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Agreement Details

Learn all the details of the Agreement

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Safeguards

  • The agreement provides for a mechanism that allows the EU to react if Gibraltar applies a tax system that creates significant distortions compared to Spain.

    This mechanism can be activated if:

    • There are significant distortions

    • They are caused by differences in tax rates between Gibraltar and Spain

    • They persist for at least 30 days

    • There is objective and verifiable evidence

    • Gibraltar does not apply the rate increase indicated by the observatory

    The procedure would be, in summary:

    • Formal notification to the United Kingdom and immediate consultations

    • A period of 10 working days to attempt a negotiated solution

    • If there is no agreement, Spain may begin to settle VAT and excise duties on goods affected by the special transit shipment (T1GI or T2GI). This measure may be extended for a maximum of 30 days, renewable for another 30 days.

    • Possibility of arbitration

  • In the event that they occur other breaches (lack of cooperation, non-implementation of agreement, poor administration…), other measures may be adopted:

    • Suspension of the application of the agreement, after prior notification to the Committee

    • Increase in the collection premium or retention of the amounts collected

    • Spanish VAT and Excise Tax Settlement