UK–EU Gibraltar Treaty: Key Business Changes Expected from 10 April 2026

Gibraltar’s business community has been briefed this week on the forthcoming UK–EU Gibraltar Treaty, which is expected to enter into force on 10 April 2026.

While the final treaty text has not yet been formally published, a political agreement was reached on 12 December 2025, and both the UK and EU now hold final “scrubbed” versions pending circulation and ratification.

The Government has indicated that the treaty is one it can safely recommend to Parliament, and businesses are being urged to prepare now given the short lead-in period.

Key Focus: Goods and Customs

The treaty introduces a bespoke customs union arrangement between Gibraltar and the EU. Gibraltar will not join the EU customs territory, but goods will operate within a single market framework designed to avoid checks at the land frontier.

Services, including financial services, remain outside the treaty’s scope.

New Customs Processing Model

Customs clearance for goods will take place at designated EU customs points, including:

• La Línea

• Algeciras

• Sagunto (Valencia)

• and an additional point in Portugal

Goods will then move into Gibraltar under a Gibraltar-specific transit procedure using electronic tracking systems.

Transaction Tax Replacing Import Duty

Gibraltar’s current import duty regime will be replaced by a transaction tax, payable when goods are imported for sale locally or released from bond.

Rates are expected to phase in:

• 15% (year one)

• 16% (year two)

• 17% (year three), aligned with the lowest EU VAT rate

Reduced rates of 5% and 0% will apply to essential goods such as food, medicines, books and medical equipment.

Excise duties will apply to alcohol and tobacco in line with EU minimums, while fuel excise will be phased in after a three-year transition.

Importantly, tax revenues will remain in Gibraltar.

Transitional Arrangements

Time-limited exemptions are expected for businesses holding existing stock, including:

• Two-month relief for goods already in transit before 10 April

• Three-month grace period for goods already on the Gibraltar market

• Tightened discharge deadlines for bonded warehousing stock

EU Standards and Oversight

From entry into force, goods placed on the Gibraltar market will generally need to comply with EU standards, with enforcement through Gibraltar’s Office of Fair Trading.

More To Come

Further Government technical notices and sector-specific guidance are expected in the coming weeks.

Our firm will continue monitoring developments and advising clients on the legal and commercial implications for importers, retailers, landlords and developers.