Unilateral and Joint Declarations in relation to the UK–EU Agreement in respect of Gibraltar

The European Union 1 and the United Kingdom, in respect of Gibraltar (the ‘Participants’) endorse the following Joint Political Declaration on Countering Harmful Tax Regimes. The Participants, reflecting the global principles of fair tax competition, affirm their commitment to countering harmful tax regimes, in particular those that may facilitate base erosion and profit shifting in line with Action 5 of the OECD Base Erosion and Profit Shifting (BEPS) Action Plan. In this context, the Participants affirm their commitment to applying the principles on countering harmful tax regimes in accordance with this Joint Political Declaration. Harmful tax regimes cover business taxation regimes that affect or may affect in a significant way the location of business activity, including the location of groups of companies, within the Participants. Tax regimes include both laws or regulations and administrative practices. If a tax regime meets the gateway criterion of imposing a significantly lower effective level of taxation than those levels which generally apply in the Participants, including zero taxation, it should be considered potentially harmful. Such a level of taxation may operate by virtue of the nominal tax rate, the tax base or any other relevant factor. In this context, and considering the approach set out at the global level, when assessing whether a business taxation regime is harmful, account should be taken of whether one or more of the following key factors apply:

(a) whether advantages are ring-fenced from the domestic economy so that they do not affect the national tax base or are accorded only to non-residents;

(b) whether the regime granting the advantages fails to require any substantial economic activity and substantial economic presence within the Participant offering such tax advantages;

1 For the purposes of the commitments in this Declaration, with respect to the European Union, references to Participants are understood as being to the European Union, its Member States, or the European Union and its Member States, as the case may be.

(c) whether the rules for profit determination in respect of activities within a multinational group of companies departs from internationally accepted principles, in particular the rules agreed upon within the OECD;

(d) whether the tax regime lacks transparency, including where legal provisions are relaxed at administrative level in a non-transparent way or where there is no effective exchange of information with respect to the regime. The Participants may hold an annual dialogue to discuss issues in relation to the application of these principles

Desiring to ensure a common interpretation, the Union and the United Kingdom, in respect of Gibraltar, agree that, for the purposes of this Agreement, the category of persons carrying out a paid activity covers persons entering for the purpose of carrying out a gainful occupation or remunerated activity in the territory of the other Contracting Party as an employee or as a service provider.

This category should not cover:

(a) businesspersons, i.e. persons travelling for the purpose of business deliberation (without being employed in the Union or the United Kingdom, in respect of Gibraltar);

(b) sportspersons or artists performing an activity on an ad-hoc basis;

(c) journalists sent by the media of their country of residence; and

(d) intra-corporate trainees.

The implementation of this Declaration shall be monitored by the Specialised Committee on the Circulation of Persons, which may propose modifications when, on the basis of the experiences of the Parties, it considers it necessary.

The United Kingdom notes that, at the time of signature of the Agreement between the European Union and the United Kingdom, in respect of Gibraltar, Dated 14 July 2026 it was the joint intention of the Parties to this Agreement that the reference framework for assessing the selectivity of a taxation measure for the purposes of state aid, as it applies in accordance with this Agreement, corresponds exclusively to the geographical limits of the territory of Gibraltar.

This understanding does not affect the territorial scope of the Agreement as set out in Article 328.

The Contracting Parties take note of the close relationship between the European Union and Norway, Iceland, Switzerland and Liechtenstein, particularly by virtue of the Agreements of 18 May 1999 and 26 October 2004 concerning the association of those countries with the implementation, application and development of the Schengen acquis.

In such circumstances it is appropriate that the authorities of Norway, Iceland, Switzerland and Liechtenstein, on the one hand, and the United Kingdom, on the other hand, conclude, without delay, bilateral agreements on matters relating to the circulation of persons covered by Part Two of the Agreement which affect the functioning of the area without controls at internal borders.”