Frequently Asked Questions: Tax & Filings

Clear answers on Gibraltar's corporation tax, territorial system, filing obligations, payroll, and personal tax regimes including Category 2 and HEPSS.

• What is the Gibraltar corporation tax rate?

  Gibraltar's standard corporation tax rate is 12.5%. This rate applies to all income accruing in or deriving from Gibraltar. There is no separate rate for small companies, capital gains, or qualifying industries — the 12.5% rate applies uniformly to all taxable profits.

• How does Gibraltar's territorial tax system work?

  Under Gibraltar's territorial basis, only income that accrues in or derives from Gibraltar is subject to Gibraltar corporation tax. Income arising wholly outside Gibraltar — for example, from overseas trading, foreign dividends, or interest on funds held abroad — is not taxable in Gibraltar, regardless of whether the company is incorporated or managed here.

• Is there capital gains tax in Gibraltar?

  No. Gibraltar does not levy capital gains tax. Gains on the disposal of shares, property, or other assets are not subject to tax in Gibraltar, which is a significant advantage for holding structures and investment vehicles.

• Does Gibraltar have VAT?

  No. Gibraltar has no value added tax (VAT). There is an import duty system that applies to goods brought into Gibraltar, but no VAT, GST, or similar consumption tax on services or domestic sales. This makes Gibraltar an attractive location for service businesses and online trading.

• When is a company's tax return due in Gibraltar?

  Gibraltar company tax returns must be filed with the Commissioner of Income Tax within nine months of the end of the accounting period. Tax is also payable within nine months of the year-end, though larger companies may be required to make payments on account. Late filing and payment attract interest and penalties.

• When does a Gibraltar company need to file its annual return?

  The annual return to the Gibraltar Companies Registry must be filed within one month of the company's annual return date, which is typically the anniversary of incorporation. The annual return confirms the company's registered office, directors, shareholders, and share capital. Late filing attracts a penalty of £50 per month.

• What are the audit thresholds for Gibraltar companies?

  Companies qualify for the small company audit exemption if they meet at least two of three criteria: annual turnover not exceeding £10.2m, balance sheet total not exceeding £5.1m, and no more than 50 employees. Companies that breach these thresholds, and all regulated entities including licensed funds and fiduciaries, must have their accounts audited by an approved Gibraltar auditor.

• What penalties apply for late filing in Gibraltar?

  Late filing of annual returns attracts a penalty of £50 per month at the Companies Registry. Late submission of tax returns incurs a fixed penalty and interest on unpaid tax at the prescribed rate. Persistent non-compliance can result in a company being struck off the register or, in the case of regulatory filings, direct enforcement action by the GFSC.

• What are CRS and FATCA, and do Gibraltar companies need to report?

  CRS (Common Reporting Standard) and FATCA (Foreign Account Tax Compliance Act) are international automatic exchange of information frameworks. Gibraltar has adopted both. Gibraltar financial institutions — including certain funds, trusts, and companies holding financial assets for third parties — must register with the Gibraltar Income Tax Office, conduct due diligence on account holders, and submit annual reports. Companies that are not financial institutions are generally not in scope.

• How does payroll tax work in Gibraltar?

  Employers in Gibraltar operate a pay-as-you-earn (PAYE) system, deducting income tax from employees' salaries and remitting it to the Income Tax Office monthly. Employees are taxed on employment income at graduated rates — between 6% and 28% under the allowances-based system, or 16%–25% under the gross income-based system. Employees elect which system to use, and Resilience Group can manage payroll administration as part of a full company service.

• What is social insurance in Gibraltar?

  Gibraltar operates a social insurance scheme under which both employers and employees make mandatory contributions. The employer rate is currently 20% of the employee's gross earnings up to the earnings ceiling, and the employee rate is 10%. Self-employed individuals pay a flat weekly rate. Social insurance contributions fund state benefits including pensions, healthcare, and unemployment support.

• Does Gibraltar have a double taxation agreement with the UK?

  Gibraltar and the UK have a double taxation arrangement (DTA) that covers income from employment, pensions, and certain other income categories. The arrangement is narrower in scope than a full OECD-model treaty and does not cover corporate profits in the same way as a standard treaty. Specific advice should be sought where cross-border tax exposure arises, particularly for UK-connected structures.

• What is the Category 2 individual tax regime?

  Category 2 is a personal tax status available to high-net-worth individuals who are not ordinarily resident in Gibraltar. Qualifying individuals pay tax on a capped basis: their Gibraltar tax liability is assessed on the first £105,000 of assessable income, with a minimum annual tax payment of around £32,000 and a maximum of approximately £44,000. Applicants must own or rent approved residential property in Gibraltar and satisfy GFSC character and financial standing requirements.

• What is the HEPSS (High Executive Possessing Specialist Skills) regime?

  HEPSS is a personal tax regime for individuals employed in Gibraltar in a qualifying senior or specialist role with a minimum employment income of £160,000 per year. HEPSS individuals pay income tax only on the first £160,000 of their Gibraltar employment income, with no tax on income above that threshold. The regime is designed to attract senior executives to Gibraltar-based businesses and requires prior approval from the Gibraltar government.

• Does Gibraltar have inheritance tax or stamp duty on shares?

  Gibraltar has no inheritance tax, estate duty, or wealth tax. Stamp duty applies to property transfers at 0.5% on properties valued up to £200,000, rising to 2% above that threshold. There is no stamp duty on share transfers, which facilitates the use of Gibraltar holding structures for property and other assets.

• Are foreign dividends received by a Gibraltar company taxable?

  Dividends received by a Gibraltar holding company from overseas subsidiaries are generally not subject to Gibraltar corporation tax under the territorial principle, provided the income arises wholly outside Gibraltar. There is also no withholding tax on dividends paid out from a Gibraltar company to non-resident shareholders, making Gibraltar efficient as a dividend conduit or holding jurisdiction.

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