Gibraltar's decision to introduce a 15% sales tax stems from a post-Brexit agreement to ensure fair competition with Spain and comply with EU standards. The new tax policy, mandated to be implemented within three years, aims to allow Gibraltar to join a customs union with the EU. While this historic agreement will connect Gibraltar to the Schengen zone, facilitating easier movement, it also restricts Gibraltarians' ability to work and settle in the EU. Spain's foreign minister welcomed the alignment of tax policies as a positive step toward equitable treatment.
Gibraltar will implement a 15% sales tax to align with EU standards, ensuring fair competition with Spain as part of a post-Brexit agreement.
The agreement aims to establish a minimum transaction tax on goods while facilitating Gibraltar's connection to the EU's border-free Schengen zone.
Under the conditions set by the EU, Gibraltar must modify its taxation policies to qualify for customs union participation, a significant change for the territory.
The historic agreement allows for free movement within the Schengen zone for Gibraltarians, although they will not have the right to work in the EU.
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