A practical and easy-to-follow guide to
the Gibraltar tax system.
Gibraltar Tax Facts
2023/2024
2 PwC | Gibraltar Tax Facts 2023/2024
This booklet is also available online at www.pwc.gi
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back of this guide should you require more detailed
advice or assistance tailored to your specic needs.
This booklet is based on taxation law and practice in
Gibraltar as of 1 July 2023.
This content is for general information purposes
only, and should not be used as a substitute for
consultation with professional advisors.
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PwC | Gibraltar Tax Facts 2023/2024 3
Table of Contents
Budget Summary .................................................. 5
Personal tax ...................................................................5
Pillar Two .......................................................................5
Stamp Duty ....................................................................6
Statutory Minimum Wage ............................................... 6
Changes In Import Duty Rates ......................................7
Consultation Process ....................................................7
Tax Facts 2023/2024 ............................................8
Who is liable to taxation in Gibraltar? ............................8
Individuals ......................................................................8
Companies ..................................................................... 9
The standard rate of taxation .........................................9
Partnerships ................................................................... 9
Branches ...................................................................... 10
Trusts ...........................................................................10
Foundations .................................................................10
Taxable income ............................................................10
Dividends ..................................................................... 11
Interest ......................................................................... 11
Royalties ...................................................................... 11
Exempt income ............................................................12
Deductions allowed ...................................................... 14
Capital allowances .......................................................15
Losses ..........................................................................17
Group relief ..................................................................18
Withholding tax ............................................................18
Withholding tax on payments to subcontractors ..........18
Value added tax ...........................................................18
Customs and excise duties ..........................................18
Exchange of information ..............................................18
Deduction for improvement in EPC rating ....................20
Training costs ............................................................... 21
Employment Incentive ..................................................21
Marketing Incentive ...................................................... 21
Property Investment Incentives ....................................21
Allowance Based System ............................................24
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Gross Income Based System ......................................26
Benets in kind .............................................................27
Tax incentives ..............................................................28
Social insurance contributions .....................................29
Pension schemes .........................................................29
Anti-avoidance provisions ............................................30
Double taxation relief ...................................................32
Capital gains tax ..........................................................32
Wealth tax ....................................................................32
Estate duty ...................................................................32
Rates ............................................................................32
Stamp duty ................................................................... 33
Capital duty ..................................................................34
Gaming duty .................................................................34
Tax returns ...................................................................34
Payment of tax .............................................................35
Appeals ........................................................................35
Fines and penalties ...................................................... 35
Historical Tax Rates ..........................................37
Corporate .....................................................................37
Personal ....................................................................... 37
PwC | Gibraltar Tax Facts 2023/2024 5
Budget Summary
The Chief Minister delivered his budget Address on 11 July 2023.
The key points to note are as follows:
Personal tax
With effect from 1 July 2023:
• The tax rates on all bands under both the Allowance Based
System and Gross Income Based System will reduce by 1%
for individuals with gross assessable income not exceeding
£100,000 per annum.
• Tax rates will remain unchanged for individuals with gross
assessable income exceeding £100,000 per annum.
The following new tax credits will be introduced:
• 10% of the veried costs for individuals who are enrolled in a
gym or who contract a personal trainer who is registered with the
Income Tax Ofce;
• 10% of the cost of private school tuition in Gibraltar; and
• 75% of the LSRA fees for lawyers who are single practitioners.
It was also announced that the Commissioner of Income Tax will
undertake a review of the personal tax system in Gibraltar with a
view to simplifying the current rules where possible.
Pillar Two
Gibraltar has committed to implement the OECD Pillar Two rules
which provides a framework for a minimum 15% tax to be paid by
multinational groups in each jurisdiction in which they operate. The
rules will apply to multinationals which have at least 750 million
Euro of revenue in their consolidated nancial statements.
The Pillar Two rules will take effect in Gibraltar no earlier than
accounting periods beginning on or after 31 December 2024. The
Chief Minister has indicated that a distinct new regime will be
introduced for companies within the scope of Pillar Two including a
domestic minimum top-up tax. However, the implementation of Pillar
Two will be subject to a formal consultation process (see below).
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Stamp Duty
From 11 July 2023, the allowance for rst time buyers will increase
from £260,000 to £300,000.
It is also proposed that the stamp duty rate applicable to property
sales over £800,000 will increase from 3.5% to 4.5% with the
effective date to be conrmed at the time of publication.
The Commissioner of Stamp Duties and Financial Secretary will
undertake a consultation prior to 30 September 2023 on whether
to introduce stamp duty in relation to the assignment of purchase
contracts for “off plan” real property.
Statutory Minimum Wage / State Pension and
Disability Benet
The statutory hourly minimum wage increased from £8.10 to £8.60
(a 6.2% increase) from 1 August 2023. The State Pension and
Disability Benet will also increase by 7%.
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Changes in import duty rates
The following measures relating to import duty were announced:
• Existing measures reducing import duties to mitigate the effect of
higher fuel prices will remain in place until 31 December 2023.
• Duty rates for private vehicle importations and importation of
vehicles by dealers will be aligned.
• The vehicle duty cap relating to the importation of petrol or diesel
cars will be increased from £25,000 to £35,000.
• A new cap of £35,000 will be introduced on the importation of
pleasure vessels.
• Duty on tobacco will increase by £25 per master case (50p
per carton / 5p per box of 20 cigarettes). Duty on vapes and
associated products will be set at 50% of the rate of a packet of
20 cigarettes.
• Import duty will be reduced to zero in relation to the following
health & tness related items: tness trackers, bicycles, bicycle
accessories or spare parts, treadmills and all other gym or
tness equipment.
Consultation Process
The Chief Minister announced the introduction of a consultation
process in relation to tax with the aim of focusing on adaptive and
progressive scal policy. Consultation will be facilitated with various
industry bodies by the Gibraltar Finance Centre Council. Topics
subject to consultation will include the following:
• Pillar Two Global Minimum Tax;
• The introduction of a tax deduction in relation to the amortisation
of acquired intangible assets (e.g. goodwill);
• The introduction of Group Relief.
• A review of the Income Tax Sub-Contractors Regulations 1994;
and
• A potential alignment of the tax ling requirements with those of
the Company Registrar (including a review of the payment dates
for corporate
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Tax Facts 2023/2024
Who is liable to taxation in Gibraltar?
Income tax is charged on income accruing in or derived
from Gibraltar.
Income tax is also charged on certain income accrued in, derived
from or received in any place other than Gibraltar by any person
ordinarily resident in Gibraltar.
Gibraltar has introduced a number of tax incentives which allow
certain categories of resident individuals to limit the total tax
payable in any tax year, subject to certain criteria being met
(see page 28).
Individuals
An individual will be considered to be ordinarily resident when
they are present in Gibraltar for at least 183 days in the year of
assessment, or over 300 days in aggregate over three consecutive
years of assessment.
Any part of a 24 hour period commencing at midnight will
be counted as a day of presence whether or not Gibraltar
accommodation is used.
The tax year runs from 1 July to 30 June and tax is payable on the
actual taxable prots for the year.
Individuals have the choice of being taxed under either an
Allowance Based System (see page 24) or under a Gross Income
Based System (see page 26) and will be assessed for tax under the
system that results in the lower tax.
The rules prevent one family member beneting from the Gross
Income Based System and another from obtaining the benet of
certain allowances (such as mortgage interest relief) under the
Allowance Based System.
The standard rate of withholding tax for individuals under the
emergency code is 20%.
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Companies
A company will be considered resident in Gibraltar if the
management and control of its business is exercised from Gibraltar.
A company where the management and control is exercised outside
Gibraltar by persons who are ordinarily resident in Gibraltar is also
considered resident in Gibraltar.
The location of central management and control is established
under legal principles laid down in the United Kingdom and is the
place of the highest form of control and direction over a company’s
affairs, as opposed to decisions on the day-to-day running of the
business.
Companies are subject to taxation on income accrued in or derived
from Gibraltar on the taxable prots for the nancial year.
Those businesses whose income arises from an underlying activity
that requires a license and regulation under any law of Gibraltar (or
is licensed in another jurisdiction but enjoys passporting rights into
Gibraltar) shall be deemed to accrue in and derive from Gibraltar.
Income which is not accrued in or derived from Gibraltar is not
taxed in Gibraltar. “Accrued in and derived from” is dened by
reference to the location of the activities which give rise to the
prots.
Where the income is intercompany interest or royalties it is
automatically deemed to accrue in and derive from Gibraltar if it is
received by a Gibraltar company.
The standard rate of taxation
The standard rate of taxation for a company is 12.5%. Utility and
energy providers and companies that abuse a dominant position
pay a higher rate of 20%.
Partnerships
Partnerships are generally viewed as transparent entities for tax
purposes and therefore the prots or gains from the partnership are
deemed to be the share to which the partner was entitled.
The tax year runs from 1 July to 30 June and the basis of taxation is
on current year prots.
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Branches
The basis for taxation of branches of foreign enterprises is the same
as for companies.
Trusts
A trust is considered resident in Gibraltar where it has one or
more beneciaries who are ordinarily resident for tax purposes in
Gibraltar (excluding Category 2 individuals). A Gibraltar resident
trust is subject to taxation in Gibraltar at the rate of 12.5%.
A Gibraltar trust which has non-resident beneciaries is not subject
to taxation in Gibraltar and all of its income (with the exception of
Gibraltar rental income, income from a trade, business, profession
or vocation which has accrued in and derived from Gibraltar) may
be accumulated free of tax in Gibraltar.
Foundations
A foundation is resident in Gibraltar unless persons who are
resident in Gibraltar and their issue have been irrevocably excluded
from receiving benet from the foundation. A foundation resident in
Gibraltar is subject to taxation in Gibraltar at a rate of 12.5%.
Taxable income
Income tax is charged on:
• Gains or prots from any trade, business, profession or vocation;
• Gains or prots from employment including any allowances,
perquisites or benets in kind;
• Rents, premiums and any other prots arising from any interest
in real property;
• Dividends (see page 11);
• Interest (see page 11);
• Royalties (see page 11);
• Income received from pensions imported from abroad
(see page 30).
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Dividends
There is no charge to tax on the receipt by a Gibraltar company
of dividends from any other company, regardless of where
incorporated.
There is no tax on dividends paid by one Gibraltar company to
another, and there is no liability to tax on dividends paid by a
Gibraltar company to a person who is not resident in Gibraltar.
Where a dividend, or part of a dividend, is the distribution of prots
that were not assessable to tax in Gibraltar in the hands of the
company that originally generated the income, then the dividend,
or relevant part of the dividend is not taxable in the hands of an
ordinarily resident individual receiving the dividend.
There is also no withholding tax on dividends paid, however, where
a company declares a dividend, a return of dividends is required.
Listed companies are exempted from this requirement.
Interest
Companies with a banking or money lending license earning
interest as a trading receipt, will have that interest treated as
income chargeable to tax.
The portion of the interest which relates to a return on own funds
(i.e. not funds from deposit taking activities) is not subject to tax.
Interest received or receivable by a Gibraltar company, arising from
an inter-company loan, will be chargeable to tax. Where the interest
received or receivable is less than £100,000 per annum, the interest
is exempt from any charge to taxation.
All other interest received or receivable is not taxable in Gibraltar.
Royalties
Royalties received or receivable by a Gibraltar company are
chargeable to tax.
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Exempt income
The main types of exempt income are summarised below:
• Interest from nancial institutions and listed investments;
• Dividends from companies listed on a recognised stock
exchange;
• The income of a friendly society, sporting club, or ecclesiastical,
charitable or educational institution or trust of a public character
in so far as the income is not derived from a trade or business:
• Compensation for unfair dismissal and sums paid upon
redundancy or retirement which have been approved as
appropriate by the Commissioner;
• The investment income of any pension fund, provident fund
or other fund established in Gibraltar, and approved by the
Commissioner;
• The income received by any trust or beneciary where the
beneciaries are all non-Gibraltar resident (this exemption also
applies to Category 2 individuals, see page 28);
• Any income arising from Gibraltar by an individual not resident in
Gibraltar for a period of less than 30 days in a tax year;
• Pensions received from an approved occupational pension
scheme by individuals aged 60 or over (see page 29);
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• The gains or prots derived by a non-resident
owner, charterer or operator of ships or aircraft
for the carriage of passengers or cargo to or
from Gibraltar in any ship or aircraft owned,
chartered or operated by them;
• The income accruing to a life fund maintained
by a life assurance company;
• Income received by a student from employment
during vacation, where the income from
employment during such vacation is followed
by full time instruction at an educational
establishment;
• Income received by individuals participating
in a Government Vocational Training Scheme
approved by the Commissioner;
• Income received by community care ofcers
aged between 60 and 65 years of age in
respect of community work;
• Medical insurance premiums paid by an
employer to an approved scheme on behalf
of employees up to an amount of £3,000 for
individuals taxed under the Gross Income
Based System and £5,395 for individuals taxed
under the Allowance Based System; and
• Benets in kind to an annual value of £250 per
employee.
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Deductions allowed
For the purpose of ascertaining the assessable income there shall
be deducted all outgoings and expenses wholly and exclusively
incurred in the production of the income.
There are also a number of incentives available to taxpayers which
may be taken as a deduction (please refer to the deductions section
on pages 20-22).
In the case of a person who has income, some of which is
chargeable to tax and some of which is not, the deductions allowed
shall be apportioned on a pro-rata basis between the chargeable
and non-chargeable income.
No deduction shall be allowed
in respect of:
• Expenses not incurred
wholly and exclusively in the
generation of assessable
income;
• Domestic or private
expenses;
• Any expenses of a capital
nature;
• Any sum recoverable under
an insurance contract or
contract of indemnity;
• Property expenses not
incurred for the purposes of
producing income;
• Any tax charged under the
Income Tax Act;
• Depreciation of assets
(although capital allowances
are available, see page 15);
• Contributions paid to an
employee pension scheme
where the scheme has
not been approved by the
Commissioner of Income
Tax;
PwC | Gibraltar Tax Facts 2023/2024 15
• Interest paid other than on borrowings for the purposes of the
trade or profession or acquiring the capital which generates the
income for the trade or profession;
• General head ofce expenses incurred for the common purpose
of the branch of the company which exceed 5% of turnover of
the branch; and
• Certain business entertainment expenditure which does not
qualify as deductible under the guidelines provided by the
Commissioner of Income Tax.
Certain other expenses may also be disallowed under anti-
avoidance provisions (see page 30).
Capital allowances
The rst £30,000, of qualifying
expenditure on plant and
machinery (including xtures
and ttings) acquired in a year
of assessment is fully deductible
with the balance deductible at
the rate of 15% per annum on
a reducing balance basis. For
accounting periods (or years of
assessment as the case may be)
ending in the period 1 July 2021
to 30 June 2023, the capital
allowances deduction will be
based on the higher of:
• The rst £60,000 of qualifying
expenditure; and
• 50% of the qualifying
expenditure incurred.
with the balance deductible at
the rate of 25% per annum on a
reducing balance basis.
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The rst £50,000 of qualifying expenditure on computer equipment
(including software) is fully deductible and the remaining balance
is deductible at the rate of 15% per annum on a reducing balance
basis. For accounting periods (or years of assessment as the case
may be) ending in the period 1 July 2021 to 30 June 2023, the
capital allowances deduction will be based on the higher of:
• The rst £100,000 of qualifying expenditure; or
• 50% of the qualifying expenditure incurred.
with the balance deductible at the rate of 25% per annum on a
reducing balance basis.
Expenditure on motor vehicles which does not qualify as plant
and machinery does not benet from a rst year allowance but is
deductible at the rate of 15% per annum on a reducing balance
basis (25% per annum on a reducing balance basis for accounting
periods (or years of assessment as the case may be) ending in the
period 1 July 2021 to 30 June 2023)).
For unincorporated businesses and companies that are obliged
to pay the higher rate of corporate tax, wear and tear allowances
are 20% per annum on a reducing balance basis (30% per annum
on a reducing balance basis for accounting periods (or years of
assessment as the case may be) ending in the period 1 July 2021
to 30 June 2023)).
If the accounting period is less than 12 months, the pool allowance
is apportioned by reference to time.
Where the balance of qualifying expenditure is less than £1,000, the
full amount is allowed as a deduction in that year.
Capital allowances on the cost (excluding land) of hotels, mills,
factories and other similar premises are deductible at the rate of 4%
per annum on a straight line basis.
For accounting periods (or years of assessment as the case may
be) ending in the period 1 July 2021 to 30 June 2023, a general
wear and tear allowance in relation to real property is available at
the rate of 1% per annum on the cost (excluding land) of acquiring
the property from where a business is conducted (excluding
industrial buildings).
Capital payments for leases which are for periods of less than 12
years qualify for capital allowances on a straight line basis over the
remaining period of the lease.
Newly established businesses are able to claim 100% of their
eligible capital allowances in the rst year of trading.
PwC | Gibraltar Tax Facts 2023/2024 17
Construction costs in relation to ofce accommodation where works
commenced between 1 July 2013 and 31 March 2015, and for high
value accommodation where works commenced between 1 July
2014 and 31 December 2015, are available as a capital allowance
deduction in the rst year following completion of construction equal
to 30% of construction costs and the remaining 70% written down
over the following seven years. This allowance can be claimed
in part or in full by either the developer or the occupant up to a
maximum claim of the full construction costs. Construction costs
are those costs wholly and exclusively laid out or expended in the
construction of the ofce accommodation including all preliminary
planning, design and associated costs but excluding the cost of the
land.
Losses
A trading loss incurred in an accounting period may be offset
against trading income, if any, arising in the same period or
subsequent periods.
If, however, within any period of three years there is both a change
in ownership and a major change in the nature and conduct of
a trade, trading losses may not be offset against trading income
arising in the same or subsequent periods. A Bill was introduced
in 2020 which allows the transfer of losses between group entities
upon restructuring, provided that there is no change to the ultimate
ownership or a change of business within a period of three years.
The changes allow losses to be carried forward against a business
even if the business is transferred to another company under the
same ultimate ownership. Anti-abuse provisions restrict the transfer
of losses to instances of legitimate group restructuring. The transfer
of accumulated losses from one type of business to another is
specically prohibited.
Any losses not connected with or arising from the trade, business,
profession, or vocation are not allowable deductions.
There is no provision for the carrying back of losses
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Group relief
There is no group relief available in Gibraltar although the Gibraltar
Government has announced a consultation process which will look
at the introduction of Group relief in Gibraltar.
Withholding tax
There is no withholding tax on interest, dividend or royalty
payments.
Withholding tax on payments to subcontractors
Payments made to a subcontractor without a valid certicate are
subject to 25% withholding tax on that portion of the payment which
is not for materials used in construction. The Gibraltar Government
has announced a consultation process which will look to modernize
this legislation..
Value added tax
There is no VAT in Gibraltar.
Customs and excise duties
Goods imported into Gibraltar are subject to import duty at
varying rates.
Exchange of information
The following mechanisms for the exchange of information apply in
Gibraltar:
• Bilateral Tax Information Exchange Agreements with a number
of countries;
• The Directive on Administrative Cooperation.
• US FATCA.
• The Convention on Mutual Administrative Assistance in Tax
Matters.
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• The OECD Common Reporting Standard.
• Country by Country Reporting. Where the Gibraltar entity
is a member of a Multi National Enterprise (“MNE”) group
which has consolidated turnover of over EUR 750 million, the
Gibraltar entity must notify the Commissioner of Income Tax
of the identity and jurisdiction of tax residence of the entity
that will le the CBCR on behalf of its MNE group by nine
months after the nancial year end. Where the Gibraltar entity
is the ultimate parent entity for the group or it is obliged to
le a full Country by Country Report, this ling must be made
within 12 months of the nancial year end.
• Gibraltar has limited DAC6 Reporting scope whereby
reporting is only applicable to cross-border arrangements
falling within Category D hallmarks (CRS avoidance
arrangements and opaque offshore structures). The Income
Tax Act 2010 has been amended to reect this change.
However, the International Agreements on Taxation Matters
(Spain) Regulations 2021 have introduced equivalent
reporting requirements to DAC6 in relation to reportable
cross-border arrangements involving Gibraltar and Spain. In
practice this means that:
• For cross-border arrangements not involving Spain only
Hallmark D needs to be considered for reporting purposes.
• For cross-border arrangements involving Spain, all Hallmarks
(A-E) need to be considered for reporting purposes.
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Deduction for improvement in EPC rating
A deduction is available for the investment made by an individual,
company or business that makes a signicant improvement to the
EPC rating. The amount of deductible expenditure is subject to the
agreement of the Commissioner of Income Tax and the percentage
deduction depends on the energy efciency rating of the property.
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Training costs
Training costs for employees working towards a qualifying
qualication are allowable as an expense at the rate of 150%. For
accounting periods ending in the period 1 July 2021 to 30 June
2023 a deduction can be claimed at the rate of 160%.
Employment Incentive
In relation to accounting periods ending in the period 1 July 2021 -
30 June 2023, a further deduction is available based on 50% of the
xed salary cost of new employees employed after 1 July 2021.
Marketing Incentive
An additional deduction amounting to 50% of marketing costs may
be available in relation to accounting periods ending in the period 1
July 2021 – 30 June 2023. However, a Bill has been drafted which if
enacted would reduce the scope of the deduction available.
Property Investment Incentives
Development aid: In order to encourage private development
in Gibraltar, promoters and developers of approved projects are
offered certain incentives such as tax relief, import duty relief and
rates relief.
In order to qualify for the above reliefs, the project needs to be a
new project the aim of which is:
• To create a tangible immovable asset in Gibraltar that will remain
in existence after the applicant has ceased to derive the benets
under the licence; and
• To provide more than two additional units of housing
accommodation in Gibraltar; or
• To contribute materially to the development of the tourist industry
in Gibraltar; or
• To afford any new employment opportunities or career prospects
in Gibraltar; or
• Otherwise, to improve materially the economic or nancial
infrastructure of Gibraltar; and
• The project shall be one which is for the economic benet of
Gibraltar.
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The project needs to be completed within a specied time
(dependent on the type of project) following the issue of the license
and the applicant must not expend less than the prescribed amount
for the project.
Application for development aid must be made to the Chief Minister
or such other Minister as the Chief Minister designates.
Construction of residential accommodation
Owners of property constructed in Gibraltar from 1 July 2016 to 1
January 2019 and rented for residential purposes are eligible to
receive a tax credit equal to the tax payable on the prots earned
on the rst twenty-four months of rent occurring in the rst ve
years after the completion of construction of that property. This tax
credit is non-refundable and can be offset against the tax payable to
extinguish any liability to tax.
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Construction of high value accommodation
incentives
For high value accommodation developments whose construction
commenced between 1 July 2014 and 31 December 2015, capital
allowances equal to 30% of construction costs are available as
a tax deductible expense in the rst year following completion of
construction with the remaining 70% written down over the following
7 years.
This allowance can be claimed in part or in full by either the
developer or the occupant up to a maximum claim of the full
construction costs. Construction costs are those costs wholly and
exclusively laid out or expended in the construction of the ofce
accommodation including all preliminary planning, design and
associated costs but excluding the cost of the land.
Construction of ofce accommodation incentives
For ofce accommodation developments where construction
commenced between 1 July 2013 and 31 March 2015, capital
allowances equal to 30% of construction costs will be available as
a tax deductible expense in the rst year following completion of
construction with the remaining 70% written down over the following
7 years.
This allowance can be claimed in part or in full by either the
developer or the occupant up to a maximum claim of the full
construction costs. Construction costs are those costs wholly and
exclusively laid out or expended in the construction of the ofce
accommodation including all preliminary planning, design and
associated costs but excluding the cost of the land.
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Allowance Based System
Under the Allowance Based System the individual will be taxed on
their income less allowances (see below) at the applicable rates:
Gross
Assessable
income more
than £100,000
The rst £4,000 of taxable income 15% 16%
The next £12,000 of taxable income 18% 19%
The remainder 40% 41%
Personal relief is granted on submission of a claim to the tax
ofce when applying for a tax code upon registration. The main
allowances (which are reduced by one twelfth for each complete
calendar month that the individual is not resident in Gibraltar) for the
tax year are as follows:
Personal allowance £3,455
Spouse allowance £3,455
One parent family £5,800
Child allowance in respect of rst child only £1,190
Child allowance in respect of each child educated abroad £1,375
Disabled individuals £10,000
Nursery school allowance in respect of each child attending £5,480
Blind allowance £5,475
Health insurance premiums (i) £5,395
Life assurance premiums (ii) 100%
Pension’s contributions (iii) 100%
Mortgage interet (iv) 100%
House purchase for residential accommodation (v) £17,000
Solar or wind energy systems (vi) £6,000
Age allowance (state pensionable age - claiming spouse allowance) £5,735
Age allowance (state pensionable age – not claiming spouse allowance) £9,190
Gross
Assessable
income less
than £100,000
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The minimum total allowances amount to £4,343.
i. Maximum relief.
ii. Allowable premiums up to 1/7th of assessable income or 7% of
capital sum assured.
iii. Maximum relief will be equal to the lesser of 20% of the earned
assessable income and £35,000 on contributions to a Personal
Pension Scheme or Retirement Annuity Contract and 1/6th of
the total assessable income in respect of contributions to an
Occupational Pension Scheme.
iv. Interest payable on a loan to acquire a Gibraltar property to be
used as a taxpayer’s principal residence is allowable on loans up
to a value of £350,000.
v. One off allowance of £13,000 spread over a number of years
and additional allowance of £4,000 restricted to a maximum of
£1,000 per year.
vi. One off allowance of £6,000 spread over two years
Persons whose taxable income does not exceed £11,450 per
annum are exempt from tax.
Taper relief is available for individuals whose taxable income is
between £11,451 and £19,712 per annum.
A tax credit equal to the higher of £300 or 2% of the tax payable for
the year is available.
There is also a tax credit of up to £4,000 available for individuals
aged 60 and over who are not in receipt of pension or annuity
income in excess of £6,000.
26 PwC | Gibraltar Tax Facts 2023/2024
Gross Income Based System
Under the Gross Income Based System the applicable tax rates are
as follows:
Persons with gross income under £25,000 are taxed at the following
rates:
The rst £10,000 of taxable income 7%
The next £7,000 of taxable income 21%
The remainder of taxable income 29%
Persons with gross income over £25,000 are taxed at the following
rates:
First £17,000 of taxable income 17% 18%
Next £8,000 of taxable income 20% 21%
Next £15,000 of taxable income 26% 27%
Next £65,000 of taxable income 29% 30%
Remainder of taxable income N/A 27%
Persons under the Gross Income Based System may also benet
from a deduction from their assessable income of:
• Up to a maximum of £1,500 per annum in respect of mortgage
interest payments;
• Up to a maximum of £1,500 per annum in respect of pension
contributions to an approved scheme;
• Up to a maximum of £5,000 per annum in respect of approved
expenditure incurred on the enhancement of the frontage of their
property;
• Up to a maximum of £7,500 per annum in respect of approved
expenditure incurred towards the purchase of their home (this
benet is available to rst time home buyers only and if purchase
occurs on or after 1 July 2019);
• Up to a maximum of £3,000 per annum in respect of expenditure
incurred towards private medical insurance premiums.
• Up to a maximum of £6,000 over two years in respect of
expenditure incurred towards the installation of solar or wind
energy systems.
Gross
Assessable
income more
than £100,000
Gross
Assessable
income less
than £100,000
PwC | Gibraltar Tax Facts 2023/2024 27
Benets in kind
Benets in kind are taxed as gains from employment. There is
specic legislation on how to tax benets and the allowances
available, particularly with respect to:
• Expense payments;
• Vouchers and credit tokens;
• Living accommodation;
• Cars, vans and related expenditure;
• Loans to employees, directors and shareholders; and
• Removal benets and expenses.
The Act provides a mechanism for the Commissioner to tax benets
not specically covered in the legislation. The value of the benet
is the cost to the employer less any amount made good by the
employee.
Where the aggregate value of the benets is less than £250 in total
for any year of assessment no tax is payable in respect of those
benets.
The employer may opt to pay the tax on the benets on behalf of
an employee. When the annual value of these benets is between
£250 and £15,000 tax shall be paid at the rate of 20%. When the
annual value of the benet is more than £15,000 tax shall be paid at
the rate of 29%.
28 PwC | Gibraltar Tax Facts 2023/2024
Tax incentives
Category Requirements Tax per
annum
Category
2 (High
Net Worth
Individuals)
Approved residential
accommodation.
Non Gibraltar resident for
the ve years preceding the
application.
Minimum of £2 million net
assets.
Minimum of
£37,000
Maximum of
£44,740 (i)
High
Executive
Possessing
Specialist
Skills
(‘’HEPSS’’)
Approved residential
accommodation.
Non Gibraltar resident for
three years preceding the
application.
Minimum annual salary
requirement of £160,000.
Possess skills not available in
Gibraltar which are necessary
to promote and sustain
economic activity of particular
economic value.
£43,140
(i) The tax shelter does not extend to any income from a trade,
business, profession, vocation or employment in Gibraltar
which is assessable to tax under the provisions of the Act.
PwC | Gibraltar Tax Facts 2023/2024 29
Social insurance contributions
Social insurance contributions are payable by every employee or
self-employed person in any week in which they work as follows:
Per week/month
Gross earnings Minimum Maximum
Employee
(From 1 July 2023) 10% £13.00/£56.34 £37.00/£160.33
Employer
(From 1 July 2023) 18% £29.00/£125.67 £51.00/£221.00
Self-employed
(From 1 July 2023) 20% £29.00/£125.67 £51.00/£221.00
Individuals aged 60 and over and those whose statutory
occupational retirement age is earlier than 60, as in the case
of a re ofcer, police ofcer, prison ofcer or a member of the
Royal Gibraltar Regiment and are in insurable employment shall
be exempt from paying the employee’s share of social insurance
contributions.
Employers will continue to be required to pay their share of the
contribution.
There is an exemption from employers’ and employees’ social
insurance contributions in respect of an employee’s secondary
employment. This is subject to the full contribution having been paid
in Gibraltar. There is also an exemption from social insurance for
student’s income from employment or vocation which is followed by
full time employment.
A credit in respect of employers’ social insurance contributions
is available to businesses with 10 employees or less of £100 per
employee. This is increased to 20 employees for new businesses
within the rst year of operation.
There is also an exemption from both the payment of employer and
employee social insurance contributions in the case of payments
received whilst on maternity leave.
Pension schemes
Overall employer and employee contributions are eligible for tax
relief of up to 25% of earned income in respect of contributions
made to approved occupational pension schemes (including
contributions by proprietary directors and shareholders).
Tax relief on contributions to retirement annuity contracts and
approved personal pension schemes is limited to the lower of 20%
of earned income or £35,000.
30 PwC | Gibraltar Tax Facts 2023/2024
Employees can obtain tax relief on contributions to an approved
scheme of up to 1/6th of their earned income. The 1/6th limit
includes premiums payable on approved life insurance policies
which are themselves subject to an earnings cap of 1/7th of earned
income.
Pensions received from an approved occupational pension scheme
by individuals aged 60 or over or who are compulsorily retired at
age 55 under Section 8(2) of the Pensions Act (applicable to re
ofcers, police ofcers, prison ofcers or members of the Royal
Gibraltar Regiment) are not subject to tax in Gibraltar.
Where contributions to approved personal pension schemes
and retirement annuity contracts in any one year are below the
maximum tax relief that can be claimed for that year, a ‘one year
carry back’ facility is available enabling members of such schemes
to top-up any unused tax relief.
Pensions received from an approved pension scheme imported
from another country (“QROPS”) shall be taxed at the rate of 2.5%
insofar as it forms part of the taxable income of that individual.
Anti-avoidance provisions
The legislation contains a generic anti-avoidance clause which
allows the Commissioner to disregard an arrangement which he
believes is ctitious or articial and also requires promoters of tax
planning schemes to notify the Commissioner within 30 days of any
schemes which result in the payment of less tax.
The Act also contains specic anti avoidance provisions
as follows:
Exit Tax: An exit tax at the rate of 12.5% may be applicable in a
number of dened circumstances when assets are transferred
from Gibraltar, or a taxpayer transfers its tax residence outside of
Gibraltar. The exit tax is calculated based on the market value of the
assets at the time of their transfer from Gibraltar less their value for
tax purposes.
Thin capitalisation rules: Interest paid on a loan by a company
to related parties (which are not themselves a company) or loans
where security is provided by related parties, where the ratio of the
value of the loan capital to the equity of the company exceeds 5 to
1 is considered as a dividend payment and thus not a deductible
expense for tax purposes.
Transfer pricing legislation: The amount of interest payments
to connected persons which is in excess of that payable at “arm’s
length” is deemed to be a dividend.
PwC | Gibraltar Tax Facts 2023/2024 31
Also, if the amount charged for goods and services by the
connected persons is not at “arm’s length” expenses allowed
are subject to a maximum of (i) the expense, (ii) 5% of the gross
turnover of the company or (iii) 75% of the pre expenses prot of
the company.
Interest payable and back to back loans: Any interest paid or
payable to a person not resident in Gibraltar is not deductible
insofar as the interest is at more than a reasonable
commercial rate.
Any interest paid on any money borrowed other than for the
purposes of the trade or profession, is also not deductible.
Where the interest income is not taxable the interest expense is not
deductible on back to back loans.
Dual employment contracts: Income from dual employment
contracts is taxed in Gibraltar where the two employers are
connected persons. Bona de arrangements where the purpose is
not to avoid tax is a defence to the provision.
Transfer of assets abroad: Where assets are transferred abroad
with the purpose of avoiding taxation and the taxpayer has the
power to enjoy these assets either now or in the future, then any
income or benets received from these assets will be deemed
to be income chargeable to tax. This provision does not apply if
the transaction is bona de and not designed for the purpose of
avoiding tax.
Interest Limitation Rule: The interest limitation rule provides
that exceeding interest expenses are deductible up to the greater
of (i) 30% of EBTDA and (ii) EUR 3 million. Note that there are
exceptions to the rules which may provide for a greater interest
deduction based on either group ratio or equity ratio calculations.
Controlled Foreign Company (“CFC”) Rule: A CFC has annual
accounting prots of (i) greater than €750 million or (ii) greater than
10% of operating costs. The rule attributes to a Gibraltar company
the undistributed prots of a CFC (ie Gibraltar entity has at least
50% of either the voting rights, the capital or is entitled to receive
50% of the prots and the actual tax paid is less than 50% of the
tax that would have been paid in Gibraltar on the same income)
from non-genuine arrangements where the purpose is to gain a tax
advantage.
Hybrid Mismatch: Payments under hybrid instruments and
payments to associated hybrid entities will be disregarded where
the deduction or payment benets from a tax deduction in the payer
jurisdiction and is not taxed in the jurisdiction where the payment is
received.
32 PwC | Gibraltar Tax Facts 2023/2024
Double taxation relief
Any person ordinarily resident in Gibraltar who is liable to pay
tax in Gibraltar in respect of income also taxed abroad is able to
claim double taxation relief in respect of the tax paid abroad. On
furnishing evidence of the payment made abroad, the claimant is
entitled to a credit equivalent to the lesser of the:
• Tax payable on that income in Gibraltar; or
• Tax payable or paid abroad in respect of the same income.
If relief from the double taxation has to be made abroad, the relief
then given is reduced accordingly.
A claim for double taxation relief has to be made within six years
after the end of the year of assessment to which it relates. The time
limit is extended where any adjustment or assessment made in
Gibraltar or abroad renders any relief previously given excessive or
insufcient. In those circumstances, a claim must be made within
the six years after the adjustment or assessment.
Capital gains tax
There is no capital gains tax in Gibraltar. In deciding whether an
activity is a trade or a capital gain the Commissioner will refer to
case law.
Wealth tax
There is no wealth tax in Gibraltar.
Estate duty
There is no estate duty in Gibraltar.
Rates
General rates are levied on all properties in Gibraltar.
Purchasers of affordable homes benet from a rates holiday,
starting with zero rates in the rst year, increasing by 10% annually
thereafter.
PwC | Gibraltar Tax Facts 2023/2024 33
Stamp duty
Stamp duty is payable on the transfer or sale of any Gibraltar real
estate or shares in a company owning Gibraltar real estate (on
an amount based on the market value of the real estate) at the
following rates:
Consideration % value of consideration
£200,000 or less 0%
£200,001 to £350,000 2% on rst £250,000
and 5.5% on balance
Over £350,000 3% on rst £350,000
and 3.5% on balance
For rst and second time buyers, there is no stamp duty to pay on
the rst £300,000 of the cost of the property, irrespective of the total
cost. Stamp duty on transfers of properties between spouses is nil.
It is also proposed that the stamp duty rate applicable to property
sales over £800,000 will increase from 3.5% to 4.5% with the
effective date to be conrmed at the time of publication.
On affordable housing estates developed by Government, the
following applies:
• There is no stamp duty on the initial purchase price of the
property; and
• A special rate of stamp duty of 7.5% is payable on the sale of
affordable housing developed by Government within the rst
10 years since original purchase. The duty is not payable in
circumstances of a forced sale, including in the cases of divorce
or where a family moves to a larger property as a meritorious
upgrade to another, newer, Government affordable housing
estate.
Stamp duty is also payable on mortgages secured on Gibraltar real
estate at the following rates:
Mortgage % value of mortgage
£200,000 or less 0.13%
Over £200,000 0.20%
34 PwC | Gibraltar Tax Facts 2023/2024
Capital duty
Capital duty of £10 is payable on the initial authorisation of capital
or any subsequent increase thereto.
Gaming duty
Gaming duty is levied at 0.15% on the gross prots of holders of a
bookmaker, betting intermediary and gaming operator’s licence. The
rst £100,000 of gross prots is exempt from this duty.
Tax returns
Both individuals and companies (including a branch of a company
situated in Gibraltar) are required to le returns and calculate their
tax liability for the year. The return together with the estimated
liability needs to be accompanied by the payment of the tax due.
Tax returns for individuals, partnerships, sole traders and trusts
are due by 30 November following the year in which the income is
assessed. Tax returns for companies (and Gibraltar branches) are
due nine months after the date of the company’s nancial year end.
Minimum accounts ling requirements with tax returns
Companies with assessable income of more than £1.5 million are
required to le audited accounts together with the tax return.
Companies (including Gibraltar branches) with assessable income
of less than £1.5 million are required to le accounts accompanied
by an Independent Accountant’s Report with the tax return.
Companies with no assessable income are still required to le a tax
return together with audited accounts. However, if a company with
no assessable income is classied as “small” (in accordance with
the criteria set out in the Companies Act 2014) only an abridged
balance sheet needs to be led together with the tax return.
PwC | Gibraltar Tax Facts 2023/2024 35
Payment of tax
For employees, collection of tax is initially through a Pay As You
Earn (“PAYE”) system. Every employer paying emoluments to an
employee is required to deduct from the amount of emoluments
a specied amount of tax. Payment is due by the 15th day of the
following month. At the end of the year of assessment the employer
is obliged to make a return of the employees’ emoluments and tax
deducted together with the payment of any outstanding tax. Returns
are due by 31 July following the year of assessment. Late ling of a
return will incur a penalty of £10 per employee per day.
Individuals are required to make two payments on account on 31
January and 30 June in each year of assessment. Each payment
should be equal to 50% of the tax liability for the previous tax
year. The ‘on account’ payments are not applicable to individuals
whose only income is from employment which is subject to PAYE
deductions.
Companies are required to make payments on account of future
liabilities on 28 February and 30 September in each calendar year.
Each payment should be equal to 50% of the tax based on the
previous year’s assessable income.
The balance of tax due being the actual liability less payments on
account is due on the date of ling of the return which must be
within nine months of the nancial year end for companies and by
30 November for individuals, partnerships, sole traders and trusts.
Appeals
If a taxpayer disputes an assessment, he may appeal against that
assessment by notice in writing addressed to the Commissioner
within 28 days of the date of service of the notice of the
assessment.
Fines and penalties
Penalties are imposed if tax is not paid or if returns are not led by
the due dates. The following penalties and nes are applicable:
For late payment of tax, there is a penalty of 10% of the amount
of tax due on the day immediately after such payment was due.
If unpaid for 90 days a further amount of 20% of the tax due is
charged.
Failure to le a return by the due date will result in a penalty of £50
with a further penalty of £300/£500 if the return is not submitted
within three months/ six months after the due date.
36 PwC | Gibraltar Tax Facts 2023/2024
From 1 July 2023, the following late ling penalties will
apply based on the size of companies as dened in
the Companies Act 2014:
*At the time of publication, the legislation introducing the
changes to late ling penalties had not been enacted. *
After 3 months 6 months
due date after due date after due date
Mirco/Small £100 £450 £750
Medium £750 £1,250 £2,000
Large £1,500 £3,500 £5,000
Failure to le a return or for fraudulently, recklessly
or negligently delivering to the Commissioner an
incorrect return, accounts or information will be liable
to a penalty of up to 150% of the difference between
the actual tax due and the tax due as per the original
declaration, if any. The amount of the penalty will
depend on:
• The amount of the tax lost and/or delayed;
• The gravity of the offence, if deliberate or an
honest mistake; and
• The level of cooperation in the investigation.
Failure to respond to a notice or request to submit
information or documentation within 30 days will result
in a ne of £200 on the day the failure occurs and a
penalty of up to £500 per day thereafter. Failure to
comply beyond a three month period, if convicted, can
result in imprisonment.
Failure to pay to the Commissioner PAYE or social
insurance which has been withheld/should have
been withheld is a criminal offence which can lead to
imprisonment and/or a ne. If an amount of PAYE and/
or social insurance exceeding £5,000 is outstanding
for over three months the Commissioner will, after
giving 14 days’ notice, publish in the Gibraltar
Gazette the name of the person whom he has
reason to believe has failed to comply with the PAYE
Regulations.
Failure to notify the Commissioner of an arrangement
the main benet of which is to avoid the payment of
tax will result in a ne of £100 on the day the failure
occurs and a penalty of £200 per day thereafter.
PwC | Gibraltar Tax Facts 2023/2024 37
Corporate
2023/24 2022/23 2021/22 2020/21 2019/20
Corporate tax rate (%) 12.5 12.5 12.5 10 10
The corporate tax rate is 12.5%. This increased from 10% on 1
August 2021.
Utility and energy providers and companies that abuse a dominant
position pay a higher rate of 20%.
Personal
Allowance Based System - Rates
Less than £100,000 gross assessable income
2023/24 2022/23 2021/22 2020/21 2019/20
4,000 15% 16% 14% 14% 14%
12,000 18% 19% 17% 17% 17%
Balance 40% 41% 39% 39% 39%
More than £100,000 gross assessable income
2023/24 2022/23 2021/22 2020/21 2019/20
4,000 16% 16% 14% 14% 14%
12,000 19% 19% 17% 17% 17%
Balance 41% 41% 39% 39% 39%
A tax credit is available equal to the higher of £300 or 2% of the tax
payable for the year.
Historical Tax Rates
38 PwC | Gibraltar Tax Facts 2023/2024
Allowance Based System - Allowances
2023/24 2022/23 2021/22 2020/21 2019/20
Personal allowance 3,455 3,455 3,455 3,455 3,455
Spouse allowance 3,455 3,455 3,455 3,455 3,455
One parent family 5,800 5,800 5,800 5,690 5,690
Child allowance 1,190 1,190 1,190 1,190 1,190
Child educated abroad 1,375 1,375 1,375 1,355 1,355
Disabled individuals 10,000 10,000 10,000 9,475 9,475
Nursery school allowance 5,480 5,480 5,480 5,400 5,400
(per child)
Blind allowance 5,475 5,475 5,475 5,395 5,395
Health insurance premiums 5,395 5,395 5,395 5,395 5,395
House purchase allowance 17,000 17,000 17,000 17,000 17,000
Age allowance 5,735 5,735 5,735 5,600 5,600
(state pensionable age - claiming spouse allowance)
Age allowance 9,190 9,190 9,055 9,055 9,055
(state pensionable age - not claiming spouse allowance)
Minimum total allowances amount to £4,343.
Individuals 60 years and over not in receipt of income exceeding
£6,000 per annum in respect of an occupational pension/annuity are
eligible for a £4,000 tax credit.
Gross Income Based System - Rates
2023/24 2022/23 2021/22 2020/21 2019/20
Gross Assessable Income below £25,000
10,000 7% 8% 6% 6% 6%
7,000 21% 22% 20% 20% 20%
Balance 29% 30% 28% 28% 28%
Gross Assessable Income above £25,000 but less than £100,000
17,000 17% 18% 16% 16% 16%
8,000 20% 21% 19% 19% 19%
15,000 26% 27% 25% 25% 25%
65,000 29% 30% 28% 28% 28%
395,000 - - 25% 25% 25%
200,000 - - 18% 18% 18%
Balance - 27% 5% 5% 5%
Gross Assessable Income more than £100,000
17,000 18% 18% 16% 16% 16%
8,000 21% 21% 19% 19% 19%
15,000 27% 27% 25% 25% 25%
65,000 30% 30% 28% 28% 28%
395,000 - - 25% 25% 25%
200,000 - - 18% 18% 18%
Balance 27% 27% 5% 5% 5%
PwC | Gibraltar Tax Facts 2023/2024 39
Contacts
For further information please contact:
PricewaterhouseCoopers Limited
327 Main Street
Gibraltar
Telephone: +350 20073520
Website: www.pwc.gi
edgar[email protected]
or your usual PwC contact
Simply scan this code onto your mobile device to arrive at our tax
mobile publications page.
Contact us
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40 PwC | Gibraltar Tax Facts 2023/2024
© 2023 PricewaterhouseCoopers Limited, a Gibraltar limited company. All rights
reserved. PwC refers to the Gibraltar member
rm, and may sometimes refer to
the PwC network. Each member rm is a separate legal entity. Please see
www.pwc.com/structure for further details.
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