Taxation in Gibraltar.
The assessment and collection of income tax is currently governed by the Income Tax Act 2010, Rules and Regulations. That Act was enacted in 2010 and came into effect on 1 January 2011. Tax is charged on income accruing in or derived from Gibraltar on the profits or gains of a company or trust from any trade, business, profession or vocation.
Tax is charged on the income accruing in, derived from or received in Gibraltar (or in any other place) by an individual ordinarily resident in Gibraltar from employment or the exercise of any self employment activities in connection with a trade, business, profession or vocation.
Dividends, pensions and emoluments of office accruing in, derived from or received in any place other than Gibraltar by an ordinarily resident individual are also taxable in Gibraltar. Generally, when taxed in the country of accrual and not received in Gibraltar such income is not taxable in Gibraltar.
Tax is charged on income of all individuals and companies in respect of any rents, premiums and any other interest in real property located in Gibraltar. Income arising outside Gibraltar, which although not actually received or transferred, is obtained in Gibraltar by an individual in the form of an equivalent benefit, is treated as having been received in Gibraltar.
The rate of corporation tax is 10%
With effect from 1 January 2011 the rate of 10% applies to all companies, except utility companies and companies enjoying and abusing a dominant market position, who will pay a higher rate of 20%. These will include electricity, fuel, telephone service and water providers.
Interest is not chargeable to tax under the Income Tax Act 2010 unless:
- It is in the course of licensed money lending activities or deposit taking activities as defined in the Financial Services (Banking) Act; or
- It is interest on loans by a company to another company in excess of £100,000.
Dividends paid by a company which is ordinarily resident in Gibraltar are liable to tax in Gibraltar when paid to a shareholder who is an individual ordinarily resident in Gibraltar. A tax credit at the rate of tax paid by the company on the profits out of which the dividend is being paid shall be available for set off against any tax that may be charged on that income.