many companies to carefully restructure their operations to avoid heavy tax penalties in Spain.
Another positive step for Spain-Gibraltar diplomatic relations?
Gibraltar’s ‘tax haven’ classification was a critical point in political and diplomatic tensions between Madrid, London, and Gibraltar.
Gibraltar’s government has long argued the label was outdated and unfair, even pausing broader post-Brexit treaty negotiations to demand Spain remove the Rock from its list of non-cooperative jurisdictions.
Gibraltar’s removal from the ‘tax haven’ list paves the way for the smoother implementation of The Rock’s upcoming post-Brexit status.
Spain, the UK and the EU finalised a landmark draft treaty in February 2026 to resolve Gibraltar’s unusual situation ten years after the UK voted to leave the EU.
The agreement avoids a hard border by effectively bringing Gibraltar into the EU’s Schengen area, establishing an EU-Gibraltar customs union, and removing physical border checks with Spain.
Its implementation has been delayed and will supposedly come into force this summer.
READ ALSO: Gibraltar deal gives Spain right to veto residency permits on British territory
