Spain signed Monday a fiscal treaty with Britain on Gibraltar as Brexit nears, to fight tax fraud and money laundering via the British overseas territory.
Signed by Foreign Minister Josep Borrell, the text was to be countersigned later in the day by David Lidington, Prime Minister Theresa May's effective deputy, according to a Spanish foreign ministry statement.
It must then be approved by the Spanish cabinet and ratified by the parliaments of both countries.
The treaty was part of a deal sealed in November between London and the European Union (EU) on Brexit, as were four other bilateral deals on Gibraltar.
For Madrid, it is "essential" that Gibraltar's departure from the EU, planned for March 29, takes place "in an orderly way and in keeping with Spanish interests in terms of fighting fraud and tax evasion."
According to the foreign ministry, the text stipulates that individuals and other entities in Gibraltar must register their tax residency in Spain if that's where they earn most of their revenue, own most of their assets or if a majority of their owners or managers live there.
Spain welcomed the treaty, saying it set "clear rules to more easily resolve conflicts of tax residence" and allowed for "the reduction and elimination of tax fraud and (other) effects that harm the Spanish Treasury, deriving from the nature of Gibraltar's tax regime."
Spain has long criticised Gibraltar's low-tax regime, while the tiny territory argues it is a crucial part of its thriving, services-based economy.
Thousands of residents from neighbouring southern Spain, an area with high unemployment, travel to the rocky outcrop every day for work.
Borrell welcomed "the first international agreement signed by Spain and the United Kingdom over Gibraltar since the Treaty of Utrecht," which dates back to 1713 and saw Spain cede the "Rock" to Britain.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)