Gibraltar

Generally, companies are subject to Gibraltar taxation on income accrued in and derived from Gibraltar.

The ‘accrued in and derived from’ principle is defined by reference to the location of the activities that give rise to the profits.

Should the activity of a business be a licensable activity under Gibraltar law, the profits from this activity will be deemed to arise in Gibraltar. Furthermore, the profits of a business that can lawfully be transacted in Gibraltar, through a branch or any form of PE, by virtue of the fact that it is licensed in another jurisdiction that enjoys passporting rights into Gibraltar and which would otherwise require such licence and regulation in Gibraltar shall be deemed to arise in Gibraltar.

In the case of royalty income and inter-company interest income, both revenue streams are deemed to accrue in and derive from Gibraltar where the entity in receipt of the income is a Gibraltar-registered company.

Inventory valuation

Inventory is valued at the lower of historical cost or net realisable value. A first in first out (FIFO) basis of determining cost where items cannot be identified is acceptable, but not the base-stock or the last in first out (LIFO) method.

Capital gains

Capital gains are not subject to tax in Gibraltar.

Dividend income

There is no charge to tax on the receipt by a Gibraltar company of dividends from any other company.

Interest income

Companies with a banking, money lending, DLT, or insurer licence and earning interest as a trading receipt will have that interest treated as income chargeable to tax.

Interest received or receivable by a Gibraltar company arising from an inter-company loan will be chargeable to tax at the standard CIT rate. Where the interest received or receivable is less than GBP 100,000 per annum, the interest is exempt from any charge to taxation.

All other interest received or receivable is not taxable in Gibraltar.

Royalty income

Income from royalties received or receivable by a Gibraltar company is taxable at the standard CIT rate.

Foreign income

Foreign income is not normally taxed in Gibraltar. Exceptions to this rule are interest income and royalty income (see above).

Profits and gains derived from the sale of property

As from 1 January 2025 the profits and gains derived from the sale of a property will be subject to taxation if a person owns or holds indirectly through a property holding entity:

• five or more taxable properties, in whole or in part; or
• a total of five or more taxable properties, in whole or in part, over five consecutive tax periods.

If the above criteria are met the following will be subject to tax:

• profits from the sale of any such property by the property holding entity, treated as if the profits are the income of that entity; and
• profits from the sale of shares, indirectly, in a property holding entity by the person or by any nominee holding shares on the person's behalf, treated as if the profits are the income of that person.

The provision excludes a property which is used exclusively as the primary residence of the beneficial owner. Properties exempt from taxation are listed under the definition of 'exempted property'. 

The provision will not apply to:

• the exercise of a power of sale pursuant to a mortgage on the residential property;  
• any order of a court ordering a sale of the residential property; or
• A disposal by the estate of a deceased person. 

Anti-avoidance provisions are applied when the main objective of a transaction is to avoid taxation. These provisions are relevant in cases of ownership transfers between connected individuals or when a conveyancing transaction is considered a disposal.