Business Guide
Gibraltar's New Customs Union with the EU
What every business needs to know about the EU customs union, product standards, and transaction tax.
The Headline
From the treaty's provisional application (target: 10 April 2026), Gibraltar enters a customs union with the EU. This means:
- Zero customs duties on goods moving between Gibraltar and the EU
- No quantitative restrictions - no import/export limits
- EU customs procedures apply to goods entering Gibraltar from outside the EU
- All goods sold in Gibraltar must meet EU product standards
- Gibraltar operates its own transaction tax instead of VAT
How Goods Enter Gibraltar
Under the treaty, goods imported into Gibraltar must come by land through designated EU customs posts. The confirmed posts are:
La Linea de la Concepcion
The land border
Algeciras
The port
Sagunto
Valencia region
Portugal
Additional post to be designated
Customs clearance formalities happen at these posts. Once goods clear customs, they move freely into Gibraltar by land with no further checks at the border.
EU Product Standards Are Now Mandatory
This is where businesses need to pay attention. Article 256 requires that all goods placed on the market in Gibraltar comply with EU product rules - CE marking, safety standards, food safety regulations, and everything else that applies across the EU single market.
Key exceptions
- Food produced in Gibraltar for local consumption (must be labelled "Not for EU")
- Goods made exclusively for export outside Gibraltar/EU
- UK-authorised medicines (must be labelled "UK only" and cannot enter the EU market)
If you currently import goods from the UK that don't carry EU certification, you'll need to switch to EU-compliant supply chains or ensure your UK suppliers meet EU standards.
Transaction Tax, Not VAT
Gibraltar will NOT adopt VAT. Instead, goods produced in or imported into Gibraltar will be subject to a transaction tax (Article 248). Goods subject to EU excise duties (alcohol, fuel, tobacco) will also face Gibraltar excise duties.
A joint independent consultative body will monitor whether Gibraltar's tax rates cause trade distortions compared to Spain. If they do, Gibraltar must adjust.
The safeguard mechanism
If Gibraltar doesn't comply and distortions persist for 30+ days, the EU can directly levy Spanish VAT and excise rates on goods entering Gibraltar. This is a powerful enforcement tool.
What Businesses Should Do Now
Audit your supply chain
Identify any goods that don't meet EU standards.
Check your suppliers
EU-sourced goods are automatically presumed compliant; UK-sourced goods may need verification.
Understand the new customs procedures
Familiarise yourself with EU customs clearance.
Prepare for the transaction tax
Understand how it applies to your goods.
Review your product labelling
"Not for EU" labels required for local food products; "UK only" for UK medicines.
Talk to your accountant
The tax landscape is changing significantly.
Free Tools
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Transitional Arrangements
The treaty includes grace periods (Articles 269-270):
Goods already in transit before the treaty takes effect are exempt.
Goods already on the market in Gibraltar have 3 months before they must comply with EU product standards.
Existing customs certificates get a grace period of their remaining duration or 3 months, whichever is shorter.
Goods in temporary storage or special customs procedures can be wound down under current rules.
Full Treaty
Want the full picture?
This guide covers the customs union. For everything else - border changes, frontier workers, the airport, sovereignty protections, and more - read the complete treaty breakdown.
Read the full treaty explained →Based on the UK-EU Draft Agreement in respect of Gibraltar (Part Three, Title II), published 26 February 2026. This does not constitute legal, tax, or business advice.