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Working in Gibraltar but living in Spain

By Pauline Bowden - Topics: Gibraltar, Income Tax, Residency, Social Charges, spain, tax advice, tax tips, Uncategorised
This article is published on: 3rd June 2016

Thousands of people cross the border from Spain to Gibraltar every day to go to work. Many of these people feel that they are in a kind of “Limboland” because they are not fully part of either state’s systems. Even though they pay tax and social security to the Gibraltar government, they are not entitled to free education for their children, nor automatic free health care. If they do not pay tax and social security in Spain, they are not always entitled to the facilities in that country either.

Contrary to popular belief, the two countries do co-operate in many areas. Social security and health care are areas of great co-operation between the two. They also have a reciprocal arrangement for income tax.

Each individual working and paying social security in Gibraltar can elect for those payments to be transferred to their local social security office in Spain. It is a fairly easy procedure, in that you go to the social security office in Gibraltar and ask to fill in the form to transfer your social security payment to the seguridad social of your area of residence. The Spanish office then send confirmation of receipt of payments and issue you with a Spanish social security card.
You are then entitled to Spanish state health care, unemployment benefit, sick pay etc, and once enough contributions have been made, the Spanish state pension.

Many people worry that if they do this, then they would not be entitled to any health care in Gibraltar should they have an accident or fall ill while at work or visiting Gibraltar. Gibraltar is part of the European Union’s health care system and once you have your Spanish social security card, you can go to your local officina de seguridad social and ask for a “Tarjeta Sanitaria Europea” which is produced on the spot once a check is made to ensure that your social security payments are up to date in Spain. This card is valid in all EU countries and Switzerland (including Gibraltar).

To be fully legal, if you live in Spain for more than 183 days in any one year, you should also make a tax return in Spain. Unless you are a high rate tax payer in Gibraltar then you should have no more tax to pay. All it will cost you is the Gestor’s fee for submitting your annual tax return.

Article by Pauline Bowden

Pauline BowdenIf you are based in the Costa del Sol area you can contact Pauline at: pauline.bowden@spectrum-ifa.com for more information. If you are based in another area within Europe, please complete the form below and we will put a local adviser in touch with you.

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