Gibraltar agrees 15% sales tax on goods in post-Brexit settlement with Spain

The deal will ease travel between Gibraltar and Spain while allaying European fears of cross-border smuggling. Photograph: Carlos Gil/Getty Images

Gibraltar will apply a 15% sales tax on goods to avoid unfair competition with Spain, as a result of the agreement on the post-Brexit future of the British overseas territory, it has emerged.

The territory has agreed to ensure a 15% minimum “transaction tax” on goods within three years of the ratification of the agreement, according to a senior European official.