Gibraltar Personal and Corporate tax rates for 2017/2018
Gibraltar tax year
The tax year in Gibraltar commences on the 1st July and ends on the following 30th June each year.
Liability to tax in Gibraltar
Liability to Gibraltar taxation is generally based on income “accrued or derived” in Gibraltar. Individuals who are “ordinarily resident” in Gibraltar are generally liable to Gibraltar tax on a worldwide basis.
Gibraltar tax residency
The Income Tax Act 2010 states that an individual is deemed to be “ordinarily resident” in Gibraltar if they are present in any year of assessment for either:
* 183 days; or
* 300 days over a three year consecutive period.
With regards to how these days are counted the rules confirm that if you are physically present for any part of a 24 hour period commencing at midnight then this shall be counted as a day of presence irrespective of whether any accommodation is used in Gibraltar.
In addition to these rules, it is also possible to be tax resident in Gibraltar if you have a special residency status such as Category 2 residency.
Gibraltar tax rates
Ordinarily tax resident individuals have the choice of being taxed under one of two income tax systems (covered in detail below). These two systems operate in parallel to each other and it is possible to opt to use the system which gives you the lower tax outcome.
The gross income based system
The gross income based system allows you to choose a flat tax rate but with very limited allowances.
The tax rates for the gross income based system are summarised below:
For individuals earning up to £25,000:
| 6% | on first £10,000 |
| 20% | on next £7,000 |
| 28% | on balance |
For individuals earning over £25,000:
|
16% |
on first £17,000 |
| 19% | £17,001-£25,000 |
| 25% | £25,001-£40,000 |
| 28% | £40,001-£105,000 |
| 25% | £105.001-£500,000 |
| 18% | £500,001-£700,000 |
| 5% | £700,001 and over |
The allowance based system
The tax rates of the allowance based system are as follows:
| The first £4,000 of taxable income | 14% |
| The next £12,000 of taxable income | 17% |
| The remainder of taxable income | 39% |
All allowance based taxpayers benefit from an automatic tax cut based on the higher of £300 or 2% of the tax bill.
Personal allowances and tax reliefs
| Personal allowance | £3,300 |
| Married allowance | £3,300 |
| Single parent allowance | £5,435 |
| Nursery School Allowance (per child) | £5,160 |
| Child Relief (first child) | £1,135 |
| Child Relief (for each child educated abroad) | £1,290 |
| Disabled Person Relief | £9,285 |
| Dependent Relative (max.) | £315 |
| House Purchase Allowance | £12,000 |
| House Purchase Special Allowance | (£1,000 max p.a.) £4,000 |
| Medical Insurance Allowance | £5,155 |
| Blind Person | £5,155 |
Other personal allowances and tax reliefs
Low income taxpayers: Those who earn income for the tax year is less than £11,500 will pay no tax on this income. Taxpayers who earn between £11,501 to £19,500, benefit from tapering allowances.
Life Assurance Premiums: These are fully allowable provided they do not exceed 1/7 of assessable income or 7% of the capital sum assured at death.
Mortgage Interest: Allowable on residential property occupied by the taxpayer on loans of up to £350,000.
Pension Contributions: Premiums made to approved personal or occupational pension schemes are allowable subject to limits.
Bank & building society deposit interest and income from quoted investments: Tax free.
Gibraltar Government Debentures investments: Exempt from income tax.
Social insurance
Calculated on gross earnings as follows:
| Weekly contributions | Employee | Max. | Employer | Max. |
| Employed (under 60) | 10% | £27.50 | 20% | £36.50 |
| Employed (60 & over) |
– | – | 20% | £36.50 |
| Self employed | 20% | £33.50 | – | – |
Gibraltar Corporate Income Tax
Gibraltar tax resident Companies
A company is deemed to be “ordinarily resident” in Gibraltar if:
The management and control of the company is in Gibraltar
The management and control of the company is outside of Gibraltar, but those exercising management and control of the company are ordinarily tax resident in Gibraltar.
In relation to investment companies, if the management and control is outside of Gibraltar, but is controlled by an ordinarily resident individual (as per the previous bullet point) control can include for the purposes of invesment companies if the ordinarily resident individual has power to secure by means of the holding of shares or the possession of voting power in or relation to that or any other company or by virtue of any pwers conferred by the articles of association or other document regulating that or any other company, that the affairs of that invesment company are conducted in accordance with that person.
Tax liability of Gibraltar tax resident companies
“Ordinarily resident ” companies are liable to tax at a flat rate of 10%.
Tax liability of Gibraltar non resident companies
Companies not ordinarily resident in Gibraltar with no income “accrued or derived” in Gibraltar are not liable to Gibraltar income tax.
Withholding taxes
There is no withholding tax on dividends or on certain interest payments.
EU
Gibraltar is currently within the EU and has access to favourable EU directives.
VAT
There is no VAT or sales tax in Gibraltar.