Transaction tax ‘acceptable’ to EU is part of deal to join border-free Schengen zone and link with customs union
Gibraltar will apply a 15% sales tax on goods to avoid unfair competition with Spain, as a result of the agreement on the post-Brexit future of the British overseas territory, it has emerged.
The territory has agreed to ensure a 15% minimum “transaction tax” on goods within three years of the ratification of the agreement, according to a senior European official.
“For Gibraltar, it was a big ask, they have always claimed … that this taxation will create for them a serious economic problem,” the official said. The European Commission insisted that the British territory had to align its taxation policies with the EU in order to join a customs union, an integral part of the deal struck on Wednesday.
“The agreement that we have reached is that they will, in a period of three years, reach a level [on a transaction tax] that is acceptable for us,” the person said.
