How does the Gibraltar tax system work?

The territorial principle

Gibraltar taxes profits that accrue in or are derived from Gibraltar. This is determined by the source of the income — specifically, where the underlying activity, service, or income-generating event takes place. A company incorporated in Gibraltar but conducting its trading operations in the United Kingdom, Germany, or the United States will not be subject to Gibraltar corporation tax on those trading profits. The income is sourced outside Gibraltar and falls entirely outside the Gibraltar tax base.

What is in scope

Income sourced in Gibraltar includes: remuneration for services physically performed in Gibraltar, rental income from Gibraltar property, profits from trading activities conducted in Gibraltar, and management fees charged by a Gibraltar-based manager for services rendered in Gibraltar. A Gibraltar company providing management or advisory services from Gibraltar will typically be taxable on those fees at 15%. The analysis of source requires a facts-and-circumstances assessment of where the value-generating activity occurs.

No capital gains tax

Gibraltar has no capital gains tax. Gains on disposal of any asset — shares, real estate, intellectual property, cryptocurrency, business interests — are not subject to any Gibraltar tax, whether the asset is Gibraltar-sited or located offshore. This applies to individuals and companies alike. There is no equivalent of the UK's section 1 TCGA 1992 charge in Gibraltar.

No stamp duty on shares

There is no stamp duty or stamp duty reserve tax on transfers of shares in Gibraltar companies. Share transactions are therefore free of transaction tax at the Gibraltar level. This contrasts with the UK, where SDRT applies at 0.5% on electronic share transfers, and with jurisdictions such as Switzerland, which levies a securities transfer tax. For investment holding companies structured in Gibraltar, share sales can be executed without Gibraltar transaction tax.

No VAT

Gibraltar has no value added tax regime and no goods and services tax. There is no consumption tax on business supplies of goods or services. This means that companies in Gibraltar do not need to register for VAT, file VAT returns, or manage input/output tax. For service businesses, there is no VAT cost on supplies made by Gibraltar entities to Gibraltar customers. Businesses supplying into VAT-registered jurisdictions (such as the EU or UK) need to consider the VAT position in those destination jurisdictions — Gibraltar's own non-VAT position does not affect their customer-side obligations.

No wealth tax

Gibraltar levies no wealth tax on individuals or companies. There is no annual charge on asset holdings, net worth, or financial assets. This makes Gibraltar attractive for high-net-worth individuals who might otherwise face wealth taxes in jurisdictions such as Spain (whose solidarity tax applies to non-residents holding Spanish assets), Switzerland (cantonal wealth tax), or Norway (net wealth tax at 1.1%).

No inheritance tax

Gibraltar has no inheritance tax, estate duty, or gift tax. Transfers of assets on death — including shares in Gibraltar companies, Gibraltar real estate, and moveable assets held in Gibraltar — are not subject to any Gibraltar death duty. This is a material advantage for estate and succession planning for non-domiciliaries, particularly those with UK connections where HMRC inheritance tax at 40% applies to worldwide estates above the nil-rate band.

No withholding tax on dividends

Gibraltar does not impose withholding tax on dividend distributions made by Gibraltar companies to non-resident shareholders. A Gibraltar company can repatriate profits to its shareholders — wherever resident — without deducting any Gibraltar withholding tax. The recipient's home jurisdiction may impose tax on receipt of dividends depending on its domestic rules and applicable tax treaties.

Category 2 Individual

The Cat 2 regime caps personal income tax for qualifying high-net-worth individuals. Under Cat 2, Gibraltar income tax is assessed only on the first £105,000 of assessable income each year. The minimum annual tax payment is £39,940 (based on tax year 2024/25 rates). Actual worldwide income above £105,000 is not subject to Gibraltar income tax. Cat 2 status requires approval from the Gibraltar Commissioner of Income Tax, evidence of a net worth of at least £2 million, and the occupation of appropriate residential accommodation in Gibraltar. The regime is not available to individuals who are ordinarily resident in Gibraltar prior to application.

HEPSS — High Executive Possessing Specialist Skills

HEPSS is a personal tax concession for senior employees or executives possessing skills not available locally in Gibraltar. Under HEPSS, income above £160,000 per annum is exempt from Gibraltar income tax. The individual is taxed at normal Gibraltar rates only on the first £160,000 of qualifying employment income. HEPSS requires an application to and approval by the Commissioner of Income Tax, supported by evidence that the skills are genuinely specialist and not locally available. It must be renewed annually and is typically sought by senior executives relocating to Gibraltar with regulated firms.

Standard personal income tax

For individuals who do not qualify for Cat 2 or HEPSS, Gibraltar operates a standard progressive income tax with two allowance-based systems — the Allowances Based System (ABS) and the Gross Income Based System (GIBS). Under ABS, individuals claim personal allowances and pay tax on net assessable income. Under GIBS, tax is calculated on gross income at reduced rates. Individuals elect annually which system to apply. The maximum marginal rate under the standard system is approximately 28%, materially lower than the UK's 45% additional rate.

Gibraltar–UK Double Taxation Agreement

The Gibraltar–UK DTA provides a framework for eliminating double taxation for individuals and entities with cross-border connections to both jurisdictions. It covers income tax, corporation tax, and associated charges. Key provisions deal with the allocation of taxing rights over employment income, dividends, interest, royalties, and capital gains. The DTA is relevant for Gibraltar-resident individuals with UK-source income, Gibraltar companies with UK operations or UK directors, and cross-border structures involving both jurisdictions. The DTA is the only full double tax agreement Gibraltar has concluded.

Common Reporting Standard (CRS)

Gibraltar has been a CRS participating jurisdiction since 2017. Gibraltar financial institutions — banks, investment firms, fund administrators, trustees, and corporate service providers acting as financial institutions — must identify account holders who are tax-resident in CRS partner jurisdictions, collect the required due diligence information, and make annual reports to the Gibraltar Commissioner of Income Tax. The Commissioner exchanges this information automatically with the tax authorities of partner jurisdictions. Gibraltar participates in the multilateral competent authority agreement (MCAA).

FATCA

Gibraltar signed a Model 1 Intergovernmental Agreement (IGA) with the United States in 2013. Under the Model 1 IGA, Gibraltar financial institutions report information on US persons to the Gibraltar Commissioner of Income Tax, who transmits the data to the US Internal Revenue Service. Gibraltar financial institutions must register with the IRS FATCA portal as reporting foreign financial institutions. Non-compliant entities risk withholding on US-source payments. Resilience Group's compliance services include FATCA classification and reporting support for Gibraltar-regulated entities.