ent begging ratification. The deal was concocted by Britain and Spain a year ago but a series of delays ensued, and as the final stages now arrive, the ultra-right wing party Vox - Spain’s third largest political force - is ready to seek derailing the process as ratification begins its process through the Spanish parliament tomorrow.

With Brexit looming, the UK and the EU, including Spain, have negotiated a protocol on Gibraltar annexed to the Withdrawal Agreement, with four memoranda of understanding already signed on citizens’ rights, tobacco, environment and police/customs cooperation - plus the Tax Treaty on Gibraltar negotiated bilaterally by the UK and Spain.

FISCAL RESIDENCY

It determines what constitutes fiscal residency by Gibraltarians, Spaniards and other nationals on both sides of the frontier. It will be determined where nationals of different countries reside for tax purposes - and a series of rules will test where exactly different individuals and entities reside.

Under the new rules, an individual will be considered tax resident only in Spain if four criteria are met:

1) The person’s only permanent home is located in Spain.

2) The person spends over 183 overnight stays in Spain.

3) His or her centre of vital interests is located in Spain.

4) The persons centre of economic interests is in Spain.

If none of these conditions conclusively apply, then the individual is considered tax resident in Spain unless they spend over 183 days in Gibraltar and have a permanent home there. If these latter considerations are met, the individual is tax resident in Gibraltar.

Similar rules apply as regards entities, such as companies. They have to meet five criteria and provide reliable evidence regarding a genuine tax presence to be considered tax resident in Gibraltar.

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02-06-2020 PANORAMAdailyGIBRALTAR