Telephone: (+350) 200 42686
International wealth protection – Innovative and impartial tax planning and asset structuring for private clients, their businesses and their families.
Telephone: (+350) 200 42686
With its recently introduced 10% tax rate for companies, its local source basis of taxation and special tax regimes available for High Net Worth Individuals and working expatriates, Gibraltar can provide some interesting opportunities. For further information on Gibraltar's tax system, please contact our tax team by email us or telephone us on Gibraltar (+350) 200 42686 and ask for Jo Jones.
There are two main taxes levied in Gibraltar:
The tax year runs from 1 July to 30 June.
Income tax is charged on the taxable income of every individual at progressive rates.
Individuals can choose whether to be taxed under Allowances Based System (ABS) or the Gross Income Based system (GIB).
ABS tax rates range from 17% to 40%.
GIB tax rates range from 10% to 29%. Under the GIB system no tax allowances or reliefs are available.
Category 2 - High Net Worth Individuals (HNWI)
Individuals who obtain a Category 2 Individual Certificate are considered fully tax-resident in Gibraltar but subject to a special tax regime
This regime generally caps an individual's assessable taxable income in Gibraltar.
Read more about tax for HNWIs on our Gibraltar Category 2 Status page.
High Executive Possessing Specialist Skills (HEPSS)
This new tax regime for executives and senior management possessing specialist skills came into being on 1 July 2007.
The Gibraltar government has established the regime for those who, in its opinion, promote and sustain Gibraltar's economy.
Company Income Tax (20010/11)
A company is liable to the following taxes:
Currently, income tax for companies is generally only charged on income which is accrued in, derived from, or received in Gibraltar (referred to as the "local source" basis).
There is an opportunity for businesses which commenced after 1 July 2007 to benefit from the 10% rate from 1 July 2009, subject to conditions.
Tax exempt company status is no longer granted and all existing tax-exempt companies cease on 31 December 2010 at latest).
There are no taxes relating to:
Gibraltar has no exchange control legislation.
There are no withholding taxes on:
Withholding tax on interest payments paid by companies does exist but can be reduced to 0% in certain circumstances.
Gibraltar levies the following duties:
European Court of Justice (ECJ) Case on Gibraltar's company tax regime
On 18 December 2008 the ECJ finally gave its judgment concerning Gibraltar and its proposed new company tax regime.
The ECJ annulled in its entirety the EC's claim that the proposed reform of company income tax in Gibraltar constituted unlawful state aid.
The ECJ considered Gibraltar to be institutionally, procedurally, economically and financially autonomous.
As a result of the ECJ's judgement, Gibraltar can set its own tax rates independently of the UK.
Although the judgement is under appeal, the Gibraltar Government is confident that the decision will not be changed and has already implemented a new corporate low tax regime.
Corporate Low Tax Regime
There is a 10% corporation tax rate for new companies from 1 July 2009.
Businesses which commenced operations after 1 July 2007 also have an opportunity to benefit from the 10% tax rate from 1 July 2009, subject to conditions.
There will be a 10% corporation tax rate for existing companies (including current tax exempt companies whose tax exempt status will cease on 31 December 2010) from 1 January 2011.
The "territorial basis" will continue to apply, with companies being taxed on the basis of income "accruing in, derived from or received in" Gibraltar, which could result in a reduced Gibraltar tax liability.
The preceding year basis of tax assessment will be abolished in favour of an actual basis.
New Legislation and Climate of Compliance
The Government published a pre-legislative briefing paper in June 2010 explaining the main changes to the Gibraltar tax system, together with the text of the proposed amended and consolidated Income Tax Act.
This new Act keeps the old legislation and the majority of its taxation principles, e.g. the territorial basis, but overhauls it by a series of far reaching amendments to make it fit for the modern age.
The proposed legislation, which is anticipated to come into force on 1 January 2011, contains various provisions, including:
For further information on Gibraltar's tax system, please contact our tax team by email us or telephone us on Gibraltar (+350) 200 42686 and ask for Jo Jones.