Legislation on Money Laundering
The first guiding principle is the maintenance in Gibraltar of legislation equivalent to that of the European Union on money laundering matters once European legislation is no longer applicable there.
Tax Residence
Individuals
1. The consideration of tax residence will be according to the internal legislation of Spain and Gibraltar
2. In case of conflict, the agreement applies
3. If they are residents of both sites:
• It will be considered that they are tax residents of Spain:
A. If they make more than 183 overnight stays during the calendar year in Spain. When determining the count of overnight stays, sporadic absences from Spain and Gibraltar will be added to the period corresponding to the place where these people spend the majority of their overnight stays
B. In the event that, in accordance with Spanish tax legislation, the spouse (from whom they are not legally separated) or the individual with whom a similar relationship has been established, as well as the dependent ascendants or descendants, have their residence usual in Spain
C. If the only permanent home at your disposal is in Spain
D. If two thirds of the net assets that they directly or indirectly own, determined in accordance with Spanish tax legislation, are in Spain.
• In case of doubt in the application of A, B, C, D above natural persons will be considered exclusively tax residents of Spain, unless they can reliably demonstrate that they have a permanent home for their exclusive use in Gibraltar and that they remain in said territory more than 183 days
• The Joint Coordination Committee will resolve about residency determinations.
Companies and other legal entities
Companies or any other legal entities incorporated and managed in Gibraltar, or governed by its legislation, have tax residence exclusively in Spain in any of the following circumstances:
(i) that most of the assets, directly or indirectly owned, are in Spain or consist of rights that can or should be exercised in Spain
(ii) that most of the income accrued in a calendar year derives from sources in Spain, in accordance with article 13 of the revised text of the Spanish Law
(iii) that the majority of the individuals in charge of the effective management are tax residents of Spain
(iv) that most of the rights to capital or equity, voting rights or participation in profits are under the direct or indirect control, either by individuals who are tax residents of Spain or by legal persons, entities or other instruments or legal forms linked to tax residents of Spain
(iii) and (iv) does not apply if it was incorporated before November 16, 2018 and which by December 31, 2018 when the conditions contained in subsections (iii) or (iv) have been met, demonstrate what is indicated below :
(i) that it has a fixed place of business through which the activity is carried out totally or partially in Gibraltar, with a sufficient number of workers, with the necessary qualifications and an adequate total of operating expenses in relation to the main activities of income generation
(ii) that it is effectively subject to corporation tax and pays such tax on its profits in Gibraltar, at the rate in force in accordance with the tax legislation of said territory (currently 10% or 20%)
(iii) that during the period between the date of its incorporation and December 31, 2018, it has carried out its activity in or from Gibraltar, and has done so without interruption or change of sector since January 1, 2011
(iv) more than 75% of your income with respect to the financial year immediately prior to December 31, 2018 accrues and derives from sources in Gibraltar, in accordance with its tax legislation, with its subsequent modifications;
(v) that less than the percentage of income indicated below, with respect to the financial year immediately prior to December 31, 2018, comes from sources in Spain, in accordance with article 13 of the consolidated text of the Tax Law Income of non-residents in Spanish tax legislation, with its subsequent modifications:
A. 5% for any company or entity whose annual turnover exceeds 6 million euros
B. 10% for any company annual turnover exceeds 3 million euros, but does not exceed 6 million euros
C. 15% for any company whose annual turnover does not exceed 3 million euros.
To determine the annual business volume of subsection (v) above it will be considered that said volume includes that of the company or entity together with that of any Related party incorporated in Gibraltar, when the latter is defined in accordance with International Accounting Standard (IAS) No. 24 regarding information on related parties.
For these calculations, the Gibraltar tax authorities acting as cooperation bodies for this Agreement will provide the Spanish tax authorities with the necessary list of companies or entities as of December 31, 2018.
This list will contain information on the legal ownership and beneficial owners, as well as on the individuals responsible for the effective management of such companies or entities and must be submitted by the Gibraltar tax authorities before March 31, 2020 .
Relocation To Gibraltar After The Entry Into Force Of The Agreement
Companies and entities whose residence is transferred to Gibraltar after the entry into force of this Agreement will, in all cases, maintain tax residence exclusively in Spain.
Elimination Of Double Taxation
The competent authorities will eliminate, where appropriate, double taxation in accordance with the provisions of their internal legislation.
Administrative Cooperation In Tax Matters
Definition of terms for these purposes
Person:
(i) A natural person
(ii) Any legal person, entity or other instrument or legal form, such as a capital company, a partnership, a trust or a foundation.
Workers:
(i) In the case of information to be exchanged by Gibraltar, employed workers or individuals who carry out business or professional activities in Gibraltar and reside in Spain in municipalities located within a radius of 80 km from Gibraltar.
(ii) In the case of information to be exchanged by Spain, employed persons residing in Gibraltar or individuals who carry out business or professional activities in Spain in municipalities located within a radius of 80 km from Gibraltar.
The Parties will reciprocally apply reinforced administrative cooperation with a view to exchanging information that is foreseeably relevant for the administration, execution and collection of taxes of all kinds and denominations, required on behalf of the Parties and their territorial or administrative subdivisions, including local councils.
Application of mechanisms similar to those of the EU for the collection of credits corresponding to certain taxes, duties and other measures. In addition, the mechanisms contemplated in the broadest terms of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters of the OECD and the Council of Europe, as well as any other norm that the OECD and the G-20 introduce in this matter in the future
The liaison bodies shall provide mutual administrative assistance in tax matters under this Agreement, whether the affected person is a resident of one of the Parties or not of any of them.
(a) the exchange of information, whether automatic, spontaneous or upon request, including simultaneous tax inspections or joint controls and participation in tax inspections abroad
(b) assistance in collection, including precautionary measures, in accordance with their respective domestic legislation
(c) the delivery or transfer of documents
Information on cross-border workers will also be transferred
The Gibraltar Authorities will inform Spain about:
(a) Annual information on workers registered in Gibraltar as residents in Spain, specifically detailing all the extremes of their underlying employment relationship or of any business or professional activity carried out by said workers, including details regarding the duration, economic terms and the employer
(b) Semiannual information on ships, aircraft and motor vehicles registered in Gibraltar in relation to tax residents in Spain.
(c) Free and direct access to the entries of the Gibraltar Mercantile Registry (Registrar of Companies in Gibraltar), in accordance with the Directive on the prevention of the use of the financial system for money laundering or terrorist financing, which modifies Directives 2009/138 / CE and 2013/36 / EU, as well as the Gibraltar Land Registry.
d) Direct access to information that is public on beneficial owners or, by request sent to the Gibraltar Commissioner of Income Tax, of companies, legal persons, partnerships and foundations.
(e) Direct access to information that is public or available to the Gibraltar Commissioner of Income Tax on settlors, trustees, beneficiaries and assets of all types of trusts, as well as other instruments or legal forms established or administered in Gibraltar, or governed by its legislation, when the settlors, trustees, protectors or beneficiaries, are tax residents in Spain or the assets of any type of trust are located in Spain.
Periods for information exchange
– Gibraltar workers residing in Spain.
From January 1, 2014 to March 4, 2021 and it will be done within the four months following the date of entry into force of this Agreement.
– Ships, aircraft and motor vehicles registered in Gibraltar in relation to tax residents in Spain
Semiannually, on March 31 and September 30. The information exchanged on March 31 will refer to the period between July 1 and December 31 of the previous calendar year, and the information exchanged on September 30 will refer to the period between January 1 and June 30 of the same calendar year. The first exchange will refer to everything registered from January 1, 2014 to March 4, 2021 and will be from March to August 2021.
Link Bodies
The Parties will designate their respective competent liaison bodies to directly carry out the cooperation actions provided for in this Agreement.
Each Party shall inform the other of the designated liaison bodies within one month of the entry into force of this Agreement.
Joint Coordination Committee
The Parties will create a Joint Coordination Committee composed of the Authorities designated by the Parties, which will supervise and coordinate the cooperation activities provided for in this Agreement.
In addition, said Joint Coordination Committee will endeavor to resolve by mutual agreement any difficulties or doubts that may arise in relation to the interpretation or execution of this Agreement, in particular with regard to the residence of natural or legal persons.
Maria Luisa Castro
