Spain has taken a significant step towards removing Gibraltar from its list of non-cooperative tax jurisdictions, historically referred to as the Spanish “tax haven” list.
The Spanish Ministry of Finance has published a draft ministerial order proposing Gibraltar’s removal from the list established by Order HFP/115/2023. The draft also removes several other jurisdictions while adding Russia in relation to a specific harmful tax regime.
If finally approved and published in the BOE, this would mark the end of more than 35 years of Gibraltar appearing on Spain’s tax haven blacklist.
Why is this important?
For many years, Gibraltar’s inclusion on the Spanish list created additional tax complications, scrutiny, and limitations for individuals and companies with links to the territory.
Although Gibraltar has already signed tax cooperation and information exchange agreements with Spain and the UK, its continued presence on the Spanish list still had practical consequences under several Spanish tax rules.
Removing Gibraltar from the list does not mean that Spain and Gibraltar suddenly become a “free tax zone” between each other, nor does it eliminate all anti-avoidance measures or reporting obligations. However, it will significantly reduce some of the automatic restrictions associated with jurisdictions officially classified as non-cooperative.
The possible impact on the 60.100 € exemption
One of the most interesting consequences could relate to the Spanish exemption under article 7.p of the Spanish Income Tax law.
This exemption allows qualifying employees to exempt up to 60.100 € of employment income relating to work physically carried out abroad.
Until now, Gibraltar’s status as a non-cooperative jurisdiction created the major obstacle for applying this exemption. In practice, the Spanish tax authorities have historically denied the application of the 7.p exemption to work performed in Gibraltar partly because of its inclusion on the Spanish blacklist.
Once Gibraltar is formally removed from the list, this argument would largely disappear.
This could potentially open the door for employees working in Gibraltar to apply the exemption more easily than before, particularly frontier workers and employees physically carrying out duties there.
Naturally, the normal legal requirements of article 7.p would still need to be satisfied in each case.
Is the change already in force?
Not yet.
At this stage, the measure is still part of a draft ministerial order undergoing the public consultation process.
According to the wording of the draft order, the change would apply to taxes and tax periods beginning after its entry into force. If approved in its current form, the order would enter into force on 1 June 2026.
In practice, this may mean that the effects for Spanish personal income tax purposes would mainly be seen from the 2027 tax year onwards rather than retrospectively for previous years.
