Since 15 July 2026, Gibraltar and the EU have formed a customs union for goods. Most imports are now cleared at designated EU customs offices in Spain, then travel into Gibraltar under a transit procedure. HM Customs Gibraltar collects transaction tax (15% standard rate in the first year) and any excise on arrival. Goods sold in Gibraltar must meet EU product standards.
At a glance
| Topic | Position as of October 2026 |
|---|---|
| Customs model | Bespoke Gibraltar–EU customs union; no duties or quotas on EU and Gibraltar goods |
| Where goods are cleared | Designated EU customs offices at Algeciras, La Línea and Sagunto, plus one in Portugal |
| Import duty | Replaced by transaction tax from 15 July 2026 |
| Transaction tax | 15% (year one), 16% (year two), at least 17% from year three; 5% and 0% rates for listed goods |
| Tobacco and alcohol | EU minimum excise rates; cigarette price gap with Spain capped |
| Fuel excise | None for the first three years |
| Product rules | EU standards apply, with some exceptions |
How does the Gibraltar–EU customs union work?
Gibraltar has not joined the EU’s customs territory. Instead the treaty creates a separate customs union between the two, so goods move between them without customs duties or quotas. Goods from outside the EU pay the EU’s common external tariff when they are cleared, and the duty collected is returned to Gibraltar.
The practical effect is that the customs border has moved. Clearance for most imports and exports now happens at designated customs offices in the EU: Algeciras, La Línea and Sagunto in Spain, and one office in Portugal. The Portuguese office acts as a back-up for when the Spanish points cannot operate; as of October 2026 neither Gibraltar’s nor Spain’s published guidance names its location, so your customs agent will confirm the routing for any shipment.
How an import reaches Gibraltar
- EU goods travel under standard T2 transit to a designated customs office (T1 for non-EU goods).
- The goods are cleared there, and any sanitary or phytosanitary checks for non-EU goods happen at the first EU point of entry.
- A new transit document (T2GI or T1GI, through the EU’s NCTS system) carries the goods into Gibraltar.
- HM Customs closes the transit on arrival and collects transaction tax and excise where due.
Exports run the same way in reverse. Ship and aircraft supplies, including bunkering fuel, can leave by sea or air without going via a designated office, and non-EU goods can still be shipped directly from Gibraltar’s port to non-EU destinations.
Can goods still be imported by sea?
Mostly not, for goods destined for the Gibraltar market. EU goods may arrive by sea only if they have first been cleared at the Algeciras customs office. Goods under special procedures such as inward processing or temporary admission, and bunkering fuel, may also arrive by sea. Otherwise goods enter by land through the former frontier. Royal Mail has warned that post now takes longer because it travels overland through Spain.
For yachts and marine supplies, see cruising EU waters on a Gibraltar-flagged yacht.
What is the transaction tax and who pays it?
Transaction tax replaced import duty at midnight on 15 July 2026. It applies to goods placed on the Gibraltar market and is charged on import, on manufacture in Gibraltar, or when goods are released from a bonded warehouse. It is not charged at the point of retail sale, and it does not apply to services, restaurant food and drink or property sales. Our guide to Gibraltar transaction tax covers rates, exemptions and online sales in more detail.
The taxable amount includes the value of the goods plus customs-related charges, transport and insurance. The rates set by the treaty are:
| Band | Rate | Examples |
|---|---|---|
| Standard | 15% in year one, 16% in year two, at least 17% from year three | Most goods, vehicles |
| Reduced | 5% | Certain agricultural goods and plants, children’s clothing and footwear, child car seats, bicycles, some art and antiques |
| Super-reduced | 0% | Most food (not alcohol), water, pharmaceuticals, medical equipment, books and periodicals, certain solar panels |
Locally generated electricity, and the LNG used to produce it, are exempt. An independent body set up by Gibraltar and Spain monitors prices and can recommend changes to rates to avoid distortions. Its recommendations are binding, and if Gibraltar does not follow them Spain may levy its own VAT and duties on goods heading to Gibraltar.
Businesses buying commercial quantities from EU suppliers should buy VAT-free and pay transaction tax on import. Individuals who shop in Spain pay Spanish VAT, which they cannot reclaim, but no transaction tax on those goods within their allowances.
How are tobacco, alcohol and fuel taxed now?
Excise on tobacco and alcohol starts at EU minimum rates. For cigarettes, the minimum is €115 per 1,000, and the retail price difference with mainland Spain may not exceed €0.80 or 15% per pack. This is designed to remove the incentive for cross-border tobacco smuggling.
There is no excise on fuel for the first three years. After that, Gibraltar’s rates are tied to Spanish rates, but official summaries describe the link differently. Gibraltar’s Technical Notice 72/2026 and RSM say fuel duty may then be no more than 6% below Spain’s rates, while Spain’s tax agency (AEAT) says hydrocarbon rates must reach Spain’s three years after entry into force. The gap matters for fuel retailers’ pricing from 2029, so check the treaty text or ask an adviser before planning on the 6% margin.
What do importers need to register for?
If your business makes customs declarations and pays transaction tax from its own account, you need a Spanish tax identification number (NIF) and an EU EORI number, obtained together from the Spanish Tax Agency (AEAT) online or in person. HM Customs guidance published on 26 May 2026 states that a NIF held for customs purposes does not, by itself, make your business taxable or established in Spain.
If a customs agent handles the formalities and pays on your account, you do not need either number. Gibraltar’s Government has said it will set up a company to act as a global guarantor for Gibraltar traders, so that customs guarantees do not block access to transit procedures. As of October 2026, no details of how the company operates or how traders can use it had been published, so ask your customs agent or HM Customs Gibraltar about current guarantee arrangements before relying on it.
Check whether your activity also needs a licence under the Gibraltar business licences regime.
Which product standards apply to goods sold in Gibraltar?
From 15 July 2026, goods produced in or placed on the Gibraltar market must comply with EU product rules. Goods lawfully on the EU market are presumed to comply when imported. Exceptions cover some foods, human medicines and certain medical devices used by the Gibraltar Health Authority. The Gibraltar Office of Fair Trading enforces the rules.
Goods from the UK need care. UK goods that meet the origin rules of the UK–EU Trade and Cooperation Agreement can enter duty-free, but those that do not face the EU’s common external tariff in addition to transaction tax. UK goods must also meet EU standards to be sold in Gibraltar.
What transitional periods applied?
Gibraltar’s Technical Notice 63/2026 set grace periods running from the start of the new regime. Goods in transit when the regime began were exempt from transaction tax, excise and EU standards for two months. Goods already on the Gibraltar market could be sold without meeting EU standards for three months. Bonded goods kept existing treatment only if discharged within two months.
The notice was written for an expected start date of 10 April 2026. Because the regime began on 15 July instead, these periods would have ended around mid-September and mid-October 2026, assuming they run from 15 July as the notice ties them to the start of the regime. Gibraltar’s Government has not published revised end dates, so if you still hold stock or bonded goods from before 15 July, check their status with HM Customs Gibraltar.
How has the border worked for freight since July?
The first fortnight was difficult. Before the treaty, around 230 to 250 lorries a day crossed the commercial gate, but in the first week only about 180 a day were cleared. Mismatched customs IT systems, unclear exemptions for UK medicines and double queuing in La Línea caused delays. Spain’s tax agency issued contingency procedures, and by late July flows were reported to be improving.
Support for affected retailers includes a transitional deduction for transaction tax paid in the first 90 days, which ended on 12 October 2026. For the wider business picture, see the UK–EU treaty explained for business or return to the Treaty 2026 hub.
What allowances apply to travellers?
For the first three years, people bringing goods into Gibraltar can import up to €300 of goods per person by land and €430 by sea or air, with quantity limits for cigarettes, alcohol and fuel. After three years these allowances are due to end, and travellers may bring in any amount for personal use, provided they can show it is for personal use if asked. Duty-free sales at the airport for non-EU destinations continue.