Santiago Lapausa, head of tax, economist and partner at Marbella-based law firm JC&A Abogados, has warned that, despite Gibraltar’s fraught relationship with Spain, information sharing can access data back to 2014.
This is notwithstanding the fact the two governments have neither a bilateral tax information exchange agreement nor a double tax treaty between them.
According to Lapausa, many employees of Gibraltar firms, who live in Spain, have received letters from the taxman querying tax returns going back to 2014.
“The Spanish tax authorities are sending notifications to frontier workers requesting them to file and pay income tax as residents in Spain for year 2014, based on information provided by the Government of Gibraltar about income earned there in said year,” said Lapausa in a blog posting.
“The Spanish tax authorities have strengthened their research for residents who failed to declare income earned in Gibraltar or claimed pretended residency in Gibraltar, implementing a number of new measures and adopting new IT tools over the last years.”
Lapausa observes that it is in fact domestic legislation and EU exchange rules that are providing the real ammunition.
“The letters sent to frontier workers could be the result of this research, but they literally say ‘according to the information provided by the tax authorities in Gibraltar…’ when there is no exchange agreement prior to 2016,” he said.
“The reason behind this is that Gibraltar has committed to exchange certain information in compliance with EU Directive 2011/16 and is indeed exchanging automatically information to Spain on workers who have given an address in Spain, based on Gibraltar Taxation (Mutual Administrative Assistance) Act 2014-06.”
Whatever the precise source, the move from Spain will add pressure ahead of any deal on Gibraltar resulting from Brexit.