The treaty will stipulate that an individual will be treated as a tax resident of Spain if they:
- spend more than 183 nights per year in Spain, or
- have a spouse residing habitually in Spain, or
- have a permanent home in Spain, or
- have two-thirds of their net assets in Spain.
The agreement also seeks to remove any relevant double taxation issues and offer compliance with individual domestic laws of the country in which an individual resides.
Competitive wealth management options in Gibraltar and Spain
Spain has long bemoaned the benefits gained by Gibraltar’s low tax rates for individuals and businesses – for example, there is a 10% tax on corporate profits in Gibraltar, whereas the rate is 25% in Spain. The GB Island territory is currently host to an estimated 55,000 companies which far outstrips the population of around 30,000.
And Spain is seeking to ensure that when an individual or business has the majority of their assets and business activity in Spain, they pay their tax in Spain.
However, if a Gibraltar-registered business can prove that at least 75% of their revenue is generated in Gibraltar and they were registered there before 16 November 2018, then they will be able to remain as tax resident in Gibraltar.
The Chief Minister of Her Majesty’s Government of Gibraltar, the Hon Fabian Picardo QC MP, said, “This is an important moment for Gibraltar and for our relations with our neighbour.”
In a letter to David Liddington MP (Theresa May’s de facto deputy) Mr Picardo acknowledged that the treaty was massively significant.
Blacktower wealth management advice in Gibraltar and Spain
Whether you are an expat in Gibraltar or Spain, Blacktower FM can help you make the most of your investments, pensions and savings wherever you reside.
Contact your local office for wealth management advice in Gibraltar or any one of our four regional Spanish offices in Barcelona, Costa Blanca, Costa Cálida and Costa del Sol today.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Expats living in Gilbraltar who currently enjoying the benefits of a QROPS will be pleased to hear that the Chief Minister of Gibraltar, Fabian Picardo, has said that the impending Brexit negotiations are an opportunity for the Rock to seize the moment and to ensure that the future is something it can “write for itself”.
Managing your finances is not an easy task, and many people worry whether they’ll have enough money to last them through retirement. Most people are likely to need a helping hand from a financial adviser, and a new move from the government will help make receiving this advice easier than ever before.