The Gibraltar government has communicated to its business community that changes to laws agreed under its ‘Tax Treaty’ mandate with Spain should not impact employee rights.
Last March, Gibraltar and Spain’s tax authority agreed to terms established under a ‘Tax Treaty’ related to the tax status of individuals working in Gibraltar and residing in Spain.
From the start 2020, in accordance with Spanish laws, Individuals who spend more than 183 days out of the year in Spain, whose partner is a Spanish resident, who own a regular home in Spain or who keep two-thirds of their assets on Spanish territory, will have to pay taxes in Spain.
On 1 November, Gibraltar government issued a statement to business stakeholders underlining that Tax Treaty terms, had not changed the British Overseas Territory’s existing frameworks on tax status.
Gibraltar news sources stated that the government had been forced to issue its statement, following reports that a betting company (reported to be William Hill) had banned its employees from working from home.
In its communication, the Gibraltar government underlined that for individuals Tax Treaty terms simply ‘set out the reality of Spanish tax law as it existed before the treaty’.
Gibraltar government reminds businesses that relevant Spanish tax legislation has always had the potential to impact entities operating in the British Overseas Territory
“This latest development is merely an example of commercial entities reminding employees to act in keeping with long-established principles of management and control if they are resident outside of Gibraltar, and has nothing to do with anything new in the tax treaty.” The Gibraltar government details in its statement
“The clarity the treaty provides allows companies to remind their employees, in a measured manner, to regularise their own positions as we move forward in a new environment of cross-border tax certainty, but where the rules as to management and control remain unchanged.”