Value-added tax (VAT)
There is no VAT in Gibraltar.
With effect from 1 January 2020, an exit tax of 10% is imposed on the difference between the market value of the transferred assets which would otherwise produce assessable income under the provisions of the Gibraltar Income Tax Act 2010 at the time of exit of the assets, less their value for tax purposes. The exit tax may apply in the following circumstances where a taxpayer transfers:
- assets from its Gibraltar Head Office to its Permanent Establishment (“PE”) outside Gibraltar and Gibraltar no longer has the right to tax the transferred assets;
- assets from its Gibraltar PE to its Head Office or PE outside of Gibraltar and Gibraltar no longer has the right to tax the transferred assets;
- its tax residence outside of Gibraltar and acquires tax residence in another jurisdiction (excluding assets which remain effectively connected to the Gibraltar PE); or
- the business carried on by its Gibraltar PE to another jurisdiction and in doing so the taxpayer:
(i) ceases to have a taxable presence in Gibraltar;
(ii) acquires a presence elsewhere without becoming tax resident; and
(iii) Gibraltar loses the right to tax the transferred assets due to the transfer.
Goods imported into Gibraltar are subject to import duty at varying rates. The most noticeable exceptions are fuel, tobacco, and alcohol, which are subject to a fixed amount of duty regardless of the value, and motor vehicles, which attract duty at various rates of between 2% and 35% of the value, depending on the type and size of engine and whether it is a private or dealer importation.
There is no provision for excise taxes in Gibraltar.
A general business property rate is levied annually on all businesses in Gibraltar. The amount varies depending on the property and is subject to an annual review.
Stamp duty is payable on the transfer or sale of any Gibraltar real estate or shares in a company owning Gibraltar real estate (on an amount based on the market value of said real estate) at the following rates:
- 200,000 British pounds (GBP) or less: 0%.
- Between GBP 200,001 and GBP 350,000: 2% on the first GBP 250,000 and 5.5% on the balance.
- Over GBP 350,000: 3% on the first GBP 350,000 and 3.5% on the balance.
Stamp duty is also payable on mortgages secured on Gibraltar real estate at the rate of 0.13% for mortgages less than GBP 200,000 and 0.20% for mortgages over GBP 200,000.
Collection of employee taxes is initially effected under a pay-as-you-earn (PAYE) system. Employers are required to operate the system without exception, keep appropriate records, and complete the necessary filings.
The PAYE regulations require each employee to obtain from the Commissioner of Income Tax a PAYE allowances certificate, which allocates a code to the employee. The employer is required to use tax tables issued by the Income Tax Office to calculate and deduct tax from emoluments in accordance with the employee’s applicable code. The employer is then obligated to pay over to the Commissioner any tax so deducted by the 15th day of the following month.
An employer must also account for social insurance payments in a similar manner, deducting and paying over the employee tax as well as accounting for employer’s social insurance (see below).
Social insurance contributions
Social insurance contributions are payable by every employer in respect of every employee.
Employer contributions are 20% of gross earnings, subject to a minimum of GBP 18.15 per week (GBP 78.65 per month) and a maximum of GBP 40.15 per week (GBP 173.98 per month).
Gaming duty is levied at 0.15% on the gross profits of holders of a bookmaker, a betting intermediary, and gaming operator’s licence. The first GBP 100,000 of gross profits is exempt from this duty.
Capital duty of GBP 10 is payable on the initial authorisation of share capital or any subsequent increase thereto.